GAU Galiano Gold Inc

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934

For the month of August 2024

Commission File No. 001-33580

GALIANO GOLD INC.
(Translation of registrant's name into English)

Suite 1640, 1066 West Hastings Street
Vancouver, British Columbia, V6E 3X1, Canada
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F

Form 20-F  [  ]  Form 40-F [X]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)  [  ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)  [  ]

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SUBMITTED HEREWITH

Exhibits 99.1 and 99.2 included with this report are hereby incorporated by reference as exhibits to the registrant's registration statement on Form F-10 (File No. 333-268945) (the "Registration Statement"), and to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.

Exhibits
99.1	Condensed consolidated interim financial statements for the three and six months ended June 30, 2024 and 2023
99.2	Management's Discussion and Analysis for the three and six months ended June 30, 2024 and 2023
99.3	CEO certification of interim filings
99.4	CFO certification of interim filings
99.5	News release dated August 8, 2024

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GALIANO GOLD INC.

/s/ Matthew Freeman
________________________________
Matthew Freeman
Chief Financial Officer

Date:  August 8, 2024

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GALIANO GOLD INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

UNAUDITED

For the three and six months ended June 30, 2024 and 2023

 

TABLE OF CONTENTS

Condensed Consolidated Interim Statements of Financial Position	2
Condensed Consolidated Interim Statements of Operations and Comprehensive Income	3
Condensed Consolidated Interim Statements of Changes in Equity	4
Condensed Consolidated Interim Statements of Cash Flow	5
Notes to the Condensed Consolidated Interim Financial Statements	6-33

 

 

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GALIANO GOLD INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

AS AT JUNE 30, 2024 AND DECEMBER 31, 2023

(In thousands of United States Dollars)

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Approved on behalf of the Board of Directors:

"Matt Badylak"		"Greg Martin"
Director		Director

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GALIANO GOLD INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(In thousands of United States Dollars, except dollar per share amounts)

			Three months ended						Six months ended
			June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
	Note		$			$			$			$
Revenue	16		63,963			-			95,658			-
Cost of sales:
Production costs	17		(30,293	)		-			(52,455	)		-
Depreciation and depletion	9		(4,678	)		-			(7,660	)		-
Royalties	18		(3,860	)		-			(5,765	)		-
Total cost of sales			(38,831	)		-			(65,880	)		-
Income from mine operations			25,132			-			29,778			-
General and administrative expenses	19		(6,632	)		(3,148	)		(14,325	)		(6,998	)
Exploration and evaluation expenditures			(2,040	)		(472	)		(2,649	)		(1,885	)
Share of net income related to joint venture	8		-			11,007			2,432			20,314
Service fee earned as operators of joint venture	20		-			1,418			976			2,836
Gain on derecognition of equity investment in joint venture	8		118			-			1,416			-
Income from operations and joint venture			16,578			8,805			17,628			14,267
Transaction costs	4		(102	)		-			(2,401	)		-
Finance income	21(a)		1,434			3,133			3,940			6,149
Finance expense	21(b)		(8,259	)		(6	)		(13,984	)		(12	)
Foreign exchange (loss) gain			(820	)		29			(1,111	)		50
Net income and comprehensive income for the period			8,831			11,961			4,072			20,454
Net income attributable to:
Common shareholders of the Company			8,831			11,961			4,072			20,454
Non-controlling interest	15		-			-			-			-
Net income for the period			8,831			11,961			4,072			20,454
Weighted average number of shares outstanding:
Basic	22		254,974,179			224,943,453			244,242,466			224,943,453
Diluted	22		261,481,062			225,292,468			249,286,037			224,968,681
Net income per s hare attributable to common shareholders:
Basic			0.03			0.05			0.02			0.09
Diluted			0.03			0.05			0.02			0.09

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

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GALIANO GOLD INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(In thousands of United States Dollars, except for number of common shares)

															Non-
									Equity			Accumulated			controlling
			Number of			Share capital			reserves			deficit			interest			Total equity
	Note		shares			$			$			$			$			$
Balance as at December 31, 2022			224,943,453			579,591			51,998			(457,898	)		-			173,691
Share-based compensation expense	14(a)		-			-			517			-			-			517
Net income and comprehensive income for the period			-			-			-			20,454			-			20,454
Balance as at June 30, 2023			224,943,453			579,591			52,515			(437,444	)		-			194,662
Balance as at December 31, 2023			224,972,786			579,619			53,112			(431,813	)		-			200,918
Issuance of common shares:
Business combination, net of share issuance costs	4		28,500,000			32,449			-			-			-			32,449
Exercise of stock options	14(a)		3,263,994			3,759			(1,179	)		-			-			2,580
Share-based compensation expense	14(a)		-			-			579			-			-			579
Net income and comprehensive income for the period			-			-			-			4,072			-			4,072
Balance as at June 30, 2024			256,736,780			615,827			52,512			(427,741	)		-			240,598

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

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GALIANO GOLD INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(In thousands of United States Dollars)

			Three months ended						Six months ended
			June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
	Note		$			$			$			$
Operating activities:
Net income for the period			8,831			11,961			4,072			20,454
Adjustments for:
Depreciation and depletion	9,19		4,712			36			7,728			72
Share-based compensation	19		2,996			893			8,124			2,490
Share of net income related to joint venture	8		-			(11,007	)		(2,432	)		(20,314	)
Gain on derecognition of equity investment in joint venture	8		(118	)		-			(1,416	)		-
Transaction costs	4		102			-			2,401			-
Finance income	21(a)		(1,434	)		(3,133	)		(3,940	)		(6,149	)
Finance expense	21(b)		8,253			4			13,978			9
Unrealized foreign exchange (gain) loss			200			(13	)		122			(3	)
Operating cash flow before working capital changes			23,542			(1,259	)		28,637			(3,441	)
Change in non-cash working capital	24		(19,079	)		(118	)		(11,146	)		1,521
Cash provided by (used in) operating activities			4,463			(1,377	)		17,491			(1,920	)
Investing activities:
Acquisition of 45% interest in joint venture from Gold Fields	4		-			-			(65,000	)		-
Cash and cash equivalents assumed on acquisition	4		-			-			112,502			-
Transaction costs paid	4		(102	)		-			(2,401	)		-
Redemption of preferred shares in joint venture	7		-			-			25,000			-
Expenditures on mineral properties, plant and equipment	9		(12,278	)		(5	)		(19,581	)		(34	)
Interest received	21(a)		1,433			708			2,281			1,381
Cash (used in) provided by investing activities			(10,947	)		703			52,801			1,347
Financing activities:
Payment of lease liabilities	10		(3,249	)		(31	)		(4,327	)		(62	)
Shares issued for cash on exercise of stock options	14(a)		2,399			-			2,580			-
Share issuance costs			-			-			(40	)		-
Cash used in financing activities			(850	)		(31	)		(1,787	)		(62	)
Impact of foreign exchange on cash and cash equivalents			(431	)		35			(736	)		27
(Decrease) increase in cash and cash equivalents during the period			(7,765	)		(670	)		67,769			(608	)
Cash and cash equivalents, beginning of period			130,804			56,173			55,270			56,111
Cash and cash equivalents, end of period			123,039			55,503			123,039			55,503
Supplemental cash flow information	24

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

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1. Nature of operations

Galiano Gold Inc. ("Galiano" or the "Company") was incorporated on September 23, 1999 under the Business Corporations Act of British Columbia, Canada.  The Company's head office and principal address is located at 1640 - 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X1, Canada. The Company's registered and records office is located at Suite 3500, 1133 Melville Street, Vancouver, V6E 4E5. The Company's common shares trade on the Toronto Stock Exchange and NYSE American Exchange under the ticker symbol "GAU".

Until March 4, 2024, the Company's principal business activity was the operation of the Asanko Gold Mine ("AGM") through a joint venture arrangement (the "JV") associated with the Company's then 45% equity interest in the entity that held the AGM mining licenses and gold exploration tenements (see note 8).

On March 4, 2024 (the "Acquisition Date"), the Company acquired Gold Fields Limited's ("Gold Fields") 45% interest in the AGM (the "Acquisition"). As of the Acquisition Date, the Company owns a 90% interest in the AGM with the Government of Ghana continuing to hold a 10% free-carried interest (non-controlling interest). Refer to note 4 for further details on the Acquisition and preliminary purchase price accounting.

The AGM consists of four main open-pit mining areas: Abore, Miradani North, Nkran and Esaase, multiple satellite deposits and exploration projects located on the Asankrangwa Gold Belt in the Amansie West District of the Republic of Ghana ("Ghana"), West Africa.

