Galiano Gold(GAU) - 2025 Q2 - Quarterly Report

Condensed Consolidated Interim Statements of Financial Position The company's financial position as of June 30, 2025, reflects increased assets and liabilities, with a slight decrease in total equity Financial Position Overview Galiano Gold Inc. reported an increase in total assets and liabilities as of June 30, 2025, compared to December 31, 2024, while total equity slightly decreased | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :----------------------------- | :---------------------------- | :------------------------------ | :------------------- | :--------- | | Total Assets | 560,137 | 500,353 | 59,784 | 11.95% | | Current Assets | 188,459 | 165,585 | 22,874 | 13.81% | | Non-Current Assets | 371,678 | 334,768 | 36,910 | 11.02% | | Total Liabilities | 317,644 | 252,584 | 65,060 | 25.76% | | Current Liabilities | 154,587 | 110,815 | 43,772 | 39.50% | | Non-Current Liabilities | 163,057 | 141,769 | 21,288 | 15.02% | | Total Equity | 242,493 | 247,769 | (5,276) | -2.13% | - Cash and cash equivalents increased by $8,906 thousand (8.42%) from $105,775 thousand at December 31, 2024, to $114,681 thousand at June 30, 2025[2] - Accounts payable and accrued liabilities significantly increased by $41,392 thousand (64.33%) from $64,348 thousand to $105,740 thousand[2] Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss) The company reported a net loss for the six months ended June 30, 2025, despite increased revenue, primarily due to higher finance expenses Operations and Comprehensive Income (Loss) Overview For the six months ended June 30, 2025, Galiano Gold Inc. reported a net loss, a significant shift from net income in the prior year, despite a substantial increase in revenue | Metric | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :------------------------------------------------ | :------------------------------------------- | :------------------------------------------- | :------------------- | :--------- | | Revenue | 173,894 | 95,658 | 78,236 | 81.79% | | Total cost of sales | (121,372) | (65,880) | (55,492) | 84.23% | | Income from mine operations | 52,522 | 29,778 | 22,744 | 76.38% | | Income from operations and joint venture | 40,077 | 17,628 | 22,449 | 127.35% | | Finance expense | (56,249) | (13,984) | (42,265) | 302.24% | | Net income (loss) for the period | (7,838) | 4,072 | (11,910) | -292.49% | | Net income (loss) per share (Basic) | (0.03) | 0.02 | (0.05) | -250.00% | - Revenue for the three months ended June 30, 2025, increased by 52.12% to $97,304 thousand from $63,963 thousand in the same period of 2024[4] - Net income for the three months ended June 30, 2025, was $21,554 thousand, a significant increase from $7,280 thousand in the prior year, while the six-month period showed a net loss[4] Condensed Consolidated Interim Statements of Changes in Equity Total equity decreased slightly for the six months ended June 30, 2025, mainly due to a net loss, partially offset by share capital increases Equity Changes Overview Galiano Gold Inc.'s total equity decreased slightly for the six months ended June 30, 2025, primarily due to a net loss for the period, despite increases in share capital from stock option exercises and equity-settled awards, and an increase in equity reserves from share-based compensation | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------- | :---------------------------- | :------------------------------ | :------------------- | :--------- | | Share capital | 617,546 | 616,203 | 1,343 | 0.22% | | Equity reserves | 54,167 | 52,948 | 1,219 | 2.30% | | Accumulated deficit | (433,175) | (425,695) | (7,480) | 1.76% | | Non-controlling interest | 3,955 | 4,313 | (358) | -8.30% | | Total equity | 242,493 | 247,769 | (5,276) | -2.13% | - The accumulated deficit increased by $7,480 thousand for the six months ended June 30, 2025, reflecting the net loss for the period[5] - Share capital increased by $1,343 thousand due to the exercise of stock options and equity-settled long-term incentive plan awards[5] Condensed Consolidated Interim Statements of Cash Flow Operating cash flow significantly increased for the six months ended June 30, 2025, leading to a net increase in cash and cash equivalents Cash Flow Overview Galiano Gold Inc. generated significantly more cash from operating activities for the six months ended June 30, 2025, compared to the prior year | Cash Flow Activity | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------- | :--------- | | Operating activities | 61,706 | 17,491 | 44,215 | 252.79% | | Investing activities | (46,665) | 52,801 | (99,466) | -188.38% | | Financing activities | (7,865) | (1,787) | (6,078) | 340.12% | | Net increase in cash | 8,906 | 67,769 | (58,863) | -86.86% | | Cash and cash equivalents, end of period | 114,681 | 123,039 | (8,358) | -6.79% | - Cash provided by operating activities for the three months ended June 30, 2025, increased to $35,814 thousand from $4,463 thousand in the prior year, a 702.47% increase[6] - Expenditures on mineral properties, plant and equipment increased significantly, consuming $48,076 thousand in the first six months of 2025, compared to $19,581 thousand in 2024[6] Notes to the Condensed Consolidated Interim Financial Statements Detailed notes provide context on the company's operations, accounting policies, financial instruments, and segment information 1. Nature of operations Galiano Gold Inc. operates the Asanko Gold Mine (AGM) in Ghana, West Africa - Galiano Gold Inc. was incorporated on September 23, 1999, under the Business Corporations Act of British Columbia, Canada[7] - On March 4, 2024, the Company acquired Gold Fields Limited's 45% interest in the AGM, increasing its ownership to 90%, with the Government of Ghana holding a 10% non-controlling interest[9] - The AGM consists of four main open-pit mining areas: Abore, Nkran, Esaase and Miradani North, located on the Asankrangwa Gold Belt in Ghana[10] 2. Basis of presentation The condensed consolidated interim financial statements are prepared in accordance with IAS 34 and IFRS, using accounting policies consistent with the Company's audited annual financial statements for December 31, 2024 - Statements are prepared in accordance with International Accounting Standard (IAS) 34 - Interim Financial Reporting, using accounting policies consistent with International Financial Reporting Standards (IFRS)[11] - All amounts are expressed in thousands of United States dollars, which is the functional currency of the Company and its subsidiaries[13] - The Company began consolidating the financial information of Asanko Gold Ghana Ltd. (AGGL), Adansi Gold Company (GH) Ltd., and Shika Group Finance Limited commencing on March 4, 2024[15] - IFRS 18, Presentation and Disclosure in Financial Statements, effective January 1, 2027, may change the reporting of 'operating profit or loss' but not recognition or measurement[18] 2. (a) Statement of compliance These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34 - Interim Financial Reporting - These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34 - Interim Financial Reporting[11] 2. (b) Basis of presentation and consolidation The financial statements incorporate the financial information of the Company and its subsidiaries, with control existing when the Company has power to govern financial and operating policies - The financial statements incorporate the financial information of the Company and its subsidiaries, with control existing when the Company has power to govern financial and operating policies[14] - The results of operations and cash flows of Asanko Gold Ghana Ltd. (AGGL), Adansi Gold Company (GH) Ltd. and Shika Group Finance Limited were consolidated commencing on March 4, 2024[15] 2. (c) Accounting standards adopted during the period There were no new accounting standards effective January 1, 2025, that impacted these condensed consolidated interim financial statements - There were no new accounting standards effective January 1, 2025, that impacted these condensed consolidated interim financial statements[17] 2. (d) Accounting standards and amendments issued but not yet adopted IFRS 18, Presentation and Disclosure in Financial Statements, issued April 9, 2024, will be effective for reporting periods beginning on or after January 1, 2027, and may change the presentation of the statement of profit or loss - IFRS 18, Presentation and Disclosure in Financial Statements, issued April 9, 2024, will be effective for reporting periods beginning on or after January 1, 2027, and may change the presentation of the statement of profit or loss[18] - Amendments to IFRS 7 and IFRS 9 regarding classification and measurement of financial instruments, effective January 1, 2026, are not expected to have a material impact[19] 3. Significant accounting judgements and estimates Management confirms that the significant accounting judgements and estimates used in these interim financial statements remain unchanged from those presented in the Company's audited consolidated annual financial statements for the year ended December 31, 2024 - The Company's significant accounting judgements and estimates are unchanged as compared to those presented in note 5 of the Company's audited consolidated annual financial statements for the year ended December 31, 2024[21] 4. Acquisition of control of the AGM On March 4, 2024, Galiano Gold Inc. acquired Gold Fields' 45% interest in the Asanko Gold Mine (AGM) joint venture, increasing its ownership to 90% - On March 4, 2024, the Company completed the acquisition of Gold Fields' 45% interest in the AGM JV, resulting in a 90% interest