GALIANO GOLD INC. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS UNAUDITED - Form 6-K

GALIANO GOLD INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

UNAUDITED

For the three months ended March 31, 2022 and 2021

TABLE OF CONTENTS

Condensed Consolidated Interim Statements of Financial Position	2
Condensed Consolidated Interim Statements of Operations and Comprehensive (Loss) 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	6-24

GALIANO GOLD INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

AS AT MARCH 31, 2022 AND DECEMBER 31, 2021

(In thousands of United States Dollars)

			March 31, 2022			December 31, 2021
	Note		$			$
Assets
Current assets
Cash and cash equivalents			50,384			53,521
Receivables			102			55
Receivable due from related party	4		8,633			7,326
Prepaid expenses and deposits			511			766
			59,630			61,668
Non-current assets
Financial assets	5		72,426			72,426
Right-of-use asset			355			381
Property, plant and equipment			82			93
Exploration and evaluation assets			1,628			1,628
			74,491			74,528
Total assets			134,121			136,196
Liabilities
Current liabilities
Accounts payable and accrued liabilities	4		2,085			2,536
Lease liability			111			107
			2,196			2,643
Non-current liabilities
Long-term incentive plan liabilities	8		304			478
Lease liability			282			312
			586			790
Total liabilities			2,782			3,433
Equity
Share capital	7		579,591			579,591
Equity reserves	8		51,992			51,879
Accumulated deficit			(500,244	)		(498,707	)
Total equity			131,339			132,763
Total liabilities and equity			134,121			136,196
Commitments and contingencies			9
Subsequent event			15

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

	Approved on behalf of the Board of Directors:
	"Matt Badylak"		"Marcel de Groot"
	Director		Director

GALIANO GOLD INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(In thousands of United States Dollars, except dollar per share amounts)

			March 31, 2022			March 31, 2021
	Note		$			$
Service fee earned as operators of joint venture	4		1,307			1,240
Share of net earnings related to joint venture	6		-			13,374
General and administrative expenses	10		(2,752	)		(3,924	)
Exploration and evaluation expenditures			(137	)		-
(Loss) income from operations and joint venture			(1,582	)		10,690
Finance income	11		43			2,412
Finance expense			(9	)		(11	)
Foreign exchange gain (loss)			11			(63	)
Net (loss) income and comprehensive (loss) income for the period			(1,537	)		13,028
Net (loss) income per share:
Basic			(0.01	)		0.06
Diluted			(0.01	)		0.06
Weighted average number of shares outstanding:
Basic	12		224,943,453			224,345,074
Diluted	12		224,943,453			225,016,643

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

GALIANO GOLD INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(In thousands of United States Dollars, except for number of common shares)

			Number of shares			Share capital			Equity reserves			Accumulated deficit			Total equity
	Note					$			$			$			$
Balance as at December 31, 2020			224,253,522			578,750			49,957			(429,824	)		198,883
Issuance of common shares on exercise of stock options	8(a)		309,700			381			(124	)		-			257
Share-based compensation expense	8(a)		-			-			235			-			235
Net income and comprehensive income for the period			-			-			-			13,028			13,028
Balance as at March 31, 2021			224,563,222			579,131			50,068			(416,796	)		212,403
Balance as at December 31, 2021			224,943,453			579,591			51,879			(498,707	)		132,763
Share-based compensation expense	8(a)		-			-			113			-			113
Net loss and comprehensive loss for the period			-			-			-			(1,537	)		(1,537	)
Balance as at March 31, 2022			224,943,453			579,591			51,992			(500,244	)		131,339

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

GALIANO GOLD INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(In thousands of United States Dollars)