2. Basis of presentation

(a) Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34 - Interim Financial Reporting, using accounting policies consistent with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and Interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"). These condensed consolidated interim financial statements do not include all of the necessary annual disclosures in accordance with IFRS and should be read in conjunction with the Company's audited consolidated annual financial statements for the year ended December 31, 2023.

These condensed consolidated interim financial statements were authorized for issue and approved by the Board of Directors on August 8, 2024.

The accounting policies followed in these condensed consolidated interim financial statements are the same as those applied in the Company's audited consolidated annual financial statements for the year ended December 31, 2023, except as described below. The accounting policies of the JV outlined in the Company's annual financial statements for the year ended December 31, 2023 are the same accounting policies applied by the consolidated Galiano group in these financial statements.

Business combinations

Upon the acquisition of a business, the acquisition method of accounting is applied, whereby the purchase consideration is allocated to the identifiable assets, liabilities and contingent liabilities (identifiable net assets) acquired on the basis of fair value at the date of acquisition.

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2. Basis of presentation (continued)

When the cost of the acquisition exceeds the fair value attributable to the Company's share of the identifiable net assets, the difference is recorded as goodwill, which is not amortized and is reviewed for impairment annually or more frequently when there is an indication of impairment.

If the fair value attributable to the Company's share of the identifiable net assets exceeds the cost of acquisition, the difference is immediately recognized in the Statement of Operations and Comprehensive Income. Acquisition related costs, other than costs to issue equity securities of the Company, including investment banking fees, legal fees, accounting fees, valuation fees, and other professional or consulting fees are expensed as incurred. The cost to issue equity securities of the Company as consideration for the acquisition are reduced from share capital as share issuance costs.

Non-controlling interests are measured either at fair value or at the non-controlling interests' proportionate share of the recognized amounts of the acquirer's identifiable net assets as at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction basis.

Upon the acquisition of control, any previously held interest is re-measured to fair value at the date control is obtained resulting in a gain or loss upon the acquisition of control.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the business combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. These provisional amounts are adjusted during the measurement period (up to 12 months from the acquisition date) to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.

(b) Basis of presentation and consolidation

These condensed consolidated interim financial statements have been prepared on a historical cost basis, except for financial instruments carried at fair value.

All amounts are expressed in thousands of United States dollars, unless otherwise stated, and the United States dollar is the functional currency of the Company and each of its subsidiaries. References to C$ are to Canadian dollars.

These condensed consolidated interim financial statements incorporate the financial information of the Company and its subsidiaries as at June 30, 2024. Subsidiaries are entities controlled by the Company. Control exists when the Company has power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Subsidiaries are included in the consolidated financial statements of the Company from the effective date of acquisition up to the effective date of disposition or loss of control. The results of operations and cash flows of Asanko Gold Ghana Ltd., Adansi Gold Company (GH) Ltd. and Shika Group Finance Limited have been consolidated commencing on March 4, 2024 (refer to note 4).

All significant intercompany amounts and transactions between the Company and its subsidiaries have been eliminated on consolidation.

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2. Basis of presentation (continued)

The principal subsidiaries to which the Company is a party, as well as their geographic locations, were as follows as at June 30, 2024:

¹ From January 1, 2024 to March 3, 2024, the Company equity accounted for its 45% interest in Asanko Gold Ghana Ltd. and its 50% interest in each of Adansi Gold Company (GH) Ltd. and Shika Group Finance Limited.

² Acquired on March 4, 2024 as part of the Acquisition and name changed from GFI Netherlands B.V. to Galiano Gold Netherlands B.V. on April 2, 2024.

(c) Accounting standards adopted during the period

There were no new accounting standards effective January 1, 2024 that impacted these condensed consolidated interim financial statements.

(d) Accounting standards and amendments issued but not yet adopted

The following standards and interpretations, which may be applicable to the Company, have been issued but are not yet effective as of June 30, 2024:

IFRS 18

On April 9, 2024, the IASB issued IFRS 18, Presentation and Disclosure in Financial Statements, a new standard on presentation and disclosure in financial statements with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to: the structure of the statement of profit or loss, required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity's financial statements; and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general. IFRS 18 will not impact the recognition or measurement of items in the financial statements, but may change what an entity reports as its 'operating profit or loss'. IFRS 18 will apply for reporting periods beginning on or after January 1, 2027 and also applies to comparative information. The Company is evaluating how IFRS 18 will impact the disclosures in its consolidated financial statements in future periods.

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3. Significant accounting judgements and estimates

The preparation of financial statements, in conformity with IFRS, requires management to make judgements, estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Management believes the estimates and assumptions used in these condensed consolidated interim financial statements are reasonable; however, actual results could differ from those estimates and could impact future results of operations and cash flows and reported amounts of assets and liabilities.

The Company's significant accounting judgements and estimates are unchanged as compared to those presented in note 6 of the Company's audited annual consolidated financial statements for the year ended December 31, 2023, except as follows:

Business combinations

Judgements

The Company has concluded that the AGM constitutes a business and, therefore, the acquisition is accounted for in accordance with IFRS 3, Business Combinations. Acquisitions of businesses are accounted for using the acquisition method of accounting.

Estimates

The measurement of consideration transferred and fair value of assets acquired and liabilities assumed required the Company to make certain judgements and estimates taking into account information available at the time of acquisition about future events, including but not limited to: estimates of mineral reserves and resources acquired, exploration potential, future operating costs and capital expenditures, reclamation and closure costs, timing of development of the Nkran pit, future gold prices, discount rates and tax rates. Changes to any of these estimates, based on information available as of the acquisition date, may impact the fair values disclosed in the preliminary purchase price allocation, which would be adjusted retrospectively until the purchase price allocation is finalized within twelve months of the acquisition date.

4. Acquisition of control of AGM

On March 4, 2024, the Company completed the acquisition of Gold Fields' 45% interest in the Asanko Gold Mine JV. Following the closing of the Acquisition, the Company owns a 90% interest in Asanko Gold Ghana Ltd. ("AGGL"), the entity which holds the AGM's mining concessions and licenses, a 100% interest in Adansi Gold Company (GH) Ltd., an entity which holds exploration licenses in Ghana, and a 100% interest in Shika Group Finance Limited, the former JV entity. The Company also acquired a 100% interest in GFI Netherlands B.V., the entity through which Gold Fields held its former 45% interest in the JV.

The objective of the Acquisition is to consolidate ownership of the AGM and obtain control of the asset.

The Company began consolidating the operating results, cash flows and net assets of the AGM commencing on March 4, 2024.

The total consideration payable to Gold Fields comprised the following:

• $65.0 million in cash;

• issuance of 28.5 million common shares of the Company;

• $55.0 million of deferred consideration comprised of a:

  • $25.0 million cash payment on or before December 31, 2025; and

  • $30.0 million cash payment on or before December 31, 2026 (collectively "Deferred Consideration")

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4. Acquisition of control of AGM (continued)

The Deferred Consideration is to be paid in cash subject to the Company's right to satisfy up to 20% of each payment with common shares of the Company, subject to Gold Fields not owning more than 19.9% of the Company's issued and outstanding common shares at that time; and

• $30.0 million cash payment contingently payable upon production of 100,000 gold ounces from the Nkran deposit ("Contingent Consideration").

Gold Fields will also receive a 1% net smelter return royalty on production from the Nkran deposit beginning upon 100,000 gold ounces being produced, and subject to a maximum of 447,000 gold ounces of production ("Nkran Royalty"). Galiano has a right of first refusal on any full or partial disposition of the Nkran Royalty by Gold Fields.

For accounting purposes, the consideration also includes the fair value of the Company's pre-existing investments in the JV, specifically the preferred shares and equity accounted investment.

The estimated fair value of consideration paid to Gold Fields as of the acquisition date is summarized as follows:

(1) The common share consideration fair value is based on a value of $1.14 per share, being the closing price of the Company's common shares on the NYSE American on March 4, 2024.

(2) The Deferred Consideration fair value was estimated using a discounted cash flow model and applying a 6.3% discount rate.

(3) The Contingent Consideration fair value was estimated using a discounted cash flow model and applying a 14.5% discount rate.

(4) The Nkran Royalty fair value was estimated using a discounted cash flow model and applying a forecast gold price of $1,725 per ounce and a discount rate of 14.5%.

The fair value of the Company's previously held 45% interest in the JV is comprised of the fair value of preferred shares amounting to $46.8 million and the fair value of the Company's previous equity investment of $89.7 million.

A preliminary allocation of the purchase price is presented in the table below.

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4. Acquisition of control of AGM (continued)

As at June 30, 2024, the allocation of the purchase price has not been finalized. The Company is continuing its review of estimates of the consideration, inventories, mineral properties, plant and equipment, asset retirement provisions, leases and non-controlling interests. The Company is also still evaluating the deferred tax impacts of the transaction. The Company will finalize the allocation of the purchase price no later than twelve months after the acquisition date.

