Golconda Gold Announces Gold Streaming Transaction for Its Galaxy Project

TORONTO, Nov. 23, 2023 (GLOBE NEWSWIRE) -- Golconda Gold Ltd. (“Golconda Gold” or the “Company”) (TSXV: GG; OTCQB: GGGOF) today announces that it has entered into a US$5 million stream transaction relating to its Galaxy project in South Africa with Empress Royalty Holding Corp. (“Empress”), a wholly-owned subsidiary of Empress Royalty Corp. (“Empress Royalty”) (TSXV: EMPR | OTCQX:EMPYF).

Golconda Gold, its subsidiary Galaxy Gold Reefs (Pty) Ltd., and certain of its affiliates, have entered into a metal purchase and sale agreement dated November 21, 2023 (the “Agreement”) with Empress for payable gold production from the Galaxy mine in South Africa. Pursuant to the terms of the Agreement, Empress will make an up-front cash payment totalling US$5 million (the “Investment”) for payable gold produced from the Galaxy mine. The Investment is based on 3.5% of the payable gold production from the Galaxy mine for an initial 8,000 payable ounces; thereafter, the percentage will reduce to 2.0% of the payable gold production until the earlier of: (i) 20,000 ounces having been paid to Empress; or (ii) 20 years after the first payment was made. The purchase price for the payable gold delivered pursuant to the Agreement is 20% of the gold spot price. The closing of the transaction and the funding of the Investment is subject to typical conditions precedent.

“We are excited to partner with Empress who, through their due diligence, have understood the true potential of Galaxy. With the proceeds generated from the Investment, we will be fully funded to implement and execute our Phase 1 and 2 expansion plans at the Galaxy mine.

We have faced challenges at Galaxy over the last few years including the effects of COVID-19 in slowing our expansion plans, flooding both at the mine and at our concentrate warehouse in Durban, and production challenges due to a lack of investment in the mining fleet required to meet our production targets. We currently have over 35,000 tonnes per month (“tpm”) of spare capacity in the processing plant. Therefore, the Investment will primarily be used to acquire new underground equipment and cover the working capital costs of underground development to increase underground production and fill the processing plant,” said Nick Brodie, Chief Executive Officer of the Company.⁽¹⁾