in AGGL[22] - Total consideration included $65.0 million in cash, issuance of 28.5 million common shares, $55.0 million in deferred consideration, and a $30.0 million contingent cash payment upon production of 100,000 gold ounces from the Nkran deposit[25] - Gold Fields also received a 1% net smelter return royalty on production from the Nkran deposit, subject to a maximum of 447,000 gold ounces[24] | Assets Acquired / Liabilities Assumed | Final ($ thousands) | | :------------------------------------ | :------------------ | | Cash and cash equivalents | 112,502 | | Inventories | 41,158 | | Mineral properties, plant and equipment | 244,584 | | Accounts payable and accrued liabilities | (44,475) | | Asset retirement provisions | (53,537) | | Net assets acquired | 299,860 | 5. Cash and cash equivalents Cash and cash equivalents increased to $114.7 million as of June 30, 2025, from $105.8 million at December 31, 2024, primarily due to a significant increase in cash held in banks | Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------- | :-------------------------- | :------------------------------ | | Cash held in banks | 63,304 | 23,454 | | Short-term investments | 51,377 | 82,321 | | Total | 114,681 | 105,775 | - Cash held in banks increased by $39,850 thousand (170%) from December 31, 2024, to June 30, 2025[27] - Short-term investments decreased by $30,944 thousand (-37.6%) over the same period[27] 6. Inventories Total inventories increased slightly to $44.2 million as of June 30, 2025, from $42.8 million at December 31, 2024, driven by a significant increase in ore stockpiles, partially offset by a decrease in gold dore on hand | Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :---------------- | :-------------------------- | :------------------------------ | | Gold dore on hand | 1,890 | 10,216 | | Gold-in-process | 2,623 | 2,229 | | Ore stockpiles | 23,293 | 12,117 | | Supplies | 16,347 | 18,268 | | Total inventories | 44,153 | 42,830 | - Ore stockpiles increased by $11,176 thousand (92.2%) from December 31, 2024, to June 30, 2025[28] - Gold dore on hand decreased by $8,326 thousand (-81.5%) over the same period[28] 7. Prepaid expenses and other Prepaid expenses and other assets significantly increased to $18.0 million as of June 30, 2025, from $8.5 million at December 31, 2024, primarily due to the recognition of prepaid income taxes | Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :---------------------------- | :-------------------------- | :------------------------------ | | Prepaid expenses | 9,091 | 7,039 | | Marketable securities | 3,077 | 1,509 | | Prepaid income taxes | 5,789 | - | | Total prepaid expenses and other | 17,957 | 8,548 | - Prepaid income taxes of $5,789 thousand were recognized as of June 30, 2025, with no balance at December 31, 2024[29] - Marketable securities increased by $1,568 thousand (103.9%) from December 31, 2024, to June 30, 2025[29] 8. Mineral properties, plant and equipment ("MPP&E") The net book value of Mineral Properties, Plant and Equipment (MPP&E) increased to $366.4 million as of June 30, 2025, from $329.4 million at December 31, 2024 | Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------------------- | :-------------------------- | :------------------------------ | | Mineral interests | 129,579 | 98,034 | | Plant, buildings and equipment | 186,640 | 189,330 | | Right-of-use asset | 39,549 | 36,276 | | Assets under construction | 6,607 | 1,784 | | Total Net Book Value | 366,389 | 329,429 | - Additions to mineral interests for the six months ended June 30, 2025, totaled $45,207 thousand, including $27.0 million in capitalized stripping costs at Abore and Esaase deposits[30][31] - Depreciation and depletion expense for the six months ended June 30, 2025, was $30,341 thousand, with a credit of $2.8 million capitalized to inventories[30][32] 9. Accounts payable and accrued liabilities Accounts payable and accrued liabilities significantly increased to $105.7 million as of June 30, 2025, from $64.3 million at December 31, 2024, primarily driven by higher supplier payables and current portion of gold hedge liabilities | Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------------------------- | :-------------------------- | :------------------------------ | | Supplier payables | 21,871 | 10,570 | | Accrued liabilities | 31,030 | 24,366 | | Royalties, mineral rights fees and withholding taxes | 13,431 | 13,189 | | Current portion of long-term incentive plan liabilities | 6,565 | 6,939 | | Current portion of gold hedge liabilities | 32,843 | 9,284 | | Total | 105,740 | 64,348 | - Current portion of gold hedge liabilities increased by $23,559 thousand (253.7%) from December 31, 2024, to June 30, 2025[34] - Supplier payables more than doubled, increasing by $11,301 thousand (106.9%) over the same period[34] 