Galane gold company presentation

Company Presentation June 2012

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Forward Looking Statements

Certain information set forth in this presentation contains “forward-looking statements” and “forward-looking information” under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management’s assessment of Galane Gold‘s future plans and operations and are based on Galane Gold‘s current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Forward-looking statements are provided to allow potential investors the opportunity to consider management’s beliefs and opinions in respect of the future so that they may use such beliefs and opinions as one factor in evaluating an investment in Galane Gold. Some of the forward-looking statements may be identified by words such as “may”, “will”, “estimates”, “intends”, “expects”, “anticipates”, “believes”, “potential”, “projects”, “plans”, and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. In addition, the projections contained herein are based on the assumptions set out in Appendix A. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Galane Gold‘s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: liabilities inherent in mining; technical problems; Galane Gold‘s inability to obtain permits and regulatory approvals required in connection with operations; dependence on third party transportation systems; competition for, among other things, capital, land, inputs and skilled personnel; incorrect assessments of the value of acquisitions; changes in commodity prices and regulations related to mining; the effects of competition and pricing pressures in the market; the oversupply of, or lack of demand for, mineral products; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of mining products, including labor stoppages and severe weather conditions; the demand for and availability of rail, port and other transportation services; and management’s ability to anticipate and manage the foregoing factors and risks. Galane Gold undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Such forward looking statements and forward-looking information in this presentation speak only as of the date of this presentation.

Galane Gold Ltd. Company Presentation

Summary • Owner (100%) of the Mupane gold mine in Botswana, in

production since 2005 • Annual gold production of approximately 57,000 oz • No hedges, no NSRs • Control all prospective ground for gold on the Tati Greenstone

belt in Botswana • Low-risk opportunity for resource expansion from existing

properties through: – Large portfolio of drill-ready targets obtained via soil

sampling and previous drilling – Drilling previously mined open pits where gold

mineralisation is known to be open at depth

Company History • Acquired Mupane Gold Mining (Pty) Ltd. from IAMGOLD Corp.

(effective date: July 1, 2011) • Acquired Northern Lights Exploration (compl. 10 April 2012)

Investment Case • Low Geological Risk – Region has been producing gold for >

1,000 years, large portfolio of low-risk targets • Low Operating Risk – Mupane operation has been mining

and processing since 2005 • Low Financing Risk – Galane Gold can fund its expansion

through internally generated cash-flows

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Galane Gold Summary

Mupane Gold Mine Mill


Trading Symbol GG:TSX-V

Shares O/S 48,233,000

Shares O/S fully-diluted 78,161,233

Recent Price (Apr 24, 2012) C$0.85

Market Cap C$40,998,050

Working Capital (at Mar 31, 2012) US$27,331,442

Enterprise Value ~C$18,700,000

Institutional Ownership 81.0%

Management & Board 11.8%

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Management Team • 25 years experience in mining industry, focus on gold and base metals • Former CEO of National Mining Company of Oman, Technical Expert &

Development Specialist for Freeport McMoran Copper & Gold Inc., Engineering Manager for Golden Shamrock (Ashanti Goldfields), Project Engineer and Manager, Engineering Services for Conzinc (Rio Tinto plc)

• B.Eng (Hons), MBA, Member of Australian Institute of Company Directors

• Australian

Lawrence Manjengwa General Manager

• 30 years experience as geologist focused on Archaen gold exploration and mining

• Previously with Phelps Dodge, Falconbridge and Gallery Gold where he led the team that discovered the Mupane Gold Deposit and saw it into production in 2004

• B.Sc. (Hons) Geology, Soils, Geography (University of Natal) • Botswana

Charles Byron Chief Geologist and Director

Philip Condon Chief Executive Officer and Director

• 15 years experience in open cut and underground mining of gold, base metals, platinum and ferrochrome across a diversified spectrum of countries and cultures

• Former Mining Director of Nordgold in Guinea, Mine Manager of National Mining Company in Oman, Production Manager of Anglo Base Metals’ Skorpionzinc Mine in Namibia, Senior Mining Engineer of Zimplats in Zimbabwe and Mine Manager of Maranatha Ferrochrome in Zimbabwe.

