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Galiano (GAU) Reports Solid Y/Y Increase in Q3 Earnings
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Galiano Gold (GAU - Free Report) reported adjusted earnings per share of 5 cents for third-quarter 2023, marking a 400% improvement from adjusted earnings per share of 1 cent in the prior-year quarter. Earnings were higher in the quarter as the company recorded its share of net earnings in the Asanko Gold Mine (“AGM”) joint venture in comparison to nil contribution in the year-ago quarter.
The AGM is a 50:50 joint venture (JV) with Gold Fields Limited, which is managed and operated by Galiano.
Q3 Results of the AGM Joint Venture
Revenues were around $68 million in the quarter under review, down 12% year over year. The downside resulted from a 22% reduction in sales volume, which was offset by a 13% increase in the average realized gold price. The company sold 35,522 ounces of gold at an average realized price of $1,902 per ounce in the quarter.
Galiano Gold Inc. Price, Consensus and EPS Surprise
During the July-September quarter, the mine recorded gold production of 35,779 ounces, which was down 18.5% year over year. The AGM processing plant achieved a milling throughput of 1.6 million tons of ore processed at a grade of 0.8 grams per ton in the quarter. This takes the mine’s year-to-date total output to 102,130 ounces.
The JV reported total cash operating costs of $1,056 per ounce, up 5.5% year over year. Total all-in-sustaining costs (AISC) of $1,445 per ounce were 23% higher than the prior-year quarter’s tally. This increase was due to higher total cash costs per ounce and increased sustaining capital expenditures to support the restart of mining operations in the fourth quarter of 2023, construction of water treatment facilities and raising the height of the tailings storage facility.
Production costs declined 15% year over year to $35.6 million. The JV reported income from mine operations of $23.7 million in the third quarter of 2023, which was down 7.6% from the year-ago quarter’s income of $25.7 million. The decline was mainly attributed to lower sales, which was offset by a decline in the total cost of sales.
Adjusted EBITDA for the venture was $25.5 million in the quarter, up 14.4% compared with the prior-year quarter’s $22.3 million.
The AGM JV had cash and cash equivalents of $136.9 million as of Sep 30, 2023, compared with $91.3 million as of Dec 31, 2022. The JV generated positive cash flow from operations of $39.7 million compared with $26.1 million in the third quarter of 2022.
Galiano’s Highlights
Adjusted EBITDA was $10.3 million against a loss of $2.1 million in the year-ago quarter as the company recorded its share of the JV’s income.
Net income was $11.4 million in the third quarter of 2023, much higher than $1.3 million in the year-ago quarter. This was mainly due to Galiano Gold recording its share of the AGM JV’s third-quarter net earnings of $9.6 million. In the year-ago quarter, the company had not recognized its share in the JV’s net earnings as the estimated recoverable amount of GAU’s investment in the JV was nil.
Galiano’s cash and cash equivalents were $56 million at the end of the third quarter of 2023, flat compared with 2022 end. The company used $0.1 million of cash in operating activities in the third quarter of 2023 against an inflow of $1.5 million in the third quarter of 2022. This was due to working capital movements, specifically related to the company's service fee receivable from the joint venture. The company has a debt-free balance sheet.
Outlook
Full-year AISC guidance has been revised to a range of $1,500 per ounce to $1,600 per ounce. This is lower than the earlier stated $1,650-$1,750 per ounce due to higher gold sales and the timing of sustaining capital expenditures.
GAU expects gold production to be near the top end of guidance of between 120,000 ounces and 130,000 ounces in 2023.
Price Performance
Galiano’s shares have gained 5.6% compared with the industry’s 5.5% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Galiano currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , Universal Stainless & Alloy Products, Inc. (USAP - Free Report) and The Andersons Inc. (ANDE - Free Report) . CRS sports a Zacks Rank #1 (Strong Buy) and USAP and ANDE each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.3%. The Zacks Consensus Estimate for CRS’ fiscal 2024 earnings is pegged at $3.57 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days. Its shares have gained 65% in a year’s time.
Universal Stainless & Alloy Products has an average trailing four-quarter earnings surprise of 44.4%. The Zacks Consensus Estimate for USAP’s 2023 earnings is pegged at 27 cents per share. Earnings estimates have been unchanged in the past 60 days. USAP’s shares have gained 96% in the last year.
The consensus estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. ANDE shares have rallied around 32% in a year.