			March 31, 2022			March 31, 2021
	Note		$			$
Operating activities:
Net (loss) income for the period			(1,537	)		13,028
Adjustments for:
Share of net earnings related to joint venture	6		-			(13,374	)
Depreciation			37			37
Share-based compensation	10		(182	)		1,340
Finance income	11		(43	)		(2,412	)
Finance expense			7			8
Unrealized foreign exchange loss			21			5
Operating cash flow before working capital changes			(1,697	)		(1,368	)
Change in non-cash working capital	13		(1,468	)		(3,311	)
Cash used in operating activities			(3,165	)		(4,679	)
Investing activities:
Redemption of preferred shares in joint venture	5		-			5,000
Acquisition of exploration and evaluation assets, net of cash acquired			-			(1,470	)
Expenditures on property, plant and equipment			(1	)		(14	)
Interest received			43			28
Cash provided by investing activities			42			3,544
Financing activities:
Shares issued for cash on exercise of stock options	8(a)		-			257
Office lease payments			(34	)		(30	)
Cash (used in) provided by financing activities			(34	)		227
Impact of foreign exchange on cash and cash equivalents			20			(8	)
Decrease in cash and cash equivalents during the period			(3,137	)		(916	)
Cash and cash equivalents, beginning of period			53,521			62,151
Cash and cash equivalents, end of period			50,384			61,235
Supplemental cash flow information	13

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

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 2600, Three Bentall Centre, 595 Burrard Street, Vancouver, V7X 1L3. The Company's common shares trade on the Toronto Stock Exchange ("TSX") and NYSE American Exchange ("NYSE American") under the ticker symbol "GAU".

The Company's principal business activity is the operation of the Asanko Gold Mine ("AGM") through a 50:50 joint venture arrangement (the "JV") associated with the Company's 45% economic interest in the AGM (see note 6) and exploration and development of the JV's mineral property interests. The Government of Ghana has a 10% free-carried interest in the AGM. The AGM consists of two neighboring gold projects, the Obotan Project and the Esaase Project, both located in the Amansie West District of the Republic of Ghana ("Ghana"), West Africa.

In addition to its interest in the AGM, the Company holds gold concessions in various stages of exploration. The concessions include a portfolio of Ghanaian properties through its 50% interest in the JV, the 100% owned Asumura property in Ghana and 100% owned exploration properties in Mali.

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 years ended December 31, 2021 and 2020.

The accounting policies followed in these condensed consolidated interim financial statements are the same as those applied in the Company's most recent audited consolidated annual financial statements for the years ended December 31, 2021 and 2020.

These condensed consolidated interim financial statements were authorized for issue and approved by the Board of Directors on May 5, 2022.

(b)Basis of presentation and consolidation

These consolidated 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 March 31, 2022. 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 as to obtain benefits from its activities.

2.Basis of presentation (continued)

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.

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

The principal subsidiaries and joint arrangements to which the Company is a party, as well as their geographic locations, were as follows as at March 31, 2022:

(c)Accounting standards adopted during the period

There were no new standards effective January 1, 2022 that impacted these condensed consolidated interim financial statements.

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

There were no accounting standards or amendments to existing standards issued but not yet adopted as of January 1, 2022 that are expected to have a material effect on the Company's or the JV's financial statements in the future.

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.

The Company's significant accounting judgements and estimates were presented in note 5 of the audited annual consolidated financial statements for the years ended December 31, 2021 and 2020. The following estimates had a significant effect on these condensed consolidated interim financial statements and the financial results of the JV.

3.Significant accounting judgements and estimates (continued)

Mineral reserves

Estimates of the quantities of proven and probable mineral reserves form the basis for the JV's life‐of‐mine plans, which are used for a number of key business and accounting purposes, including: the calculation of depletion expense, the capitalization of stripping costs, the forecasting and timing of cash flows related to the asset retirement provision and impairment assessments, if any. To the extent that these estimates of proven and probable mineral reserves vary, there could be changes in depletion expense, stripping assets, asset retirement provisions and impairment charges recorded. The Company determined it was not in a position to declare mineral reserves for the AGM in its updated National Instrument 43‐101 Technical Report ("NI 43‐101"), filed on March 29, 2022, with an effective date of February 28, 2022.

As such given that mining and processing operations continued, the JV utilized internal models in order to estimate life of mine tonnes for the purpose of units-of-production depletion of mineral properties, plant and equipment during the period.

4.Balances due from/to related party

Under the terms of the Joint Venture Agreement (the "JVA") that governs the management of the JV (note 6), the Company remains the manager and operator of the JV and currently receives an arm's length fee for services rendered to the JV of $6.5 million per annum (originally $6.0 million, but adjusted annually for inflation).