10. Lease liabilities Total lease liabilities increased to $44.6 million as of June 30, 2025, from $38.9 million at December 31, 2024, driven by new leases entered into during the period, partially offset by lease payments | Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------------------- | :-------------------------- | :------------------------------ | | Balance, beginning of period | 38,872 | 203 | | Leases entered into during the period | 11,157 | 27,816 | | Lease payments | (8,722) | (13,400) | | Interest expense | 3,281 | 5,077 | | Total lease liabilities, end of period | 44,588 | 38,872 | | Current portion | (17,600) | (15,937) | | Non-current portion | 26,988 | 22,935 | - The Company incurred $55.4 million in variable lease payments under mining services contracts for the six months ended June 30, 2025, an increase from $22.4 million in the prior year[35] 11. Asset retirement provisions Asset retirement provisions increased to $72.0 million as of June 30, 2025, from $66.1 million at December 31, 2024, due to changes in estimates and accretion expense, reflecting reclamation and closure costs for the AGM's mining properties | Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------------------- | :-------------------------- | :------------------------------ | | Balance, beginning of period | 66,060 | - | | Assumed in Acquisition | - | 53,537 | | Change in estimate, post-acquisition | - | 8,360 | | Accretion expense | 1,410 | 2,246 | | Change in estimate | 4,585 | 2,268 | | Reclamation undertaken during the period | (79) | (351) | | Total asset retirement provisions, end of period | 71,976 | 66,060 | - The Company's reclamation cost estimates were discounted using a long-term risk-free discount rate of 4.1% as of June 30, 2025, down from 4.5% at December 31, 2024[36] 12. Deferred and contingent consideration Total deferred and contingent consideration increased to $75.1 million as of June 30, 2025, from $71.4 million at December 31, 2024 | Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------------------------- | :-------------------------- | :------------------------------ | | Deferred Consideration | 51,636 | 50,109 | | Contingent Consideration | 18,055 | 16,873 | | Nkran Royalty | 5,430 | 4,388 | | Total deferred and contingent consideration | 75,121 | 71,370 | | Current portion of Deferred Consideration | (24,252) | (23,535) | | Non-current portion | 50,869 | 47,835 | - The Company recognized $1.5 million in accretion expense on deferred consideration for the six months ended June 30, 2025[40][41] - Fair value adjustments for contingent consideration and Nkran Royalty resulted in finance expenses of $1.2 million and $1.0 million, respectively, for the six months ended June 30, 2025[42][45] 12. (a) Deferred Consideration $55.0 million of the aggregate consideration payable to Gold Fields is deferred, with $25.0 million due on or before December 31, 2025, and $30.0 million due on or before December 31, 2026 - $55.0 million of the aggregate consideration payable to Gold Fields is deferred, with $25.0 million due on or before December 31, 2025, and $30.0 million due on or before December 31, 2026[39] - Accretion expense of $1.5 million was recognized for the six months ended June 30, 2025[40][41] 12. (b) Contingent Consideration $30.0 million of contingent consideration is payable upon 100,000 gold ounces being produced from the Nkran deposit - $30.0 million of contingent consideration is payable upon 100,000 gold ounces being produced from the Nkran deposit[42] - The fair value of Contingent Consideration was remeasured to $18.1 million as of June 30, 2025, with a $1.2 million fair value adjustment recognized in finance expense for the six months ended June 30, 2025[42][43] 12. (c) Nkran Royalty Gold Fields is entitled to a 1% net smelter return royalty on gold revenue from the Nkran deposit, starting after 100,000 gold ounces produced, up to 447,000 gold ounces - Gold Fields is entitled to a 1% net smelter return royalty on gold revenue from the Nkran deposit, starting after 100,000 gold ounces produced, up to 447,000 gold ounces[44] - The fair value of the Nkran Royalty was remeasured to $5.4 million as of June 30, 2025, with a $1.0 million fair value adjustment recognized in finance expense for the six months ended June 30, 2025[45][46] - The valuation used a long-term consensus gold price of $2,400 per ounce and a discount rate of 14.5%[45] 13. Share capital Galiano Gold Inc.'s issued and outstanding common shares increased to 258.4 million as of June 30, 2025, from 257.1 million at December 31, 2024, primarily due to the exercise of stock options and equity-settled restricted share units | Category | Number of shares | Amount ($ thousands) | | :------------------------------------------- | :--------------- | :------------------- | | Balance, January 