• B.Sc.(Hons)Eng, Member of AusIMM • Zimbabwean


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Board of Directors • Chairman of Feronia Inc., one of Africa’s oldest operating companies

and largest employers • Former CEO of Navina Asset Management a Toronto-based investment

firm • Director of several companies in the Agriculture, Mining, and Oil & Gas

sectors • Canadian

Amar Bhalla Independent Director

• More than 30 years experience in the mining industry • Currently a director of Kenmare Resources plc • Previous experience includes holding senior management positions at BHP,

Utah Mining Australia, Mineral Deposits Ltd and N L Industries Inc., as well as being a director of Ok Tedi Mining Ltd.

• Fellow of the Australian Institute of Mining and Metallurgy (FAusIMM) and a Fellow of the Australian Institute of CPAs (FCPA)

• BEc in Accounting and Law, MEc in Industry Economics • Australian

Ian Egan Independent Director

Ravi Sood Chairman (non-exec)

• President of Capital Investment Corp., an investment management firm focused on private equity and venture capital

• Previously served as CEO of Crescent Logic Inc., a Toronto-based software firm

• Chairman of Ursa Major Minerals, a TSX listed nickel producer and director of several TSX-V listed companies

• Canadian


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Botswana Overview

Map of Botswana

Operating in a stable and economically sound mining-friendly jurisdiction

• Ranked as best mining country in Africa1

− Ranked 7th best mining country globally − Political Stability and Legal Stability

• Strong GDP growth • AA credit rating • English speaking ¹ Source: Fraser Institute

• Mineral rich and historically underexplored − Largest diamond exporter in world − Gold producer − Nickel producer − Copper producer − Platinum producer − Potential uranium producer − One of world’s largest measured coal resources

Emerging Mining Powerhouse

Atlantic Ocean

Indian Ocean

Stable and Simple Legal System Strong Economic Environment

• Corporate Tax Rate as low as 22% • 5% Royalty on Gold Sales • IFRS Accounting System • English Law • Banking system adheres to international standards


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Galane Operations – The Mupane gold mine

Type • Conventional open-pit gold mine with mill and carbon-in-leach processing

Location • Northeastern Botswana in southern Africa • 30 km southeast of the town of Francistown (population of

around 100,000)

Ownership • 100% of the Mupane gold deposits and mining operations

Operating History • Commercial production started in January 2005 • Historical production is 545,688 oz Au to end Mar, 2012

Reserves and Resources

As at 31 December 2010 and a $1,200/oz. gold price: • Reserves: 130,000 oz Au • Resource: 356,000 oz Au M&I and 77,000 oz Au Inferred

Annual Production Capacity

• Processing capacity of 1.2 million tonnes per annum of oxide ore and 1.0 million tonnes per annum of sulphide ore

• 50,206 oz of gold production in 2011. • 37,716 oz gold produced from 1 Sept to 31 Mar, 2012

Mine Life • Currently 5+ years, opportunity to significantly extend

Production Forecast

• 50,000 oz Au per annum / $1,100 all-in cash cost (incl. royalties, CAPEX and Exploration)

• Opportunity to improve production and reduce cash costs

Mine Location

Processing Operations


http://iamgold.com/Theme/IAmGold/files/design/mine_sites/mupane_location_1_big.gif

Tenements

Galane Gold Ltd. Company Presentation 8

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JIM’S LUCK

SIGNAL HILL

TEKWANE

MUPANE

GOLDEN EAGLE

RAINBOW

MATOPI

MOLOMOLO

Greenstone belt outline

Galane Gold Ltd Mining Licences

Galane Gold Ltd Exploration Targets

Francistown

MONARCH

MAP NORA

Regional Soil Sampling Gold


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Simplified Geology of the Tati Greenstone Belt


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Tati Greenstone Belt Geology & AeroMagnetics

Francistown

20 kilometres

Total Field AeroMagnetics Directional Filtered AeroMagnetics Geology


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Southern Tati Schist Belt Faulting

Mupane Geology

Mupane AeroMagnetics Filtered Mupane Radiometrics (Potassium)