During the three months ended June 30, 2024, adjustments were made to the preliminary fair values of inventories, mineral properties, plant and equipment and asset retirement provisions. The fair value of inventories decreased by $4.2 million due to a change in assumptions of cost to complete. The fair values of mineral properties, plant and equipment and asset retirement provisions increased by $12.1 million and $7.6 million, respectively, due to a change in the underlying discount rates.

The Company expensed $0.4 million of acquisition-related costs during the year ended December 31, 2023 and another $0.1 million and $2.4 million, respectively, were expensed during the three and six months ended June 30, 2024 and were presented as transaction costs in the Statement of Operations and Comprehensive Income.

Since the acquisition on March 4, 2024, the assets acquired from the AGM contributed $95.7 million of revenue and $23.1 million of net earnings before purchase price adjustments. Had the transaction occurred on January 1, 2024, the AGM would have contributed revenue of $129.6 million and net income of $28.4 million for the six months ended June 30, 2024.

5. Cash and cash equivalents

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6. Inventories

7. Financial assets

On closing of the Acquisition, the Company derecognized its preferred share investment in the AGM JV, which is now eliminated on consolidation. The following table summarizes the change in the carrying amount of the Company's preferred shares held in the JV for the six months ended June 30, 2024 and year ended December 31, 2023:

Prior to closing the Acquisition, the Company re-measured the fair value of the preferred shares to $71.8 million and recorded a positive fair value adjustment of $1.7 million in finance income for the six months ended June 30, 2024 (three and six months ended June 30, 2023 - positive fair value adjustment of $2.4 million and $4.8 million, respectively).

Prior to closing of the Acquisition, the AGM JV made a $25.0 million preferred share redemption to the Company, which was subsequently used to pay Gold Fields a portion of the cash consideration under the Acquisition.

8. Asanko Gold Mine joint venture

On March 4, 2024, the Company ceased to apply the equity method of accounting for its previous 45% interest in the AGM JV. For the period from January 1, 2024 to March 3, 2024, the Company recognized its 45% share of the JV net earnings which amounted to $2.4 million (three and six months ended June 30, 2023 - share of the JV's net earnings of $11.0 million and $20.3 million, respectively).

Prior to closing of the Acquisition, the Company remeasured its equity investment in the AGM JV to fair value and recorded a $1.4 million gain on derecognition of its equity investment in the JV for the six months ended June 30, 2024.

The following table summarizes the change in the carrying amount of the Company's investment in the AGM JV for the six months ended June 30, 2024 and year ended December 31, 2023:

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8. Asanko Gold Mine joint venture (continued)

9. Mineral properties, plant and equipment ("MPP&E")

Depreciation and depletion expense presented above includes $34 and $68 of depreciation expense for the three and six months ended June 30, 2024, respectively, that is presented within general and administrative expenses in the Statement of Operations and Comprehensive Income (three and six months ended June 30, 2023 - $36 and $72 of depreciation expense presented within general and administrative expenses, respectively).  Additionally, depreciation and depletion expense recognized in the Statement of Operations and Comprehensive Income for the three and six months ended June 30, 2024 includes a credit of $1.8 million and $0.4 million to depreciation expense, respectively, related to changes in inventories.

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10. Lease liabilities

The following table shows the movement in lease liabilities of the Company for the six months ended June 30, 2024 and year ended December 31, 2023:

During the three and six months ended June 30, 2024, the Company incurred $17.2 million and $22.4 million relating to variable lease payments under mining services and other mining related contracts which have not been included in the measurement of lease liabilities (three and six months ended June 30, 2023 - nil for both periods).

11. Provisions

(a) Legal provision

A services provider of the AGM filed a dispute with an arbitration tribunal alleging the AGM breached the terms of a services agreement and claimed approximately $25 million in damages. The arbitrator ruled in favour of the AGM that there had not been a breach of any terms of the contract, yet made an award to the counterparty of approximately $13 million plus interest for services rendered. The AGM, consistent with the arbitration ruling, maintains the view that there was no breach of contract and all contractual amounts were paid as due. The AGM therefore is undertaking an appeals process in the Court of Appeal in Ghana. A provision of $7.0 million has been recorded as of June 30, 2024 (December 31, 2023 - $7.0 million), which represents management's best estimate to settle the claim. While the Company cannot reasonably predict the ultimate outcome of these actions, and inherent uncertainties exist in predicting such outcomes, the Company believes the estimated provision is reasonable based on the information currently available.

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11. Provisions (continued)

(b) Asset retirement provisions

The following table shows the movement in asset retirement provisions of the Company for the six months ended June 30, 2024:

The asset retirement provisions consist of reclamation and closure costs for the AGM's mining properties. Reclamation and closure activities include land rehabilitation, dismantling of buildings and mine facilities, ongoing care and maintenance and other costs.

As at June 30, 2024, the AGM's reclamation cost estimates were discounted using a long‐term risk‐free discount rate of 4.4%. The change in estimate during the period was primarily due to accounting for the asset retirement provision in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets post-acquisition rather than under IFRS 3, Business Combinations, which requires a market-based discount rate to be applied to estimated reclamation and closure costs.

12. Deferred and contingent consideration

In accordance with the Acquisition agreement, certain consideration payable to Gold Fields is deferred in time or contingent upon certain future events. The Company has recognized the following financial liabilities at fair value as of the acquisition date and were subsequently remeasured in accordance with IFRS 9, Financial Instruments ("IFRS 9").

(a) Deferred Consideration

$55.0 million of the aggregate consideration payable to Gold Fields is deferred with $25.0 million due on or before December 31, 2025 and $30.0 million due on or before December 31, 2026. The Company estimated the fair value of the Deferred Consideration by discounting the contractual future cash flows (assumed $25.0 million payable on December 31, 2025 and

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12. Deferred and contingent consideration (continued)

$30.0 million payable on December 31, 2026) at a discount rate of 6.3%, resulting in a fair value of $47.6 million as of March 4, 2024. Subsequent to initial recognition, the Deferred Consideration is measured at amortized cost.

For the three and six months ended June 30, 2024, the Company recognized accretion expense of $0.7 million and $1.0 million, respectively, in finance expense in the Statement of Operations and Comprehensive Income.

The following table summarizes the change in the carrying amount of the Deferred Consideration for the six months ended June 30, 2024:

(b) Contingent Consideration

$30.0 million of the aggregate consideration payable to Gold Fields is contingent upon 100,000 gold ounces being produced from the Nkran deposit. The Company estimated the fair value of the Contingent Consideration by discounting forecast future cash flows based upon the expected payment date from the current life of mine plan at a discount rate of 14.5%, resulting in a fair value of $13.3 million as of March 4, 2024.

In accordance with IFRS 3 and IFRS 9, contingent consideration payable by an acquirer in a business combination shall be subsequently measured at fair value through profit or loss.  As such, the Company remeasured the fair value of the Contingent Consideration to $14.2 million as of June 30, 2024 and recognized a $0.4 million and $0.9 million fair value adjustment for the three and six months ended June 30, 2024, respectively, in finance expense in the Statement of Operations and Comprehensive Income.  In determining the fair value at June 30, 2024, the Company applied the same assumptions as of the March 4, 2024 fair value calculation. The Contingent Consideration falls within level 3 of the fair value hierarchy.

The following table summarizes the change in the carrying amount of the Contingent Consideration for the six months ended June 30, 2024:

(c) Nkran Royalty

Gold Fields is entitled to a 1% net smelter return royalty on gold revenue generated from the Nkran deposit beginning upon 100,000 gold ounces being produced, and subject to a maximum of 447,000 gold ounces of production. The Company estimated the fair value of the Nkran Royalty by discounting forecast future cash flows at a discount rate of 14.5%, resulting in

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12. Deferred and contingent consideration (continued)

a fair value of $3.0 million as of March 4, 2024. The gold price assumption applied in estimating future royalty payments was based on long-term consensus prices of $1,725 per ounce.

In accordance with IFRS 3 and IFRS 9, contingent consideration payable by an acquirer in a business combination shall be subsequently measured at fair value through profit or loss. As such, the Company remeasured the fair value of the Nkran Royalty to $3.3 million as of June 30, 2024 and recognized a $0.2 million and $0.3 million fair value adjustment for the three and six months ended June 30, 2024, respectively, in finance expense in the Statement of Operations and Comprehensive Income.  In determining the fair value at June 30, 2024, the Company updated its long-term gold price assumption to $1,850 per ounce. The Nkran Royalty falls within level 3 of the fair value hierarchy.