During the three months ended March 31, 2022, the Company earned a service fee of $1.3 million as operator of the JV (three months ended March 31, 2021 - $1.2 million). For the three months ended March 31, 2022, the service fee was comprised of a gross service fee of $1.6 million less withholding taxes payable in Ghana of $0.3 million (three months ended March 31, 2021 - gross service fee of $1.5 million less withholding taxes payable in Ghana of $0.3 million). As at March 31, 2022, the Company had a receivable due from the JV in respect of the service fee in the amount of $8.6 million, net of withholding taxes (December 31, 2021 - $7.3 million).

As at March 31, 2022, accounts payable and accrued liabilities include a payable due to the JV in the amount $0.1 million relating to services performed by the JV on the Company's wholly owned Asumura property in Ghana (December 31, 2021 - nil).

All transactions with related parties have occurred in the normal course of operations and were measured at the exchange amount agreed to by the parties. All amounts are unsecured, non-interest bearing and have no specific terms of settlement.

During the period, the JV received regulatory approval from the Ghana Investment Promotion Centre to settle the Company's service fee as operators of the JV. The Company expects to collect a portion of its receivable due from the JV during Q2 2022.

5.Financial assets

As part of the JV transaction with Gold Fields (note 6), the Company initially subscribed to 184.9 million non-voting fixed redemption price redeemable preferences shares in Shika Group Finance Limited (the "preference shares"), which were issued at a par value of $1 per redeemable share. The preference shares have no fixed redemption date. As these preference shares have no contractual fixed terms of repayment that arise on specified dates, they are measured at fair value through profit or loss at each reporting period-end and are classified as a Level 3 financial asset in the fair value hierarchy.

The following table summarizes the change in the carrying amount of the Company's preference shares held in the joint venture:

During the three months ended March 31, 2022, there was no change in the fair value of the preference shares (three months ended March 31, 2021 - positive fair value adjustment of $2.3 million recognized in finance income).

6.Asanko Gold Mine joint venture

On July 31, 2018, the Company completed a transaction (the "JV Transaction") with a subsidiary of Gold Fields Limited ("Gold Fields"), following which:

• the Company and Gold Fields each own a 45% economic interest in Asanko Gold Ghana Limited ("AGGL"), which owns the AGM, with the Government of Ghana retaining a 10% free-carried interest in the AGM;

• the Company and Gold Fields each own a 50% interest in Adansi Gold Company (GH) Limited ("Adansi Ghana"), which owns a number of exploration licenses; and

• the Company and Gold Fields each acquired a 50% interest in the JV entity, Shika Group Finance Limited ("Shika").

As the JV is structured within the legal entities of AGGL, Adansi Ghana and Shika, the JV represents a joint venture as defined under IFRS 11 - Joint Arrangements, and the Company commenced equity accounting for its interest in the JV effective July 31, 2018.

6.Asanko Gold Mine joint venture (continued)

The following table summarizes the change in the carrying amount of the Company's investment in the AGM joint venture:

The Company did not recognize its share of the JV's net loss for the three months ended March 31, 2022 as the carrying value of the Company's investment in the JV was nil as at March 31, 2022. For the three months ended March 31, 2021, the company recognized its share of the JV's net earnings of $13.4 million.

Operating and financial results of the AGM JV for the three months ended March 31, 2022 and 2021

Summarized financial information for the AGM JV, on a 100% basis, is outlined in the table below.

All disclosures in this note 6 are on a 100% JV basis, unless otherwise indicated. The JV applies the same accounting policies as the Company.

Three months ended March 31, 2022 and 2021

6.Asanko Gold Mine joint venture (continued)

The assets and liabilities of the AGM JV, on a 100% basis, as at March 31, 2022 and December 31, 2021 were as follows:

6.Asanko Gold Mine joint venture (continued)

The Company has provided the following incremental disclosures for stakeholders to evaluate the financial performance and financial condition of the AGM. All amounts in the following tables and descriptions are on a 100% basis.

