Galane Gold, the un-hedged gold producer and explorer with mining operations and exploration tenements in Botswana, says a new five-year mine-plan that will form the guide for the company’s short-term goals and long-term strategy, has been approved.
The company said the mine plan was given the go ahead based on a gold price of $1,200 per ounce, which has provided us with a sustainable path forward while retaining flexibility.
Galane Gold CEO, Nick Brodie said the key component of the plan is the completion of the development of Tau underground.
“We therefore expect that our cash position will decline in the next two quarters as we fund this development, but based on our current mine plan we expect to be cash flow positive in 2015,” Brodie said in a statement accompanying the company’s financial results for the year ended December 31, 2014.
Galane has previously disclosed its intention to exploit the reported measured and indicated mineral resources of approximately 128,600 ounces of gold for Tau through underground mining. The company says it expects to commence stoping in Q3 2015.
“Development will in some instances be through ore and it is expected that Tau will provide ore to the plant between now and the commencement of stoping. During the underground development phase, the company intends to commence exploration from underground to attempt to confirm the extension of the Tau ore body at depth.”
The other resources that the company intends utilising in 2015 include Golden Eagle, Tekwane, and Tholo Pit. However, the Botswana Stock Exchange listed company revealed that the mine plan is subject to change according to the prevailing gold price whereby it will adopt the appropriate plan for that prevailing gold price environment.
Galane reported net earnings after tax for 2014 of $1,876,608 and closing cash balance of $9.7m, which was a reduction of $1.5m on the balance at the end of 2013, but reflecting that the company invested over $4.3m in the development of Tau underground.
It said it produced 30,791 ounces of gold adding that production during the year was affected by the failure of the SAG mill motor, which has since been resolved.
The company was covered for the failure under its business interruption insurance and has agreed to a final claim with its insurers for $1.8m after deductible ($0.8m had been paid at the year-end).
“The annual results show that Galane has the flexibility and the management team to deliver against its two key objectives of maximising cash-flow and extending the operating life of our mine. This is despite the challenge of the SAG mill motor failing in May 2014 and the depressed gold price,” added Brodie.