The following table summarizes the change in the carrying amount of the Nkran Royalty for the six months ended June 30, 2024:

13. Share capital

(a) Authorized:

Unlimited common shares without par value or restrictions.

(b) Issued and outstanding common shares

(c) Base shelf prospectus

On December 21, 2022, the Company filed a final short form base shelf prospectus (the "Prospectus") under which the Company may sell from time-to-time common shares, warrants, subscription receipts, units, debt securities and/or share purchase contracts of the Company, up to an aggregate of $300 million. The Prospectus has a term of 25 months from the filing date. As of June 30, 2024, no securities were issued under the Prospectus.

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14. Equity reserves and long-term incentive plan awards

The Company has a stock option plan and a share unit plan under which restricted share units ("RSUs"), performance share units ("PSUs") and deferred share units ("DSUs") may be awarded to directors, officers, employees and other service providers. All awards under the share unit plan may be designated by the Company's Board of Directors to be settled in either cash, shares or a combination thereof.  As at December 31, 2023, all units previously granted had been determined by the Board to be cash-settled. For awards granted under the share unit plan in 2024, the Board determined that the units would be settled upon vesting in either cash or shares by resolution at that time. Given the Company's historical practice of settling all share units in cash, all units have been treated as cash settled as at June 30, 2024 and are recognized as liabilities at fair value accordingly.

Under the two plans, when combined, the number of shares issuable cannot exceed 9% of the issued and outstanding common shares of the Company. Specifically, shares reserved for issuance under the share unit plan, when designated as equity-settled, may not exceed 5% of the issued and outstanding common shares of the Company. Share units awarded as cash settled units will not be considered in computing the limits of the share unit plan.

RSUs, PSUs and DSUs are cash-settled awards and therefore represent financial liabilities, which are recorded at fair value at each reporting date and adjusted for the completed proportion of the vesting period, with any changes recorded as shared-based compensation expense in the Statement of Operations and Comprehensive Income. The financial liability associated with these cash-settled awards is recorded in accounts payable and accrued liabilities for amounts expected to be settled within one year, and within other non-current liabilities for amounts to be settled in excess of one year, as of the balance sheet date.

(a) Stock options

Options granted typically vest in one-third increments every twelve months following the grant date for a total vesting period of three years. Stock options have a maximum term of five years following the grant date. The fair value of stock options granted is determined using the Black Scholes option pricing model.

The following table is a reconciliation of the movement in stock options for the period:

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14. Equity reserves and long-term incentive plan awards (continued)

For stock options granted during the six months ended June 30, 2024, the following assumptions were applied in the Black Scholes option pricing model:

During the three and six months ended June 30, 2024, the Company recognized $0.2 million and $0.6 million of share-based compensation expense, respectively, relating to stock options (three and six months ended June 30, 2023 - $0.3 million and $0.5 million of share‐based compensation expense, respectively).

During the three and six months ended June 30, 2024, 3,019,993 and 3,263,994 stock options, respectively, were exercised for aggregate gross proceeds to the Company of $2.4 million and $2.6 million, respectively (three and six months ended June 30, 2023 - no stock options exercised).

(b) Restricted Share Units

RSUs granted vest in one-third increments every twelve months following the grant date for a total vesting period of three years. The following table is a reconciliation of the movement in the number of RSUs outstanding for the six months ended June 30, 2024 and year ended December 31, 2023:

For all RSUs granted during the six months ended June 30, 2024, the awards vest in three equal tranches over a service period of three years and had an estimated forfeiture rate of 23.9% (six months ended June 30, 2023 - forfeiture rate of 24.2%).

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14. Equity reserves and long-term incentive plan awards (continued)

The following table is a reconciliation of the movement in the RSU liability for the six months ended June 30, 2024 and year ended December 31, 2023:

(c) Performance share units

PSUs granted prior to December 31, 2023 vest in either one-half or one-third increments every twelve months following the grant date for a total vesting period of two or three years. PSUs granted in 2024 have a cliff vesting feature and will vest after a service period of three years.

All PSUs contain a performance criterion applied to the number of units that vest on a yearly basis. The number of units that vest will be determined by the Company's relative share price performance in comparison to a peer group of companies or upon achievement of certain Company strategic objectives. The PSU performance multiplier ranges from 0% to 150%.

The following table is a reconciliation of the movement in the number of PSUs outstanding for the six months ended June 30, 2024 and year ended December 31, 2023:

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14. Equity reserves and long-term incentive plan awards (continued)

The following table is a reconciliation of the movement in the PSU liability for the six months ended June 30, 2024 and year ended December 31, 2023:

(d) Deferred share units

DSUs granted vest over a period of one year and will be paid to directors upon their retirement from the Board of Directors of the Company or upon a change of control.

The following table is a reconciliation of the movement in the number of DSUs outstanding for the six months ended June 30, 2024 and year ended December 31, 2023:

The following table is a reconciliation of the movement in the DSU liability for the six months ended June 30, 2024 and year ended December 31, 2023:

The financial liability associated with cash-settled DSU awards is recorded in accounts payable and accrued liabilities.  Subsequent to quarter-end, $1.5 million of DSUs were paid to a former director of the Company.

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14. Equity reserves and long-term incentive plan awards (continued)

(e) Phantom share units

On November 6, 2020, the Company granted 1,000,000 cash-settled phantom share units to the Chair of the Board.  The units vested three years from the grant date, but will only become payable upon the Chair's departure from the Board or upon a change of control of the Company, in a cash settlement amount equal to the fair value of 1,000,000 common shares as at the Chair's departure date or date of change of control.

The phantom share units represent a financial liability, as they will be settled in cash, and are marked-to-market at each reporting period end and presented in the Statement of Financial Position within accounts payable and accrued liabilities.

The following table is a reconciliation of the movement in the phantom share unit liability for the six months ended June 30, 2024 and year ended December 31, 2023:

15. Non-controlling interest ("NCI")

The AGM is wholly-owned by AGGL with the Government of Ghana retaining a 10% free-carried interest. The Government has a nominee on the board of this subsidiary and is entitled to 10% of declared dividends paid out of the subsidiary; however, the Government does not have to contribute to the subsidiary's capital investment. The Government of Ghana's free-carried interest is considered to be an NCI. As of June 30, 2024, AGGL did not have an income surplus in the pool from which dividends may be paid and as such no non-controlling interest was recognized for the six months ended June 30, 2024.

16. Revenue

AGGL has an offtake agreement (the "Offtake Agreement") with a special purpose vehicle of RK Mine Finance Master Fund I Limited ("Red Kite") under which the AGM will sell 100% of future gold production from the AGM up to a maximum of 2.2 million ounces. The realized gold sale price will be a spot price selected by Red Kite during a nine‐day quotational period following shipment of gold from the mine.

During the three and six months ended June 30, 2024, the AGM sold 27,830 and 59,670 ounces of gold, respectively, to Red Kite under the Offtake Agreement. For the period from March 4, 2024 to June 30, 2024, being the period the Company controlled the AGM and consolidated its financial results, the AGM sold 42,743 ounces of gold. As of June 30, 2024, the AGM has delivered 1,660,938 gold ounces to Red Kite under the Offtake Agreement.

The Company has recognized revenue from the sale of gold to Red Kite for the period from March 4, 2024 to June 30, 2024, which amounted to $95.5 million. Included in revenue of the Company is $0.2 million relating to by-product silver sales for both the three and six months ended June 30, 2024, respectively.

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16. Revenue (continued)

During the three and six months ended June 30, 2024, the AGM sold a portion of its production to the Bank of Ghana under the country's gold buying program. As agreed with Red Kite, gold ounces sold to the Bank of Ghana were considered delivered under the Offtake Agreement, and in consideration the AGM paid to Red Kite a "make whole" payment which was calculated in a similar manner to a nine‐day quotational period. The "make whole" payments made to Red Kite were recognized as a reduction of revenues.

17. Production costs

The following is a summary of production costs by nature recorded by the Company during the three and six months ended June 30, 2024.  Note that production costs of the AGM were consolidated by the Company from March 4, 2024 onwards.

For the three and six months ended June 30, 2024, change in inventories included the recognition of purchase price adjustments on gold-in-process and gold on hand inventories amounting to a credit of $1.4 million and an expense of $7.8 million, respectively.

18. Royalties

All of the AGM's concessions are subject to a 5% gross revenue royalty payable to the Government of Ghana. In addition, the Nkran deposit is subject to an additional 1% royalty on a portion of production as described in note 12(c) and the Esaase deposit is subject to an additional 0.5% net smelter return royalty payable to the Bonte Liquidation Committee.