(i)Revenues

AGGL has an offtake agreement with a special purpose vehicle of RK Mine Finance Trust I ("Red Kite") with the following details (the "Offtake Agreement"):

-sale of 100% of the future gold production from the AGM up to a maximum of 2.2 million ounces to Red Kite;

-Red Kite to pay for 100% of the value of the gold ten business days after shipment;

-a provisional payment of 90% of the estimated value will be made one business day after delivery;

-the gold sale price will be a spot price selected during a nine-day quotational period following shipment of gold from the mine;

-performance obligations of the AGM are satisfied once the refining outturn report is provided to Red Kite; and

-should AGGL wish to terminate the Offtake Agreement, a termination fee will be payable according to a schedule dependent upon the amount of gold delivered under the Offtake Agreement at the time of termination.

During the three months ended March 31, 2022, the AGM sold 41,929 ounces of gold to Red Kite under the Offtake Agreement (three months ended March 31, 2021 - 62,925 ounces).

As of March 31, 2022, the AGM has delivered 1,341,185 ounces to Red Kite under the Offtake Agreement. The Offtake Agreement was not affected by the JV Transaction and will remain in effect until all contracted ounces have been delivered to Red Kite or AGGL elects to terminate the Offtake Agreement and pay the associated termination fee.

Included in revenue of the AGM is $0.1 million relating to by-product silver sales for the three months ended March 31, 2022 (three months ended March 31, 2021 - $0.2 million).

(ii)Production costs and royalties

The following is a summary of production costs by nature, on a 100% basis, incurred during the three months ended March 31, 2022 and 2021:

6.Asanko Gold Mine joint venture (continued)

During the three months ended March 31, 2022, the AGM recognized a $6.7 million reversal of previously recorded net realizable value adjustments on its stockpile inventory, of which $4.5 million was credited against production costs and $2.2 million was credited against depreciation expense (three months ended March 31, 2021 - $0.7 million reversal of previously recorded net realizable value adjustments on its stockpile inventory, of which $0.6 million was credited against production costs and $0.1 million credited against depreciation expense).

All of the AGM's concessions are subject to a 5% gross revenue royalty payable to the Government of Ghana. The AGM's Akwasiso mining concession is also subject to an additional 2% net smelter return royalty payable to the previous owner of the mineral tenement, and the AGM's Esaase mining concession is also subject to an additional 0.5% net smelter return royalty payable to the Bonte Liquidation Committee, both of which are presented in production costs.

(iii)Inventories

The following is a summary of inventories held by the AGM, on a 100% basis, as at March 31, 2022 and December 31, 2021:

(iv)Reclamation deposit

The AGM is required to provide security to the Environmental Protection Agency of Ghana ("EPA") for the performance by the AGM of its reclamation obligations in respect of its mining leases.

The AGM deposits the reclamation deposit in a Ghanaian bank and the reclamation deposit is required to be held until receiving a final reclamation completion certificate from the EPA. The AGM is expected to be released from this requirement 45 days following the third anniversary of the date that the AGM receives a final completion certificate. The reclamation deposit accrues interest and is carried at $4.6 million as of March 31, 2022 (December 31, 2021 - $1.9 million).

Total security expected to be provided to the EPA for the Obotan deposits totals $15.6 million and comprises a reclamation deposit of $4.6 million and a bank guarantee of $10.9 million, 50% of which was provided by the Company (note 9).

6.Asanko Gold Mine joint venture (continued)

The security provided to the EPA for the Esaase deposits is $1.1 million and comprised a reclamation deposit of $0.2 million and a bank guarantee of $0.9 million, 50% of which was provided by the Company (note 10). The cash reclamation deposit of $0.2 million is expected to be paid in the second quarter of 2022.

(v)Right-of-use assets

The following table shows the movement in the right-of-use asset related to the service and lease agreements of the AGM for the three months ended March 31, 2022 and year ended December 31, 2021:

(vi)Mineral properties, plant and equipment

Additions to mineral properties, plant and equipment

During the three months ended March 31, 2022, the AGM capitalized $2.4 million in expenditures related to mineral properties, plant and equipment ("MPP&E"), excluding capitalized deferred stripping costs and asset retirement costs (three months ended March 31, 2021 - additions of $6.8 million).

Deferred stripping

During the three months ended March 31, 2022, the AGM did not defer any costs relating to stripping activities on depletable mineral interests (three months ended March 31, 2021 - additions of $1.0 million).