1, 2024 | 224,972,786 | 579,619 | | Issued on closing of Acquisition | 28,500,000 | 32,449 | | Issued pursuant to exercise of stock options | 3,605,160 | 4,135 | | Balance, December 31, 2024 | 257,077,946 | 616,203 | | Issued pursuant to exercise of stock options | 1,225,500 | 1,246 | | Equity-settled restricted share units | 77,996 | 97 | | Balance, June 30, 2025 | 258,381,442 | 617,546 | - On July 8, 2025, the Company filed a final short form base shelf prospectus, allowing it to sell up to $500 million in various securities[48] 13. (a) Authorized The Company is authorized to issue an unlimited number of common shares without par value or restrictions - The Company is authorized to issue an unlimited number of common shares without par value or restrictions[47] 13. (b) Issued and outstanding common shares As of June 30, 2025, 258,381,442 common shares were issued and outstanding, with a total amount of $617,546 thousand - As of June 30, 2025, 258,381,442 common shares were issued and outstanding, with a total amount of $617,546 thousand[47] 13. (c) Base shelf prospectus The Company filed a base shelf prospectus on July 8, 2025, allowing for the sale of up to $500 million in securities over a 25-month term - The Company filed a base shelf prospectus on July 8, 2025, allowing for the sale of up to $500 million in securities over a 25-month term[48] 14. Equity reserves and long-term incentive plan awards Galiano Gold Inc. operates a stock option plan and a share unit plan (RSUs, PSUs, DSUs) for directors, officers, and employees - The Company has a stock option plan and a share unit plan (RSUs, PSUs, DSUs) for directors, officers, employees, and other service providers[49] - Awards granted prior to 2025 were designated as cash-settled, while awards granted in 2025 are equity-settled[51][52] | Share-based compensation expense | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | | :------------------------------- | :------------------------------------------- | :------------------------------------------- | | Equity-settled awards | 1,608 | 579 | | Cash-settled awards | 485 | 7,545 | | Total | 2,093 | 8,124 | 14. (a) Stock options Stock options vest in one-third increments over three years and have a maximum term of five years - Stock options vest in one-third increments over three years and have a maximum term of five years[53] | Stock Options Movement | Number of Options (June 30, 2025) | Weighted average exercise price (C$) | | :--------------------- | :-------------------------------- | :----------------------------------- | | Balance, Jan 1, 2024 | 12,575,335 | 0.97 | | Granted | 2,478,000 | 1.81 | | Exercised | (1,225,500) | 0.97 | | Forfeited | (682,668) | 1.06 | | Balance, Jun 30, 2025 | 11,619,671 | 1.21 | - Share-based compensation expense for stock options was $458 thousand for the six months ended June 30, 2025, down from $579 thousand in 2024[53] 14. (b) Restricted share units RSUs granted vest in one-third increments over three years - RSUs granted vest in one-third increments over three years[54] | RSU Movement | Number of RSUs (June 30, 2025) | Number of RSUs (Dec 31, 2024) | | :-------------------- | :----------------------------- | :---------------------------- | | Balance, beginning | 548,284 | 564,237 | | Granted | 210,000 | 270,000 | | Settled in cash | (166,701) | (302,046) | | Settled in common shares | (77,996) | - | | Forfeited | (49,267) | (59,667) | | Balance, end of period | 464,320 | 548,284 | - RSU awards granted in 2025 are classified as equity-settled, with a fair value of C$1.76 per award and an estimated forfeiture rate of 8.8%[54] 14. (c) Performance share units PSUs granted from January 1, 2024, onwards have a cliff vesting feature after a three-year service period, with a performance multiplier ranging from 0% to 150% - PSUs granted from January 1, 2024, onwards have a cliff vesting feature after a three-year service period, with a performance multiplier ranging from 0% to 150%[56][57] | PSU Movement | Number of PSUs (June 30, 2025) | Number of PSUs (Dec 31, 2024) | | :-------------------- | :----------------------------- | :---------------------------- | | Balance, beginning | 1,476,487 | 2,501,482 | | Granted | 612,000 | 884,000 | | Settled in cash | (592,750) | (1,709,427) | | Added due to performance condition | 154,498 | 191,383 | | Forfeited | (58,267) | (390,951) | | Balance, end of period | 1,591,968 | 1,476,487 | - PSU awards granted in 2025 are equity-settled, with a fair value of C$1.76 per award and an estimated forfeiture rate of 7.0%[58] 14. (d) Deferred share units DSUs vest over one year and are paid to directors upon retirement or a change of control - DSUs vest over one year and are paid to directors upon retirement or a change of control[60] | DSU Movement | Number of DSUs (June 30, 