On April 3, 2023, the Government of Ghana imposed a special levy, the Growth and Sustainability Levy ("GSL"), on all companies operating in Ghana with an effective date of May 1, 2023. The purpose of the GSL is to support growth and fiscal sustainability of the Ghanaian economy. For mining companies in Ghana, the GSL is levied at a rate of 1% of gold revenues for the fiscal years 2023 to 2025. The Company has presented the 1% GSL within royalties expense in the Statement of Operations and Comprehensive Income.

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19. General and administrative ("G&A") expenses

The following is a summary of G&A expenses incurred during the three and six months ended June 30, 2024 and 2023. G&A expenses include G&A expenses of the AGM from March 4, 2024 onwards.

20. JV service fee

For the period from January 1, 2024 to March 3, 2024, the Company was the manager and operator of the AGM JV.  For this period, the Company earned a gross service fee of $1.2 million less withholding taxes payable in Ghana of $0.2 million, for a net service fee of $1.0 million, which has been recognized in the Statement of Operations and Comprehensive Income for the six months ended June 30, 2024 (three and six months ended June 30, 2023 - a gross service fee of $1.7 million less withholding taxes of $0.3 million and a gross service fee of $3.5 million less withholding taxes of $0.7 million, respectively). The service fee earned from the JV was considered a related party transaction given the Company's previous 45% interest in the JV.

All transactions with related parties have occurred in the normal course of operations.

21. Finance income and expense

(a) Finance income

The following is a summary of finance income recorded by the Company during the three and six months ended June 30, 2024 and 2023.  Finance income earned by the AGM has been consolidated by the Company from March 4, 2024 onwards.

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21. Finance income and expense (continued)

(b) Finance expense

The following is a summary of finance expense recorded by the Company during the three and six months ended June 30, 2024 and 2023.  Finance expense incurred by the AGM has been consolidated by the Company from March 4, 2024 onwards.

22. Income per share

For the three and six months ended June 30, 2024 and 2023, the calculation of basic and diluted income per share is based on the following data:

For the three and six months ended June 30, 2024, excluded from the calculation of diluted weighted average shares were nil and 243,000 stock options, respectively, that were determined to be anti-dilutive (three and six months ended June 30, 2023 - 8,675,002 and 12,707,002 stock options were determined to be anti-dilutive, respectively).

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23. Commitments and contingencies

Commitments

The following table reflects the Company's contractual obligations as they fall due as at June 30, 2024 and December 31, 2023.  Note the December 31, 2023 balances exclude the liabilities and commitments of the AGM.

The ZCC gold hedges commitment represents the mark-to-market fair value of the AGM's current gold hedging program.  The settlement amount of these hedges, if any, will be dependent on the price of gold at the settlement date. The portion of the ZCC gold hedge liability that is expected to be settled in greater than one year from the balance sheet date has been presented within other non-current liabilities in the Statement of Financial Position.

Long-term incentive plan commitments in less than one year include all DSU awards to directors of the Company, as they are considered to be current as the timing of those payments is beyond the control of the Company in the event that a director where to retire or there is a change of control. As of June 30, 2024, the only DSU commitments following director resignations that are known to exist within one year are approximately $2.1 million of which, subsequent to quarter-end, $1.5 million of DSUs were paid to a former director of the Company.

The timing of the contingent payments to Gold Fields ($38.5 million) is based upon management's best estimate of when payments would be required to be made based upon the current Life of Mine plan.

Contingencies

Due to the nature of its business, the Company and its subsidiaries may be subject to regulatory investigations, claims, lawsuits and other proceedings in the ordinary course of its business. While the Company cannot reasonably predict the ultimate outcome of these actions, and inherent uncertainties exist in predicting such outcomes, the Company believes that the ultimate resolution of these actions is not reasonably likely to have a material adverse effect on the Company's financial condition or future results of operations.  Refer to note 10 for provisions recorded in respect of an outstanding legal claim.

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24. Supplemental cash flow information

The following table discloses non‐cash transactions impacting the Statements of Cash Flow for the periods presented:

The following table summarizes the changes in non-cash working capital for the three and six months ended June 30, 2024 and 2023:

25. Financial instruments

(a) Financial assets and liabilities by categories

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GALIANO GOLD INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the three and six months ended June 30, 2024 and 2023

(Expressed in United States dollars)

TABLE OF CONTENTS

1. Second quarter 2024 highlights	3-4
2. Business overview	4-11
3. Guidance and outlook	12
4. Results of the Asanko Gold Mine	13-21
5. Results of the Company	22-24
6. Selected quarterly financial data	25
7. Liquidity and capital resources	26-29
8. Non-IFRS measures	29-34
9. Summary of outstanding share data	35
10. Related party transactions	35
11. Critical accounting policies and estimates	35-36
12. Risks and uncertainties	36-37
13. Internal control	37
14. Qualified Persons	38
15. Cautionary statements	38-41

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This Management's Discussion and Analysis ("MD&A") of Galiano Gold Inc. ("Galiano" or the "Company") has been prepared by management as of August 8, 2024 and should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements and the notes thereto for the three and six months ended June 30, 2024 and 2023, the audited consolidated annual financial statements and the notes thereto for the year ended December 31, 2023 and the related MD&A. The unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting of the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board.

Galiano was incorporated on September 23, 1999, under the Business Corporations Act of British Columbia, Canada.

Additional information on the Company, including its most recent Annual Information Form ("AIF"), is available under the Company's SEDAR+ profile at www.sedarplus.ca and the Company's website: www.galianogold.com.

All dollar amounts herein are expressed in United States dollars ("US dollars") unless otherwise stated. References to $ means US dollars and C$ are to Canadian dollars.

This MD&A contains forward-looking statements and should be read in conjunction with the risk factors described in sections "12. Risks and uncertainties" and "15. Cautionary statements" at the end of this MD&A.

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1. Second quarter ("Q2") 2024 highlights

1.1 Key Metrics of the Asanko Gold Mine ("AGM")

The Company completed the acquisition of Gold Fields Limited's ("Gold Fields") 45% interest in the AGM joint venture (the "Acquisition") on March 4, 2024 and as of that date, the operational and financial results of the AGM have been consolidated into the Company's results. To enable a comprehensive understanding of the operational performance at the mine asset level, year-to-date highlights for the AGM below are presented on a 100% basis for the entire six months ended June 30, 2024.

• Safety: There were no lost-time injuries ("LTI"), nor total recordable injuries ("TRI"), recorded during the second quarter. The 12‐month rolling LTI and TRI frequency rates as of June 30, 2024 were 0.15 and 0.60 per million employee hours worked, respectively.
• Reserve growth at Abore: Following successful 2023 and early 2024 infill drilling programs at Abore, a significant increase to the Abore Mineral Reserve estimate was completed effective June 30, 2024, which will provide mine life extension at the AGM. The Abore Probable Mineral Reserve estimate increased by 151,000 ounces (45%) to 485,000 ounces compared to the 2023 Technical Report (as defined herein).
• Production performance: Gold production of 26,437 ounces during the second quarter and 56,823 ounces year-to-date. Gold production during the quarter was impacted by challenging ground conditions in the upper portion of the Abore pit and heavy seasonal rainfall in Ghana, which impacted fresh ore delivery to the mill such that a greater proportion of lower grade stockpiles were processed than originally planned. Lower throughput resulting from harder material processed also affected production levels.
• Milling performance: Achieved mill throughput of 1.3 Mt of ore at a grade of 0.7 g/t during the second quarter, with metallurgical recovery averaging 82%. Mill throughput during the quarter was 9% lower than the first quarter of 2024 due to processing harder ore both mined from Abore and stockpiled material that was previously mined from Nkran. Engineering and early earthworks for the installation of a permanent secondary crusher continued during the quarter and is expected to be completed in the first half of 2025. This circuit upgrade will maintain plant throughout at 5.8 Mtpa when treating harder ore.
• Cost performance: Total cash costs¹ of $1,271 per gold ounce ("/oz") and all-in sustaining costs¹ ("AISC") of $1,759/oz for the three months ended June 30, 2024.  Year-to-date AISC¹ of $1,777/oz.
• Revised 2024 guidance: Due to the slower than expected ramp-up in mining, coupled with temporary lower mill throughput, the Company is revising full year production guidance from between 140,000 to 160,000 ounces to between 120,000 and 130,000 ounces. Operating costs are estimated to be in line with previous expectations, however AISC¹ guidance per gold ounce sold for 2024 is being revised from between $1,600/oz to $1,750/oz to between $1,975/oz and $2,075/oz. This increase is due to lower expected gold production coupled with investments in additional stripping at Abore.
• Cash flow generation: Generated positive cash flow from operations of $9.2 million, with Free Cash Flow¹ negative at $4.5 million during the second quarter due to investments in waste stripping at the Abore deposit.
• Financial performance: Gold revenue of $63.8 million generated from 27,830 gold ounces sold at an average realized price of $2,292/oz during the second quarter. Net income of $13.9 million and Adjusted EBITDA¹ of $19.3 million during the second quarter.

