Golconda Gold - Streaming-Funded Production Growth Plan Offers Leverage to Gold Price Upside

• Golconda Gold has two assets - a producing mine, Galaxy, in South Africa, and Summit in New Mexico
• Consolidated in 2023 by selling a 3rd asset, increasing Galaxy production, completing Summit PEA, and repaying $5M facility
• Secured $5M funding from Empress Royalty in exchange for a gold stream to expand Galaxy production to 40,000 oz over 3-4 years
• Seeking project financing for Summit to restart production without equity dilution
• Long-term growth potential at Galaxy with significant additional resources and exploration upside

Focused on Expanding Low-Cost South African Mine Production After Balance Sheet Cleanup

Gold producer Golconda Gold is looking to ramp up production at its Galaxy mine in South Africa to 40,000 ounces per year over the next 3-4 years, after consolidating its business in 2023. With new funding secured, the company is positioned to boost output at the low-cost operation that has over 130 years of production history. Additionally, Golconda is seeking non-dilutive financing to restart its Summit project in New Mexico, which could produce another 15,000 ounces per year.

"What we did in 2023 was just consolidate the company, clean it up and move Galaxy project on," said CEO Nick Brodie in a recent interview. This consolidation included selling its third asset Mupane in Botswana to eliminate $17 million in liabilities and streamline Golconda's focus.

The company also increased Galaxy's production by 20% to 9,000 ounces last year, despite some operational challenges like flooding and equipment issues. Galaxy currently produces between 500-1,000 ounces per month from an ore processing capacity of 50,000 tons per month. So there is significant room to expand with additional mining equipment.

To fund this growth, Golconda secured a $5 million streaming agreement from Empress Royalty in exchange for 1% of Galaxy's gold production. As Brody explained, "We got a stream deal from Empress. It's a $5 million facility and in exchange for that $5 million and they take a 3.5% royalty."

Interview with Chief Executive Officer, Nick Brodie

He added, "What we liked about that deal is this is more of a streaming deal. People see it as giving away the future. This has got an end date."

The key advantage of Galaxy is its simple, low-risk expansion potential from known and permitted ore bodies, with no need for new infrastructure. As Brodie emphasized, "I'm not going to pretend South Africa is straightforward...But we're permitted, we have capacity all across the operation there shouldn't be anything that we shouldn't be able to handle ourselves and push ahead."

Golconda's growth roadmap at Galaxy involves using the new funding to purchase additional equipment over the next 6-12 months. This will support increased development and stoping to open up more mining faces. "You should see...maybe next year, we could look at a doubling of production," Brody noted.

Then over the following 2-3 years, the plan is to ramp up monthly processing toward the full 50,000 tons capacity.

"Ramping up to 40,000 will take us about 3 years but the first step is getting this cash in and giving ourselves that leg up," Brodie stated.

Longer-term, Galaxy also boasts significant resource expansion potential, beyond the currently permitted Princeton and Galaxy ore bodies that host over 1.5 million ounces of Golconda's 2.5 million ounce resource. As Brody highlighted, "If we're only producing 40,000 ounces a year. I think we've got another 130 years in front of us."

In addition to growing Galaxy, Golconda is also working to bring its Summit project in New Mexico back into production after completing a Preliminary Economic Assessment (PEA) in 2022. The PEA outlined a 7-year, 50,000 ounce gold equivalent life of mine, with all-in sustaining costs under $900 per ounce at the time. Summit requires $7-8 million to restart operations, which Golconda hopes to raise through an off-take agreement or additional streaming deal without further equity financing. The company has flexibility on timing, with the project costing around $200,000 per year to sit idle as it searches for the right funding partner.

With a cleaned-up balance sheet, existing cash flows from Galaxy, and a two-pronged expansion strategy, Golconda Gold presents an attractive investment opportunity. Near-term production growth could be achieved relatively simply at Galaxy, while longer-term resource upside creates significant additional value potential. Meanwhile, restarting the Summit project provides investors exposure to a second asset with no share dilution. For risk-tolerant natural resource investors, Golconda warrants consideration.

Investment Thesis for Golconda Gold

• Expanding production from stable, permitted South African mine with over 130 years of operations history
• Low technical risk plan to increase well-understood Galaxy mine output from 10,000 oz/year to 40,000 oz/year
• New $5M funding from Empress Capital secures near-term production growth
• Potential to self-fund further expansion from internal cash flows at higher production rates
• Large 2.5M oz gold resource offers long mine life with further exploration upside
• Second asset, Summit Project in New Mexico, provides production diversification upside if funded
• Existing US investor Waterton supportive of value-accretive restart financing
• Proven management team with track record of consolidation and operational improvement

Golconda Gold presents an investment opportunity centered around growing low-cost gold production from its Galaxy mine in South Africa. With the balance sheet cleaned up and new external funding secured, the company aims to double output within a year and achieve 40,000 oz/year within 3-4 years. Cash flows from higher production can then support further expansion and resource growth over its +130 year mine life. Restarting the Summit Project later with non-dilutive financing would provide added diversification. For investors comfortable with South African mining and development execution risks, Golconda warrants consideration given its production growth outlook and strong long-term potential.