Galane Gold (GG) - African Gold Player has 50% Insider Ownership

Galane Gold is a gold explorer and producer with gold mining properties and exploration tenements in South Africa and Botswana. These are 2 solid jurisdictions. Galane Gold has experienced quite a lot of success recently. the share price went up from an April low of C$0.08 to a peak of C$0.34 in July. The share price has now receded slightly to C$0.24. This is not one of the best performing gold stocks we have reviewed, but contrarian investors who have tripled their money will not be complaining.

Interview with Ravi Sood, Chairman of Galane Gold (TSX-V: GG).

The company was founded in 2007 and was first listed on the CVE in September of 2011. In terms of its CVE performance, this is a story that has been waiting for growth for 9 years. 2011 to early 2013 were strong years for the stock, but a period of stagnancy followed, with low gold prices and a declining market cap driven by bearish sentiment.

Corporate History

The formation of this gold player as it exists today is hard to decipher. Galane Gold acquired Gallery Gold from IAMGOLD Corp. in August 2011. Gallery Gold owned 100% of Botswana gold producer, Mupane Gold Mining. Mupane had been producing gold at the Mupane operation since 2005 and had experienced some success. Mupane is now Galane Gold's flagship gold asset. It has produced over 700,000oz of gold since 2005 and is Galane's first source of gold production.

The company's run of M&A continued when it acquired South American gold player, Galaxy Gold, in 2015. As part of this deal, Galane Gold acquired the Galaxy Project, a 58.6km² land package within the prolific Barberton Greenstone Belt. Operations resumed here in 2015.

The Goal

In the long run, Galane Gold wants to leverage the experience of its strong management team to turn the company into a sustainable and meaningful gold mining vessel that can generate value across multiple gold cycles. The chief priority right now appears to be focussing on growing the resource and life-of-mine at Mupane, as the company targets a +1moz resource. The project appears to have exploration upside because the land package is situated on the Tati Greenstone Belt, which is part of the larger Zimbabwe Craton; this is a well-known and often exciting area for gold discoveries and production, with 77Moz of gold coming from here historically. However, right now, Galane Gold considers itself to be the only major Botswanan gold producer.

M&A could also form a part of this growth strategy, but for now, Galane Gold is focussing on its newly developed underground decline in the Tau orebody. The company's processing plant consists of crusher, mill, floatation and CIL with recently added gravity gold to improve on the recovery of free gold ore.

A Major on the Scene

A major gold mining company came into the fold in March 2018: B2Gold. Galane agreed on an earn-in agreement with the seasoned gold producer. B2Gold can acquire up to a 70% stake in Galane by investing a total of $4M over 3-years, covering 70% of the JV costs, targeting a +1Moz resource.

This appears to be progressing well. In excess of 120 exploration targets have been identified based on geochemistry and aero-magnetic operations. With B2Gold funding the exploration of many of these mining licences, Galane Gold will be focussing its time and capital on mining licences that are outside of the JV.

Lastly, let's take a quick look at Galane Gold's Q2/20 financials:

• Earnings from mining operations: $1,980,054.
• Positive cash flows from operating activities (before working capital): $3,193,312.
• Mupane had 50 days of production disruption due to COVID-19-induced restrictions. However, it still managed to produce 5,691oz gold.
• Average gold sales price: $1,716/oz.
• Galaxy had 66 days of production disruption due to COVID-19-induced restrictions. It managed to produce 855oz of contained gold in concentrate.

With 54% insider ownership, is this a strong gold investment opportunity?

To find out more, go to the Galane Gold website.