1.2 Highlights of the Company

• Robust liquidity: The Company ended the quarter with $123.0 million in cash and cash equivalents and no debt.
• Earnings: Net income of $8.8 million or $0.03 per common share during the second quarter, which included the consolidation of the AGM's financial results for the three months ended June 30, 2024. Adjusted net income¹ for the second quarter was $7.3 million or $0.03 per common share.
• Senior management appointment: Appointed Michael Cardinaels as Executive Vice President and Chief Operating Officer ("COO"), effective September 3, 2024. Mr. Cardinaels brings over two decades of mining experience across various commodities, most recently with Perseus Mining Ltd. The appointment of Mr. Cardinaels is part of the Company's commitment to operational improvements and its overarching strategy to drive growth at the AGM.

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2. Business overview

Following the closing of the Acquisition on March 4, 2024, Galiano owns a 90% equity interest in the entity that holds the AGM mining licenses and gold exploration tenements located on the Asankrangwa Gold Belt in the Republic of Ghana ("Ghana"), West Africa. The AGM consists of four main open-pit deposits: Abore, Nkran, Esaase and Miradani North, multiple satellite deposits and a carbon-in-leach ("CIL") processing plant, with a current capacity of 5.8 Mt per annum.

In addition to its interest in the AGM, the Company owns various exploration licenses across the highly prospective and underexplored Asankrangwa Gold Belt.

Galiano is focused on creating a sustainable business capable of value creation for all stakeholders through production, exploration, accretive business acquisitions and disciplined deployment of its financial resources. The Company's shares are listed on the Toronto Stock Exchange and the NYSE American under the symbol "GAU".

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2.1 Key business developments in 2024

a) Acquisition of Gold Fields' 45% interest in the AGM

The Company completed the Acquisition of Gold Fields' 45% interest in the AGM joint venture ("JV"), increasing Galiano's equity interest in the AGM to 90% on March 4, 2024.

Under the terms of the agreement, total consideration payable to Gold Fields comprised the following:

• $65.0 million cash payment, equivalent to Gold Fields' effective interest in the cash balance at the JV;
• the issuance of 28.5 million common shares of the Company, resulting in Gold Fields owning approximately 19.9% of the Company's issued and outstanding common shares;
• $55.0 million of deferred consideration comprised of a:
  • $25.0 million cash payment on or before December 31, 2025; and
  • $30.0 million cash payment on or before December 31, 2026 (collectively "Deferred Consideration").

The Deferred Consideration is to be paid in cash subject to the Company's right to satisfy up to 20% of each payment with common shares, subject to Gold Fields not owning more than 19.9% of the Company's issued and outstanding common shares at that time; and

• $30.0 million cash payment contingent upon production of 100,000 gold ounces from the Nkran deposit.

Gold Fields will also receive a 1% net smelter return royalty (the "Nkran Royalty") on production from the Nkran deposit beginning upon 100,000 gold ounces being produced, and subject to a maximum of 447,000 gold ounces of production. Galiano has a right of first refusal on any full or partial disposition of the Nkran Royalty by Gold Fields.

Galiano also entered into an amended investor rights agreement with Gold Fields, which includes a 12-month standstill period and other customary rights, including a pre-emptive right for Gold Fields to maintain its ownership interest as at closing of the Acquisition.

b) Increase to Abore Mineral Reserves and Resources

Following successful 2023 and early 2024 infill drilling programs at Abore, a significant increase to the Abore Mineral Resource estimate ("MRE") was completed effective March 31, 2024. This new estimate included assay results from an additional 119 exploration drill holes, totaling 27,039m, completed since the December 31, 2022 MRE, as described in the report titled "NI 43-101 Technical Report and Feasibility Study for the Asanko Gold Mine, Ashanti Region, Ghana" with an effective date of December 31, 2022 (the "2023 Technical Report"). The net impact of the additional drilling exceeded conversion of the Inferred Mineral Resources to Indicated Mineral Resources. The Abore Measured and Indicated Mineral Resources increased by 181,000 ounces (38%), as a result of improved grade (13%) and tonnage (22%) from 1.16 g/t to 1.31 g/t, and from 12.8 Mt to 15.6 Mt, respectively. Both estimates were based on an $1,800/oz gold price and an equivalent cut-off grade of 0.45 g/t gold.

Pursuant to the significant increase to Mineral Resources at Abore, the Probable Mineral Reserves have increased by 151,000 ounces (45%) to 485,000 ounces, effective June 30, 2024, when compared to the 2023 Technical Report. This increase in Mineral Reserves will extend mining activities at Abore through mid-2026.

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Mineral Reserve Estimate as of June 30, 2024

	Proven			Probable			Proven + Probable
	Tonnes	Au Grade	Au Content	Tonnes	Au Grade	Au Content	Tonnes	Au Grade	Au Content
Deposit	(Mt)	(g/t)	(koz)	(Mt)	(g/t)	(koz)	(Mt)	(g/t)	(koz)
Nkran	-	-	-	9.9	1.82	582	9.9	1.82	582
Esaase	-	-	-	13.6	1.22	533	13.6	1.22	533
Miradani North	-	-	-	6.8	1.41	310	6.8	1.41	310
Abore	-	-	-	11.8	1.28	485	11.8	1.28	485
Dynamite Hill	-	-	-	1.1	1.31	45	1.1	1.31	45
Adubiaso	-	-	-	2.2	1.58	110	2.2	1.58	110
Stockpiles	1.6	0.70	36	-	-	-	1.6	0.70	36
Total	1.6	0.70	36	45.4	1.41	2,065	47.0	1.39	2,101

Notes:

• Mineral Reserves for Stockpiles and the Abore deposit are reported assuming a gold price of US$1,650/oz, the Mineral Reserves for all other deposits are reported assuming a gold price of US$1,500/oz.
• Mineral Reserves are defined within six different pit designs guided by pit shells derived from the optimization software, GEOVIA Whittle™ and Datamine Studio NPVS™.
• Cut-off grades vary based on the deposit. Nkran is close to the mill and contains only fresh ore. The Mineral Reserves are reported at 0.40 g/t Au cut-off for the fresh ore in Nkran. For Esaase, Mineral Reserves are reported at cut-offs of 0.55 g/t Au for the oxide ore and 0.70 g/t Au for the remaining ore types. For all other open pits, the Mineral Reserves are reported at 0.5 g/t Au cut-off for all ore types.
• Mining costs vary based on the pit, the rock type, and the depth of the pit. The base mining costs for Nkran, Esaase, Miradani North, Abore, Dynamite Hill and Adubiaso are $2.44/t, $1.98/t, $1.94/t, $2.00/t, $2.29/t and $2.06/t, respectively. There are additional expenditures for fixed contractor monthly fees, grade control, community fees, owner's mining overhead costs, and other small costs that vary with each deposit and are in addition to the $/t stated.
• Processing cost for Abore ore is $11.09/t, for all other deposits and stockpiles it is $8.81/t for oxide ore, $10.39/t for transition ore and $10.66/t for fresh ore.
• General and administration cost is $5.27/t for Abore, $6.69/t for Esaase and $6.19/t for all other pits.
• Ore transportation cost varies for each pit based on the haul distance. It ranges between $0.61/t for Nkran and $6.15/t for Esaase.
• Processing recovery is 94.0% for all ore types in all pits except for Esaase and Abore. Processing recovery for Abore and Stockpiles ore is calculated using a fixed tail of 0.10 g/t but capped to a maximum of 94%. Processing recovery varies based on the ore type and head grade in Esaase, where the average recovery for oxide, upper sandstone, cobra and central sandstone ore types are 90.1%, 73.8%, 71.3% and 76.4%, respectively.
• Mining dilution varies between pits. The average mining dilution is calculated to be 11.9%, 14.4%, 6.0%, 6.9%, 11.6% and 15.3%, for Nkran, Esaase, Miradani North, Abore, Dynamite Hill and Adubiaso, respectively.
• A 2% ore loss has been applied to the total reserve in each pit except for Abore, which has a 6.8% ore loss.
• Figures are rounded to the appropriate level of precision for the reporting of Mineral Reserves. Due to rounding, some columns or rows may not compute as shown.
• The overall strip ratio (the amount of waste mined for each tonne of ore) for AGM is 7.65 (W:O). The strip ratio for Nkran, Esaase, Miradani North, Abore, Dynamite Hill and Adubiaso is 13.5, 4.5, 5.6, 7.2, 9.8 and 8.2, respectively.
• The Mineral Reserve is stated as diluted dry metric tonnes.
• The Abore and Stockpiles Mineral Reserves are stated as of June 30, 2024 and all other deposits are stated with an effective date of December 31, 2022 and remain current.
• Mr. Richard Miller, P.Eng., Vice President Technical Services for Galiano, is the Qualified Person responsible for the Abore and Stockpiles Mineral Reserves. Dr. Anoush Ebrahimi, P.Eng., Principal Consultant (Mining) SRK (Canada) Inc., is the Qualified Person responsible for all other stated Mineral Reserves.