2025) | Number of DSUs (Dec 31, 2024) | | :-------------------- | :----------------------------- | :---------------------------- | | Balance, beginning | 4,830,900 | 5,068,275 | | Granted | 962,900 | 1,045,200 | | Settled in cash | - | (1,194,975) | | Forfeited | - | (87,600) | | Balance, end of period | 5,793,800 | 4,830,900 | - Share-based compensation expense for equity-settled DSU awards was $1.1 million for the six months ended June 30, 2025, compared to nil in 2024[60] 14. (e) Share-based compensation expense Total share-based compensation expense for the six months ended June 30, 2025, was $2.1 million, a decrease from $8.1 million in the prior year | Share-based compensation expense | Three months ended June 30, 2025 ($ thousands) | Three months ended June 30, 2024 ($ thousands) | | :------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Equity-settled awards | 701 | 191 | | Cash-settled awards | 256 | 2,805 | | Total | 957 | 2,996 | | Share-based compensation expense | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | | :------------------------------- | :------------------------------------------- | :------------------------------------------- | | Equity-settled awards | 1,608 | 579 | | Cash-settled awards | 485 | 7,545 | | Total | 2,093 | 8,124 | 15. Non-controlling interest ("NCI") The non-controlling interest (NCI) decreased to $4.0 million as of June 30, 2025, from $4.3 million at December 31, 2024, primarily due to a net loss attributable to NCI during the period | Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :----------------------------- | :-------------------------- | :------------------------------ | | Balance, beginning of period | 4,313 | - | | NCI assumed in Acquisition | - | 1,890 | | Net (loss) earnings attributable to NCI | (358) | 2,423 | | Balance, end of period | 3,955 | 4,313 | - The Government of Ghana's 10% free-carried interest in AGGL is considered an NCI[63] - No dividends will be paid to the NCI until AGGL has retained earnings, expected in the latter half of the mine's life[63] 16. Production costs Total production costs for the six months ended June 30, 2025, increased to $81.5 million from $52.5 million in the prior year, primarily due to higher contractor costs, raw materials, and consumables, reflecting the full consolidation of AGM operations | Production Cost Category | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | | :----------------------- | :------------------------------------------- | :------------------------------------------- | | Raw materials and consumables | (24,355) | (18,216) | | Salaries and employee benefits | (12,318) | (7,842) | | Contractors | (34,045) | (15,410) | | Insurance, government fees, permits and other | (11,238) | (4,053) | | Total production costs | (81,545) | (52,455) | - Contractor costs increased by $18,635 thousand (120.9%) for the six months ended June 30, 2025, compared to the prior year[65] - Production costs of the AGM were consolidated by the Company from March 4, 2024, onwards[64] 17. Royalties Royalties expense for the six months ended June 30, 2025, increased to $12.4 million from $5.8 million in the prior year - The Growth and Sustainability Levy (GSL) on gold mining companies in Ghana increased from 1% to 3% of revenues, effective April 1, 2025, until December 31, 2028[66] | Metric | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | | :------- | :------------------------------------------- | :------------------------------------------- | | Royalties | (12,380) | (5,765) | 18. General and administrative ("G&A") expenses General and administrative (G&A) expenses for the six months ended June 30, 2025, decreased to $10.1 million from $14.3 million in the prior year, primarily due to a significant reduction in share-based compensation expense | G&A Expense Category | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | | :--------------------------- | :------------------------------------------- | :------------------------------------------- | | Wages, benefits and consulting | (4,782) | (3,911) | | Share-based compensation | (2,093) | (8,124) | | Withholding taxes | (721) | - | | Total G&A expense | (10,064) | (14,325) | - Share-based compensation expense decreased by $6,031 thousand (-74.2%) for the six months ended June 30, 2025, compared to the prior year[67] - Wages, benefits and consulting increased by $871 thousand (22.3%) over the same period[67] 19. Finance expense Finance expense for the six months ended June 30, 2025, significantly increased to $56.2 million from $14.0 million in the prior year | Finance Expense Category | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | | :------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Unrealized losses on gold hedging instruments | (32,023) | (5,619) | | Realized losses on gold hedging instruments | (15,602) | (3,114) | | Interest on lease liabilities | (3,281) | (1,855) | | Accretion expense on asset retirement provisions | (1,410) | (901) | | Accretion expense on deferred consideration | (1,527) | (974) | | Change in fair value of contingent consideration | (2,224) | (1,199) | | Total finance expense | (56,249) | (13,984) | - Unrealized losses on gold hedging instruments increased by $26,404 thousand (470%) for the six months ended June 30, 2025, compared to the prior year[68] - Realized losses on gold hedging instruments increased by $12,488 thousand (401%) over the same period[68] 20. Income (loss) per share For the six months ended June 30, 2025, Galiano Gold Inc. reported a basic and diluted net loss per share of ($0.03), a decrease from net income per share of $0.02 in the prior year | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) attributable to common shareholders | 19,326 | 7,280 | | Basic EPS | 0.07 | 0.03 | | Diluted EPS | 0.07 | 0.03 | | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to common shareholders | (7,480) | 4,072 | | Basic EPS | (0.03) | 0.02 | | Diluted EPS | (0.03) | 0.02 | - For the six months ended June 30, 2025, the effect of all potentially dilutive securities was anti-dilutive due to the reported net loss[69] 21. Commitments and contingencies Total contractual commitments increased to $370.5 million as of June 30, 2025, from $284.0 million at December 31, 2024 | Commitment Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--------------------------------------- | :-------------------------- | :------------------------------ | | Accounts payable and accrued liabilities | 66,332 | 48,125 | | ZCC gold hedges | 45,780 | 13,758 | | Mining and other services contracts | 76,204 | 44,590 | | Asset retirement provisions (undiscounted) | 78,871 | 75,770 | | Deferred and contingent consideration (undiscounted) | 95,858 | 94,237 | | Total commitments | 370,521 | 283,968 | - ZCC gold hedges increased by $32,022 thousand (232.8%) from December 31, 2024, to June 30, 2025[72] - The Company's ZCC gold hedging program covers 5,000 gold ounces per month for the remainder of 2025 and all of 2026, with specific put and call strikes[72] - The Company believes the ultimate resolution of regulatory investigations, claims, and lawsuits is not reasonably likely to have a material adverse effect on its financial condition or future results of operations[75] 21. Commitments The ZCC gold hedges commitment represents the mark-to-market fair value of the AGM's current gold hedging program - The ZCC gold hedges commitment represents the mark-to-market fair value of the AGM's current gold hedging program[72] - Long-term incentive plan commitments due within one year include all DSU awards to directors, considered current liabilities[73] 21. Contingencies The Company and its subsidiaries may be subject to regulatory investigations, claims, lawsuits, and other proceedings in the ordinary course of business - The Company and its subsidiaries may be subject to regulatory investigations, claims, lawsuits, and other proceedings in the ordinary course of business[75] 22. Supplemental cash flow information Supplemental cash flow information highlights non-cash transactions and changes in working capital | Non-Cash Transactions | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | | :-------------------- | :------------------------------------------- | :------------------------------------------- | | Change in asset retirement provisions included in MPP&E | 4,585 | 8,344 | | Capitalized leases included in MPP&E | 11,157 | 27,816 | | Change in Working Capital | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | | :------------------------ | :------------------------------------------- | :------------------------------------------- | | Accounts receivable | 56 | (7,905) | | Inventories | 1,576 | 8,190 | | Value added tax receivables | 185 | (3,784) | | Prepaid expenses and deposits | (7,841) | 385 | | Accounts payable and accrued liabilities | 10,890 | (8,032) | | Total | 4,866 | (11,146) | 23. Financial instruments Galiano Gold Inc.'s financial instruments include cash, receivables, marketable securities, and various liabilities | Financial Assets (June 30, 2025) | Fair value through profit or loss ($ thousands) | Amortized cost ($ thousands) | Carrying value ($ thousands) | | :------------------------------- | :---------------------------------------------- | :--------------------------- | :--------------------------- | | Cash and cash equivalents | - | 114,681 | 114,681 | | Marketable securities | 3,077 | - | 3,077 | | Total financial assets | 3,077 | 114,739 | 117,816 | | Financial Liabilities (June 30, 2025) | Fair value through profit or loss ($ thousands) | Amortized cost ($ thousands) | Carrying value ($ thousands) | | :------------------------------------ | :---------------------------------------------- | :--------------------------- | :--------------------------- | | Accounts payable and accrued liabilities | 39,408 | 66,332 | 105,740 | | Lease liabilities | - | 44,588 | 44,588 | | Deferred consideration | - | 51,636 | 51,636 | | Contingent consideration | 18,055 | - | 18,055 | | Nkran royalty | 5,430 | - | 5,430 | | Other non-current liabilities | 13,224 | - | 13,224 | | Total financial liabilities | 76,117 | 162,556 | 238,673 | | Derivative Instruments (Losses) | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | | :------------------------------ | :------------------------------------------- | :------------------------------------------- | | Realized loss on ZCC gold hedges | 15,602 | 3,114 | | Unrealized loss on ZCC gold hedges | 32,023 | 5,619 | 23. (a) Financial assets and liabilities by categories As of June 30, 2025, total financial assets were $117.8 million, and total financial liabilities were $238.7 million - As of June 30, 2025, total financial assets were $117.8 million, and total financial liabilities were $238.7 million[77] - Accounts payable and other non-current liabilities include long-term incentive plan and gold hedge instrument liabilities, measured at fair value through profit or loss[78][80] 23. (b) Derivative instruments The Company's derivatives are comprised of ZCC gold hedging instruments - The Company's derivatives are comprised of ZCC gold hedging instruments[81] - For the six months ended June 30, 2025, the Company incurred $15.6 million in realized losses and $32.0 million in unrealized losses on ZCC gold hedges[81] 23. (c) Fair value hierarchy Long-term incentive plan liabilities, Contingent Consideration, and Nkran Royalty fall within Level 3 of the fair value hierarchy (unobservable market data) - Long-term incentive plan liabilities, Contingent Consideration, and Nkran Royalty fall within Level 3 of the fair value hierarchy (unobservable market data)[82] - ZCC gold hedging instruments and marketable securities fall within Level 1 of the fair value hierarchy (unadjusted quoted prices in active markets)[82] 23. (d) Financial instrument risks The Company is exposed to credit, liquidity, and market risks (interest rate, foreign currency, and gold price) - The Company is exposed to credit risk on cash and cash equivalent balances and value added tax receivables, considered low based on historical collection[85][86] - Liquidity risk is managed through planning and budgeting, with the Company believing it can meet obligations through cash balances and AGM cash flows, though influenced by gold prices[87][88] - Market risk includes interest rate risk (affecting fair value of contingent consideration and Nkran royalty), foreign currency risk (US dollar vs. Canadian dollar and Ghanaian Cedi), and gold price risk (affecting revenue and financial instruments)[90][93][94] 24. Segmented information Galiano Gold Inc. operates with one reportable segment, the Asanko Gold Mine (AGM), and provides segmented information based on geographic location (Canada and Ghana) - The Company has one reportable segment, the AGM, and provides segmented information based on geographic location[96] | Geographic Allocation (June 30, 2025) | Canada ($ thousands) | Ghana ($ thousands) | Total ($ thousands) | | :------------------------------------ | :------------------- | :------------------ | :------------------ | | Total assets | 76,661 | 483,476 | 560,137 | | Total liabilities | 84,141 | 233,503 | 317,644 | | Geographic Allocation (Six months ended June 30, 2025) | Canada ($ thousands) | Ghana ($ thousands) | Total ($ thousands) | | :----------------------------------------------------- | :------------------- | :------------------ | :------------------ | | Revenue | - | 173,894 | 173,894 | | Net (loss) income and comprehensive (loss) income for the period | (9,505) | 1,667 | (7,838) | 24. Geographic information The Company's single reportable segment is the Asanko Gold Mine (AGM) - The Company's single reportable segment is the Asanko Gold Mine (AGM)[96] 24. Geographic allocation of total assets and liabilities As of June 30, 2025, Ghana accounted for $483.5 million (86.3%) of total assets and $233.5 million (73.5%) of total liabilities - As of June 30, 2025, Ghana accounted for $483.5 million (86.3%) of total assets and $233.5 million (73.5%) of total liabilities[97] 24. Geographic allocation of the Statements of Operations and Comprehensive Income (Loss) For the six months ended June 30, 2025, all revenue of $173.9 million was generated in Ghana - For the six months ended June 30, 2025, all revenue of $173.9 million was generated in Ghana[101] - Ghana reported a net income of $1.7 million for the six months ended June 30, 2025, while Canada reported a net loss of $9.5 million[101]