Interview with Nick Brodie, Director & CEO of Golconda Gold Ltd

Our previous interview: https://www.cruxinvestor.com/posts/galane-gold-gg-addressing-issues-head-on-ready-for-2022-1398

Recording date: 17th January 2024

Golconda Gold Positioned to Unlock Value from Long-Life South African Asset

Gold miner Golconda Gold operates two assets - the Galaxy mine in South Africa and the Summit project in New Mexico. Galaxy is an underground mine with over 130 years of production history and permitted capacity for 50,000 tons per month of ore processing. However, it is only operating at around 15,000 tons per month currently. Through a relatively straightforward expansion plan, Golconda aims to ramp up Galaxy to produce 40,000 ounces of gold per year within the next 3-4 years.

The key enabler for this production growth is a recent $5 million streaming agreement secured from Empress Capital. Golconda will deliver the first 8,000 ounces produced to Empress at 20% of the prevailing gold price. Thereafter, Empress is entitled to a reduced 2% royalty over an additional 12,000 ounces, before dropping down to a 1.5% life-of-mine royalty. This customized and capped gold stream provides non-dilutive funding for Golconda to purchase necessary expansion equipment and undertake development to open up more stoping areas underground.

Importantly, the expansion is completely within the footprint of existing mining works and utilizes Golconda's permitted 2.5 million ounce mineral resource, of which just over 50% has been delineated so far. At the target 40,000 ounce annual rate, Galaxy's current 1.5 million ounce resource could theoretically support over 35 additional years of mine life with further exploration upside from neighboring ore bodies.

Previous technical challenges with flooding and equipment reliability have impacted Galaxy's production consistency. However, Golconda's experienced management team has addressed these issues, putting in place upgraded pumping infrastructure. Meanwhile, new funding will facilitate maintenance and equipment availability improvements to minimize downtime. From this more reliable production base, Galaxy's output is envisaged to double within the next year.

Beyond Galaxy, Golconda also owns the Summit project - a previously producing gold-silver project in New Mexico with significant existing infrastructure. A 2022 Preliminary Economic Study defined a 50,000 ounce gold equivalent potential operation over a 7-year mine life at all-in sustaining costs below $900 per ounce. Subject to sourcing $7-8 million in project financing through an offtake contract or additional streaming, Summit could provide valuable production diversification and cash flow upside for Golconda investors.

With excess process capacity, established resources, and experienced operational management, Golconda Gold presents a unique value investment opportunity. Near term funded growth towards 40,000 ounces per year of low-cost gold production could be just the start of Galaxy's renaissance.

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View Golconda Gold's company profile: https://www.cruxinvestor.com/companies/golconda-gold

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