Site Tour: Galane Gold (CVE:GG) A Rare Junior Operating Mines

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Galane Gold (TSX.V:GG) (OTCQB:GGOF) is a junior mining company that is different from most others within the space.  Instead of drilling exploration holes and searching for gold, they have 2 gold-producing mines in Africa.  The Mupane in Botswana and the Galaxy mine in South Africa are their core assets which also have expansion plans.  They gave us a tour of both sites and we were impressed at the sheer scale of the Galane operation.

Transcript

Nick Brodie – Galane Gold CEO: Galane Gold was set up in 2011. We set up to acquire Mupane, which is an asset in Botswana, and it was bought for mining gold. And we saw a great opportunity there. It was a little bit of an unloved asset but by the sentiment because it wasn’t the right size for mining gold. We transitioned it from an open pit to an underground, we’ve reduced the operating costs from 1,400 down to 1,050, and we’ve got production up to about 35,000 ounces on average and an all- in of 1,050. 2015, we decided that we needed to take that skill set, that management team that I’d put together, and put them into a different asset, and we acquired Galaxy Gold, which is here in South Africa. In the last year, we raised $10 million, and we’re now putting that money into this asset. We’ve got the plant running now on a 15,000, and the idea is to expand it to 30,000 as we go through the year. Both operations are greenstone operations, and we’re talking about wide ore bodies. So if we got to Mupane, the ore body there is about 40 to 50 metres wide, 100 metre strike, and we’re doing long-hole stoking, and it’s mechanized mining. So, small workforce; it’s very easy mining. One of the reasons why we like this asset here in Galaxy is exactly the same, so the Galaxy ore body is again, 40 metres wide, 100-metre strike, and we’re using the same mining method. In fact, we’re using the same mining contractor. The wonderful thing about Galaxy is it’s sizeable. We’ve taken on with a 15,000-tonne plant, which we’ve refurbished, and the production costs there are going to be about $900 an ounce. But as we ramp it up, then we’ve got a plan we’re putting together now to take it up to 30,000, and again, the costs can go down to 800. And then we’ve got another plan to take it up to 60,000. And how can we do that? Well, easily, because the plant itself is scalable; it’s just doing a crushed mill float, and we’ve already bought crushers which are sized up to 60,000. We’ve bought a second-hand mill which is sized up to 60,000, and when we get a 60,000, we’re talking about all-in costs of under 700. So it’s a great asset which we can scale up and reduce our costs.  So we’re standing in the area that we’re putting in for the foundations for the new mill. When we acquired this mine, we acquired it basically at a liquidation, and the last two, three years, we’ve been refurbishing as we’ve been going along. But now we’re doing the big push. So you can probably see it behind me, that we started work on repainting, putting it back to the condition it should be in, and it’ll look like Mupane in about 12 months’ time from now.

Wayne Hatton-Jones Galane Gold COO: I’m Wayne Hatton-Jones, the Chief Operating Officer for Galane Gold. We have two operations, one being Mupane Gold Mine and the other one being Galaxy, down in Barberton. My responsibility is to look after the operations both here and down in South Africa. In the mining industry you get an oxidal body and a sulfidal body; we focus on the difficult ores in the sulfidal bodies, like Mupane and at Galaxy. We are basically doing a crush small flotation, and we treat the concentrate here in a high cyanidation followed by oxygen injection. And down at Galaxy, we’ll be doing a crush small float and we’ll be dispatching the concentrate to an offtake. We make a point of actually fixing up wherever we’ve made an impact. It’s also really good; the grass and vegetation has come back. You’ll see the impala, the kudu, as well as the klipspringers. We’ve also put quite a few watering points in and around the site for the animals to attract them, and they do come in the dry season.

Nick Brodie: So Galane is an unusual junior: it has production. A lot of juniors, you’re looking at exploration potential. We have an expansion program, so adding ounces, taking us up to potential 90,000 ounces, reducing our all-in to under 900, the best in the whole of the business. So if you go to Mupane, for example, when I started there, there was 18 expanse; we’re only down to two now, so that transitioning skills across to the local community as well, and taking that senior management team, once we’ve trained everyone up and put them onto another asset. Long term, we have an opportunity to go into a much bigger operation.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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