20 kilometres

Mupane Au (ppb) in Soils

Mupane AeroMagnetics Unfiltered

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Monarch AeroMagnetics Filtered Monarch Radiometrics (Potassium) Monarch AeroMagnetics Unfiltered

20 kilometres

Monarch Mine

Shashe Mines

City of Francistown

Monarch Geology Monarch Au (ppb) in Soil


Ultramafic Intrusions




Northern Tati Schist Belt Faulting

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Proximity of Key Gold Targets to Mill

Location of existing Mupane processing and tailings

facility

Potential for discovery of numerous large gold deposits located within 20 km of existing processing operations

Galane Gold Ltd. Company Presentation 14 14

Exploration Program Target Cost

(US$M) Description

Drill and define resource at Jim’s Luck

US$1.9M

• Definition and in-fill drilling on known mineralized zones to define an NI 43-101 reserve and resource

• Drilling of mineralized zones along strike to add to the resource

Tau and Tholo Pit drilling (existing pits that are open at depth)

US$0.5M • Prove up additional gold ore below and between existing pits • Tau already has one hole from pit base with 52 m at 4.5 g/t Au

including 20 m at 6.5 g/t Au

Drill known gold anomalous targets

US$1.5M • These locations are consistent with previous gold deposits having soil sample anomalies but have not had significant drilling carried out if at all

Golden Eagle pit drilling (open at depth)

US$0.4M • Gold mineralisation known to continue below current mine plan pit depth but not included in reserve/resource

Review of exploration database

US$0.1M • A complete and extensive database has not been utilised in respect of extensive exploration activity

• Also requires review with 2010 technology (currently based on 1995) – especially geophysical data

Targeting increase in reserves and resource to +1 million oz Au at a cost of approximately $4.4 million to end of 2013


Low Risk Resource Expansion – Tau and Tholo Pits • Recent drilling results at the previously mined Tau pit include a 53 m intersection averaging 4.55 g/t Au

including: – 24 m at 6.57 g/t Au – 15 m at 5.86 g/t Au

• Potential for underground mines at Tau, Golden Eagle, and other locations


Low Risk Resource Expansion – Jim’s Luck • The Jim’s Luck Project constitutes a 0.5 million oz exploration target • In excess of 7 km of strike of prospective ironstone lithologies

– 830 meters has been drill tested – Known low grade mineralization exists over the balance (6km+)

• Production could commence quickly from the drilled out portion • 140 RC holes (13,170m) and 7 diamond drill holes (1,212m) completed by Gallery Gold (1999 to 2004) and

IAMGOLD (2006) – 77 RC and 7 diamond holes outline the 830m long target zone averaging 6.0m @ 1.87g/t Au, which

‘envelopes’ a higher grade core averaging 3.18m @ 2.77g/t Au – Two wider, higher grade ‘shoots’ have also been identified within the 830m – 30m of strike averaging

6.8m @ 4.65g/t and 50m of strike averaging 6.6m @ 4.28g/t – Drilling to 100m+ has shown the mineralization generally, including the high grade shoots, to be open at

depth with strong down plunge continuity • Preliminary work is in progress on open pit resources and metallurgical testing

Historical Workings Historical Workings


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Jim’s Luck – 7km of Strike


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Jim’s Luck – Detailed Drilling


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Additional Growth Opportunities

• Largest historic gold producer (240,000 oz @ +6 g/t Au) and mined to 200 m below surface • Approximately 500,000 tonnes of fines dump at 1.4 g/t Au (preliminary estimate) • Examine the potential below 200 m where limited drilling by previous workers indicates that the reef continues

with intersections that include 3.20 m @ 3.56 g/t Au and 1.51 m @ 3.62 g/t Au – Design a “deep drilling” program to test this potential – Also examine the Northern extension up to the old Mambo workings, some 1.5 km – There is potential for 250,000 ozs for every 200m vertical depth tranche

• Planning work to be completed by mid 2012

Fines Dump at Monarch Mine


Monarch Mine (Under Application for Prospecting Licence)

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• Historical operation impeded by the refractory nature of the ore