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• The Qualified Persons, Mr. Richard Miller and Dr. Anoush Ebrahimi, do not know of any legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Reserves. Mr. Miller and Dr. Ebrahimi believe the risks regarding permitting and socio-economic factors to be low.
• The increase to the Abore Mineral Reserve estimate is not considered a material change to Galiano.

These results, in addition to infill and step out drilling results at other deposits, will be used to update a consolidated AGM Mineral Reserve estimate and an optimized life of mine plan in the fourth quarter of 2024.

c) Abore pit development

On October 1, 2023, mining at the Abore deposit commenced, and since that time, mining operations have focused on waste stripping.  During the second quarter, Ghana experienced higher than normal rainfall levels which resulted in regular flooding of the Abore pit floor and together with challenging ground conditions have resulted in lower than expected mining rates and impacted fresh ore delivery to the mill such that a greater proportion of lower grade stockpiles were processed than originally planned. During the second quarter, mining rates averaged approximately 87,000t per day. However, in line with the planned mobilization schedule, additional mining equipment has been mobilized to the AGM by the mining contractor and ground conditions have also improved, which along with drier weather conditions has resulted in a progressive increase to mining rates of 111,000t per day in July 2024. The lower mining rates experienced in the second quarter are expected to be temporary, however they did adversely impact ore production from the Abore pit during the second quarter.

The aforementioned increase to Abore’s Mineral Reserve estimate will extend the AGM’s mine life due to the significantly higher amount of ore tonnes to be mined from Abore. However, the resultant larger Abore pit design will require additional waste stripping before higher grade ore can be mined. Anticipating this increased pit size, the Company mined at higher than planned strip ratios in the second quarter. Additionally, lower grade ore is located in the higher elevations of the larger pit, which, along with the other factors noted above, has resulted in the downward revision to production guidance for 2024. The larger pit however generates more value over the life of mine, and by virtue that the volume of ore can fill the processing plant for an extended period, reduces the necessity to supplement mill feed with additional new deposits and hence reduces the establishment capital, operational complexity and risk of the operation.

d) Nkran mining contract

During the quarter, the Company issued a request for proposal ("RFP") for the tender of the Nkran Cut 3 mining services contract. The Company undertook a competitive process seeking bids from multiple reputable mining contractors in Ghana. Management is currently evaluating the RFPs received, following which an investment recommendation will be made to the Company's Board for approval. An investment decision on Nkran Cut 3 is expected in the second half of 2024.

e) Changes to the Board of Directors and Senior Management

Dr. Michael Price retired from the Board of Directors effective June 13, 2024. The Company would like to express its gratitude to Dr. Price for his many years of leadership and service to the Company and its shareholders. In place of Dr. Price, Mr. Navin Dyal and Dr. Moira Smith were appointed to the Board at the Company's Annual General Meeting held on June 13, 2024.

Mr. Navin Dyal is currently the Chief Financial Officer of Dundee Precious Metals Inc., and has over 20 years of finance and public company experience. Mr. Dyal is an accomplished senior executive with a track record of success in financial and strategic leadership, capital funding and mergers and acquisitions. Prior to Dundee Precious Metals, Mr. Dyal was the Senior Vice President and Chief Financial Officer at Teranga Gold Corporation for nine years prior to its acquisition by Endeavour Mining Corporation. He spent seven years with Barrick Gold Corporation in progressively senior finance positions and was an auditor with PricewaterhouseCoopers earlier in his career. Mr. Dyal is a Chartered Professional Accountant, Chartered Accountant and holds a Bachelor of Commerce from the University of Toronto.

Dr. Moira Smith, P. Geo., has over 30 years of expansive industry experience. Dr. Smith has held key positions from Vice President, Exploration and Geoscience with Liberty Gold, Chief Geologist, Nevada for Fronteer Gold and Senior Geologist and U.S. Exploration Manager with Teck. She has held board or executive positions with many industry associations and is a past President of the Society of Economic Geologists and recent winner of the Colin Spence award from the Association for Mineral Exploration of B.C. Dr. Smith received her Ph.D., Geology, from the University of Arizona and is a member in good standing with numerous professional organizations. Dr. Smith is also a director of Discovery Metals Corp.

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Galiano has appointed Michael Cardinaels as Executive Vice President and Chief Operating Officer ("COO"), effective September 3, 2024. The appointment of Mr. Cardinaels as the new Executive Vice President and COO is part of the Company's commitment to operational improvements and its overarching strategy to drive growth at the AGM. Mr. Cardinaels brings over two decades of mining sector experience across various commodities, having held progressively senior operational roles throughout his career. Most recently, Mr. Cardinaels has been the General Manager of the Yaoure mine, after a successful five years at the Sissingue Mine, both with Perseus Mining Ltd. Mr. Cardinaels holds a Bachelor of Engineering (Mining) from the University of Queensland.

Additionally, in the second quarter, Todd Romaine, Executive Vice President, Sustainability, and  Markus Felderer, Senior Vice President, Corporate Development left the Company. Following these departures, Krista Muhr was promoted to a newly defined role of Senior Vice President, External Affairs and Sustainability, which incorporates leadership of Sustainability into her existing role as head of Investor Relations, and Sean Gregersen was promoted to Vice President, Corporate Development. Sean is a mining engineer with more than 15 years' experience in the mining industry, with previous roles including Manager of Business Development at Eldorado Gold where he collaborated in the rapid growth of the mid-tier company through acquisition and development.

2.3 Financial and operating highlights

Below are the Company's highlights for the three and six months ended June 30, 2024 and 2023, including the operating results, cash flows and net assets of the AGM from March 4, 2024 onwards.

		Three months ended June 30,						Six months ended June 30,
(All amounts in 000's of US dollars, unless otherwise stated)		2024			2023			2024			2023
Galiano Gold Inc.
Revenue		63,963			-			95,658			-
Income from mine operations		25,132			-			29,778			-
Net income		8,831			11,961			4,072			20,454
Adjusted net income1		7,264			11,961			13,757			20,454
Adjusted EBITDA1		17,598			9,634			21,105			16,374
Cash and ca sh equivalents		123,039			55,503			123,039			55,503
Cash generated from (used in) operating a ctivities		4,463			(1,377	)		17,491			(1,920	)

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The Company has also presented the following highlights for the AGM, which are on a 100% basis, for the three and six months ended June 30, 2024 and 2023, to enable a clear comparison to the financial and operating performance of the mine with the corresponding period in the prior quarter.

	Three months ended June 30,		Six months ended June 30,
(All amounts in 000's of US dollars, unless otherwise stated)	2024	2023	2024	2023
Asanko Gold Mine (100% basis)
Financial results
Revenue	63,963	64,066	129,565	129,259
Income from mine operations	23,071	24,406	46,567	49,063
Net income	13,945	24,378	28,402	44,992
Adjusted EBITDA1	19,279	25,541	40,792	48,404
Cash generated from operating activities	9,231	17,979	35,336	36,922
Free cash flow1	(4,509)	10,113	1,304	22,072
AISC margin ($ per gold ounce sold)1	533	570	389	577
Operating results
Gold produced (ounces)	26,437	33,673	56,823	66,351
Gold sold (ounces)	27,830	32,912	59,670	68,086
Average realized gold price ($/oz)	2,292	1,944	2,166	1,896
Total cash costs ($ per gold ounce sold)1	1,271	1,127	1,222	1,104
AISC ($ per gold ounce sold)1	1,759	1,374	1,777	1,319

2.4 Environmental, Social and Corporate Governance ("ESG")

Sustainability is at the core of the Company's business strategy. The Company believes that a comprehensive sustainability strategy is integral to meeting its strategic objectives in positively supporting relationships with its internal and external stakeholders, improve its risk management, reduce the AGM's cost of production and both directly and indirectly benefit the catchment communities that the Company operates in, beyond the life of the mine.