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Galiano (GAU) Reports Solid Y/Y Increase in Q3 Earnings
Galiano Gold (GAU - Free Report) reported adjusted earnings per share of 5 cents for third-quarter 2023, marking a 400% improvement from adjusted earnings per share of 1 cent in the prior-year quarter. Earnings were higher in the quarter as the company recorded its share of net earnings in the Asanko Gold Mine (“AGM”) joint venture in comparison to nil contribution in the year-ago quarter.
The AGM is a 50:50 joint venture (JV) with Gold Fields Limited, which is managed and operated by Galiano.
Q3 Results of the AGM Joint Venture
Revenues were around $68 million in the quarter under review, down 12% year over year. The downside resulted from a 22% reduction in sales volume, which was offset by a 13% increase in the average realized gold price. The company sold 35,522 ounces of gold at an average realized price of $1,902 per ounce in the quarter.
Galiano Gold Inc. Price, Consensus and EPS Surprise
Galiano Gold Inc. price-consensus-eps-surprise-chart | Galiano Gold Inc. Quote
During the July-September quarter, the mine recorded gold production of 35,779 ounces, which was down 18.5% year over year. The AGM processing plant achieved a milling throughput of 1.6 million tons of ore processed at a grade of 0.8 grams per ton in the quarter. This takes the mine’s year-to-date total output to 102,130 ounces.
The JV reported total cash operating costs of $1,056 per ounce, up 5.5% year over year. Total all-in-sustaining costs (AISC) of $1,445 per ounce were 23% higher than the prior-year quarter’s tally. This increase was due to higher total cash costs per ounce and increased sustaining capital expenditures to support the restart of mining operations in the fourth quarter of 2023, construction of water treatment facilities and raising the height of the tailings storage facility.
Production costs declined 15% year over year to $35.6 million. The JV reported income from mine operations of $23.7 million in the third quarter of 2023, which was down 7.6% from the year-ago quarter’s income of $25.7 million. The decline was mainly attributed to lower sales, which was offset by a decline in the total cost of sales.
Adjusted EBITDA for the venture was $25.5 million in the quarter, up 14.4% compared with the prior-year quarter’s $22.3 million.
The AGM JV had cash and cash equivalents of $136.9 million as of Sep 30, 2023, compared with $91.3 million as of Dec 31, 2022. The JV generated positive cash flow from operations of $39.7 million compared with $26.1 million in the third quarter of 2022.
Galiano’s Highlights
Adjusted EBITDA was $10.3 million against a loss of $2.1 million in the year-ago quarter as the company recorded its share of the JV’s income.
Net income was $11.4 million in the third quarter of 2023, much higher than $1.3 million in the year-ago quarter. This was mainly due to Galiano Gold recording its share of the AGM JV’s third-quarter net earnings of $9.6 million. In the year-ago quarter, the company had not recognized its share in the JV’s net earnings as the estimated recoverable amount of GAU’s investment in the JV was nil.
Galiano’s cash and cash equivalents were $56 million at the end of the third quarter of 2023, flat compared with 2022 end. The company used $0.1 million of cash in operating activities in the third quarter of 2023 against an inflow of $1.5 million in the third quarter of 2022. This was due to working capital movements, specifically related to the company's service fee receivable from the joint venture. The company has a debt-free balance sheet.
Outlook
Full-year AISC guidance has been revised to a range of $1,500 per ounce to $1,600 per ounce. This is lower than the earlier stated $1,650-$1,750 per ounce due to higher gold sales and the timing of sustaining capital expenditures.
GAU expects gold production to be near the top end of guidance of between 120,000 ounces and 130,000 ounces in 2023.
Price Performance
Galiano’s shares have gained 5.6% compared with the industry’s 5.5% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Galiano currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , Universal Stainless & Alloy Products, Inc. (USAP - Free Report) and The Andersons Inc. (ANDE - Free Report) . CRS sports a Zacks Rank #1 (Strong Buy) and USAP and ANDE each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.3%. The Zacks Consensus Estimate for CRS’ fiscal 2024 earnings is pegged at $3.57 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days. Its shares have gained 65% in a year’s time.
Universal Stainless & Alloy Products has an average trailing four-quarter earnings surprise of 44.4%. The Zacks Consensus Estimate for USAP’s 2023 earnings is pegged at 27 cents per share. Earnings estimates have been unchanged in the past 60 days. USAP’s shares have gained 96% in the last year.
The consensus estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. ANDE shares have rallied around 32% in a year.