• The Phelps Dodge attempt in late 1980s to early 1990s failed due to metallurgical complexities

• High grade shoots (>10 g/t Au) are continuous down plunge allowing for a potential of 150,000 contained oz Au to depth of 300m vertical depth

• The potential exists for 200,000 oz Au for every 300m vertical depth tranche

• Underground infrastructure, including shaft, headgear and winder, in place and in good order to 340 m vertical depth

• Metallurgy now better understood and a concentrate could be processed at bioleach facilities in South Africa

• Extract a bulk sample from underground for metallurgical test work in late 2012

Headgear at Map Nora Underground Mine

21 Galane Gold Ltd. Company Presentation

MapNora (Shashe Mine)


22 Galane Gold Ltd. Company Presentation

• Virgin discovery by Gallery Gold in 1997 as a coincident gold and arsenic in soil geochemistry anomaly • Preliminary trenching and drilling show a large but low grade and discrete ultramafic unit with uniform mineralization e.g.

35 m @ 0.85g/t Au (including 4 m @ 2.25g/t Au) and 41 m @ 0.86 g/t Au (including 16 m @ 1.85 g/t Au) • Additional work planned for early 2012 to better understand this significant anomaly and to test for better mineralization

possibly missed by the previous work

• Favourably located geologically and physically, between Jim’s Luck and Matopi and close to Signal Hill • An historic underground mine exploiting narrow high grade ‘shoots’ with the potential for larger, lower grade mineralized

‘halos’ • Access to site needs to be repaired before work can commence – planned for Q2 2012, after the rain season

• A string of subtle gold in soil geochemical anomalies sporadically developed over a strike length of 20 km and coincident with a strong linear aeromagnetic geophysical anomaly typical of a significant fault system

• This group of anomalies potentially constitutes a classic case of gold ‘leakage’ up and along a structural system and could be indicative of significant gold mineralization at depth

• More detailed magnetic surveys are planned with drilling of any targets generated in late 2012

• This manifests itself as a “standout” gold in soil geochemical anomaly some 4.5 km2 in size and caused by an auriferous quartz rubble horizon in the soil profile

• Origin of the quartz rubble needs to be established –theory is it could originate from an as yet undiscovered underlying “stockwork” system associated with existing favourable lithologies

• A systemic and extensive, but phased, pitting exercise commences in late 2011

Tekwane

Orapa Road Anomalies

Rainbow

Matopi

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Milestones


2011 Complete Review of Org Structure and skills requirements

Implement Organisational Restructuring

Complete Exploration Plan

Carryout Initial Mine Plan Review

Identify impediments to performance above plan

2012 Complete Acquisition of Northern Lights Exploration

Resource Expansion – commence drilling programme

Resolution of dilution, fragmentation, mine geology and productivity issues

Complete optimised ore tonnage throughput and gold recovery

Complete Mine Geology and Resource Review

Complete revised mining plan

Botswana Stock Exchange Listing

Capital Expenditures – complete full 2 year capital plan

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Investment Highlights

Immediate Leverage to Spot Gold

• Unhedged gold producer • Free cash flow from current 2016

plan in excess of $100 million at $1,700/oz gold price and over $200 million at $2,000/oz

Compelling Valuation on Current Production Alone

Exploration Upside

• Control all prospective ground on the Tati Greenstone belt

• Substantial data set and portfolio of drill-ready targets

• Likelihood of underground expansion of existing pits

Experienced Operating Management

• Strong operators with the ability to optimize and expand the mine

• Ability to leverage African relationships with accretive external growth

Current Valuation Extended Mine Life

Valuation Re-Rating


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The Galane Gold logo was designed by an

employee in a company-wide contest. The blue and black bars in the official colours of Botswana represent the hands of Batswana protecting the country’s resources for the betterment of the country and its people.


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Contacts

Philip Condon Chief Executive Officer [email protected] Mobile: +267 72 338 331 Ravi Sood Chairman (non-executive) [email protected] Mobile: +1 647 987 7663 Investor Relations [email protected] Phone: +1 416 907 2027


Galane gold company presentation

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