The Company implements its sustainability program with a focus on four key areas: (1) protecting human rights; (2) maintaining the occupational health and safety of employees and the local catchment communities; (3) advancing the socio-economic welfare and health of local catchment communities; and (4) managing environmental impacts of operations and exploration activities. For further details on the Company's sustainability program, refer to the Company's 2023 Sustainability Report (the "2023 Sustainability Report") published on July 9, 2024, which is available on the Company's website at www.galianogold.com. The disclosures and metrics of the 2023 Sustainability Report align with international reporting standards including the Global Reporting Initiative and the Metals and Mining Standards of the Sustainability Accounting Standards Board.

In May 2023, the Canadian Parliament passed Bill S-211, an act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff. This requires Canadian companies to annually report on the due diligence steps they are taking to both identify and address labour risks in their supply chain. The Company submitted its report, and completed the mandatory online questionnaire to the Minister of Public Safety and Emergency Preparedness in advance of the May 31, 2024 deadline.

In June 2023, the International Sustainability Standards Board ("ISSB") released its inaugural IFRS Sustainability Disclosure Standards, specifically IFRS S1 "General Requirements for Disclosure of Sustainability-related Financial Information" and IFRS S2 "Climate-related Disclosures", the purpose of which is to standardize a single, global baseline of sustainability disclosures for capital markets. IFRS S1 provides a set of disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium and long term. IFRS S2 sets out specific climate-related disclosures and is designed to be used in conjunction with IFRS S1. Both standards fully incorporate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). IFRS S1 and IFRS S2 are effective for annual reporting periods beginning on or after January 1, 2024, with early adoption permitted.

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Although the ISSB has issued IFRS S1 and IFRS S2, the standards are not currently mandated in Canada. The Canadian Securities Administrators are responsible for Canadian reporting issuer disclosure requirements. The Canadian Sustainability Standards Board ("CSSB") was formed to review the final ISSB standards and consider their suitability for adoption in Canada. In March 2024, the CSSB released proposals on its first two Canadian Sustainability Disclosure Standards ("CSDS") - Exposure Draft CSDS 1, General Requirements for Disclosure of Sustainability-related Financial Information, and Exposure Draft CSDS 2, Climate-related Disclosures. Exposure Drafts CSDS 1 and 2 are aligned with the global baseline disclosure standards IFRS S1 and IFRS S2, with the exception of a Canadian-specific effective date and transition relief to assist Canadian organizations with implementation. The CSSB has proposed an effective date for annual reporting periods beginning on or after January 1, 2025. However, Canada's regulators and legislators will determine whether CSDSs should be mandated, which organizations will need to apply the standards and over what time frame. The Canadian Securities Administrators have issued a statement noting that they will seek consultation on a revised climate-related disclosure rule following the finalization of CSDS 1 and 2.

The Company is currently evaluating how the CSDSs will impact its future disclosure obligations.

On March 6, 2024, the Securities and Exchange Commission ("SEC") issued a final rule that requires registrants to provide climate-related disclosures in their annual reports and registration statements. However, SEC reporting issuers filing on Form 40-F, like Galiano, are exempt from the SEC's ESG disclosure rule. On April 4, 2024, the SEC announced that it would pause the implementation of its climate-related disclosures pending a court review of the new rules following a series of legal challenges by several states and business groups.

2.5 Macroeconomic factors

Gold Price

The price of gold is the largest single factor in determining the Company's profitability and cash flow from operations. Therefore, the financial performance of the Company is expected to be closely linked to the price of gold. Historically, the price of gold has been subject to volatile price movements over short periods of time and is affected by numerous macroeconomic factors that are beyond the Company's control. The price of gold may be impacted from time to time by currency exchange rate fluctuations and the relative strength of the U.S. dollar, the supply of and demand for gold, and macroeconomic factors such as the level of interest rates and inflation expectations. During Q2 2024, the price of gold fluctuated between a low of $2,265/oz in April and a high of $2,427/oz in May, with the average price for the second quarter of 2024 based on the London Bullion Market Association ("LBMA") PM benchmark of $2,338/oz, compared to the Q2 2023 average price of $1,975/oz. Gold prices during Q2 2024 were influenced by geopolitical risks, and volatility in interest rates and the U.S. dollar, among others.

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For the three months ended June 30, 2024, the AGM realized an average gold price of $2,292/oz under the Offtake Agreement (as defined herein) compared to the average LMBA PM benchmark of $2,338/oz. The LMBA PM spot gold price as of August 7, 2024 was approximately $2,400/oz.

Management continues to implement and evaluate opportunities to hedge its gold price risk, particularly in light of periods where forecast capital expenditures are estimated to be elevated relative to the life of mine average.

Ghana Economy

In October 2023, the International Monetary Fund ("IMF") and the Ghana government reached a staff-level agreement on the first review of its $3 billion financing arrangement over a 3-year period (the "IMF Loan"). The first tranche of the IMF loan totaling $600 million was paid in May 2023 and a second tranche of $600 million was approved in January 2024 following a debt restructuring plan between Ghana and its creditors. In June 2024, the IMF board approved a third tranche totaling $360 million, bringing total disbursements under the three-year debt programme to $1.56 billion.

The fiscal climate in Ghana over recent years has not materially impacted the operations of the AGM, as much of the cost structure is tied to the US dollar, and the government remains supportive of the mining industry given its importance to maintaining foreign currency reserves.

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3. Guidance and outlook

3.1 2024 guidance for the AGM

Gold production during the second quarter was impacted by challenging ground conditions in the upper portion of the Abore pit and heavy seasonal rainfall in Ghana, which impacted fresh ore delivery to the mill such that a greater proportion of lower grade stockpiles were processed than originally planned. Lower throughput resulting from harder material processed also affected production levels. As a result, 2024 production guidance is being revised from between 140,000 to 160,000 ounces to between 120,000 to 130,000 ounces.

As a result of the lower gold production guidance, AISC¹ guidance for 2024 is being revised from between $1,600/oz to $1,750/oz to between $1,975/oz and $2,075/oz. Operating costs are estimated to be in line with previous expectations, however AISC¹ guidance has increased due to lower expected gold production coupled with investments in additional stripping at Abore. AISC¹ are anticipated to be elevated in 2024 relative to the life of mine average primarily due to waste stripping to access consistent ore feed at Abore, which will benefit future years production.

Sustaining capital expenditure guidance for 2024 remains at approximately $10.0 million (excluding capitalized waste stripping at Abore).

Development capital expenditure for 2024 also remains unchanged at approximately $20.0 million and primarily relates to processing plant upgrades (additional CIL tanks, a secondary crusher and associated circuit upgrades) and site establishment costs.

The exploration expenditure in 2024 is also expected to be in line with previous years at $15.0 million. The spend is planned to be equally split between generative and near-mine exploration targets.

		Original guidance	Revised guidance	Actuals YTD	Actuals
	Unit	2024	2024	2024	2023
Gold production	oz	140,000 - 160,000	120,000 - 130,000	56,823	134,077
AISC1	$/oz	1,600 - 1,750	1,975 - 2,075	1,777	1,522
Sustaining capital (excluding waste stripping)	$000s	10,000	10,000	3,152	30,963
Development capital	$000s	20,000	20,000	5,595	6,703
Exploration	$000s	15,000	15,000	7,877	14,139

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¹  See “8. Non-IFRS measures”

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4. Results of the AGM

All results of the AGM in this section are presented on a 100% basis for the three and six months ended June 30, 2024 and 2023. For the period from January 1, 2024 to March 3, 2024, the Company's attributable equity interest in the AGM was 45% and was 90% for the remainder of the year.

4.1 Operating performance

The following table and subsequent discussion provide a summary of the operating performance of the AGM (on a 100% basis) for the three and six months ended June 30, 2024 and 2023. 

		Three months ended June 30,						Six months ended June 30,
Key mine performance data of the AGM (100% basis)		2024			2023			2024			2023
Mining
Ore tonnes mined (000 t)		467			-			732			-
Waste tonnes mined (000 t)		7,427			-			12,304			-
Total tonnes mined (000 t)		7,894			-			13,036			-
Strip ratio (waste:ore)		15.9			-			16.8			-
Average gold grade mined (g/t)		1.0			-			0.9			-
Mining cost ($/t mined)		2.98			-			3.10			-
Ore transportation
Ore tonnes trucked (000 t)		503			729			1,069			2,096
Ore transportation cost ($/t trucked)		5.71			5.88			6.28			5.64
Processing
Tonnes milled (000 t)		1,336			1,457			2,803			3,023
Average mill head grade (g/t)		0.7			0.8			0.8			0.9
Average recovery rate (%)		82%			85%			82%			79%
Processing cost ($/t milled)		11.18			11.01			10.85			10.37
G&A costs ($/t milled)		5.13			4.68			4.93			4.38
Gold produced (ounces)		26,437			33,673			56,823			66,351
Gold sold (ounces )		27,830			32,912			59,670			68,086
Costs