Depreciation and depletion

During the three months ended March 31, 2022, the AGM recognized depreciation and depletion expense of $9.9 million on MPP&E, while a further $0.9 million of depreciation was capitalized to the cost of inventories (three months ended March 31, 2021 - depreciation and depletion expense of $12.2 million on MPP&E, while a further $0.1 million of depreciation was capitalized to the cost of inventories).

2021 Impairment

On February 25, 2022, the Company announced that recent gold recovery at the AGM had been lower than expected. The Company determined the AGM was not in a position to declare mineral reserves in its updated NI 43‐101 filed on March 29, 2022, with an effective date of February 28, 2022. The Company considered these factors to represent an indicator of impairment of the MPP&E of the AGM and as such during the year ended December 31, 2021, the JV recorded an impairment of $153.2 million to MPP&E based on an estimate of the recoverable amount of the AGM.

6. Asanko Gold Mine joint venture (continued)

(vii)Lease liabilities

The following table shows the movement in the lease liabilities related to the service and lease agreements of the AGM for the three months ended March 31, 2022 and year ended December 31, 2021:

(viii)Severance provisions

In light of the changing nature of operations at the AGM, the Company has undertaken a process of right sizing its workforce. As at March 31, 2022, the AGM recognized a $21.0 million severance provision associated with restructuring its labour force. Of this amount, $5.9 million is expected to be paid in 2022 and has been presented in the JV's balance sheet as accounts payable and accrued liabilities. The balance of the provision of $15.1 million is expected to be paid over two years and therefore has been presented as a non-current severance liability.

(ix)Asset retirement provisions

The following table shows the movement in the asset retirement provisions of the AGM for the three months ended March 31, 2022 and year ended December 31, 2021:

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

As at March 31, 2022, the AGM's reclamation cost estimates were discounted using a long-term risk-free discount rate of 2.4% (December 31, 2021 - 1.5%). The change in estimate during the period was primarily due to an increase in the risk-free discount rate.

6. Asanko Gold Mine joint venture (continued)

(x)Preferred shares

The following table shows the movement in the JV partners' preferred share investments in the JV for the three months ended March 31, 2022 and year ended December 31, 2021:

(xi)Revolving credit facility

In October 2019, the JV entered into a $30.0 million revolving credit facility (the "RCF") with Rand Merchant Bank ("RMB"). The term of the RCF is three years, maturing in September 2022, and bears interest on a sliding scale of between LIBOR plus a margin of 4% and LIBOR plus a margin of 3.8%, depending on the security granted to RMB. Commitment fees in respect of any undrawn portion of the RCF will accrue on a similar sliding scale of between 1.33% and 1.40%. As at March 31, 2022, the balance drawn under the RCF was nil (December 31, 2021 - nil).

During the three months ended March 31, 2022, the AGM recognized standby charges associated with the RCF of $0.1 million (three months ended March 31, 2021 - interest expense and other fees of $0.3 million).

(xii)Finance expense

The following is a summary of finance expenses incurred by the AGM JV during the three months ended March 31, 2022 and 2021:

6.Asanko Gold Mine joint venture (continued)

(xiii) The cash flows of the AGM, on a 100% basis, were as follows for the three months ended March 31, 2022 and 2021:

7. Share capital

(a)Authorized:

Unlimited common shares without par value or restrictions.

(b)At-the-Market Offering ("ATM")

On June 25, 2020, the Company entered into an ATM agreement with H.C. Wainwright & Co. and Cormark Securities (the "Agents"). Under the ATM agreement, the Company may, at its discretion and from time-to-time during the term of the ATM agreement, sell through the Agents common shares of the Company for aggregate gross proceeds to the Company of up to $50.0 million (the "Offering"). The Company expects to use any net proceeds of the Offering for general corporate and working capital requirements, including, but not limited to, funding exploration activity on the Company's wholly owned early-stage exploration properties in Ghana and Mali, funding the Company's working capital requirements, repaying indebtedness outstanding from time to time, completing future acquisitions and/or for other corporate purposes.

As of March 31, 2022, the Company has not issued any common shares under the Offering.

8. 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 March 31, 2022, all units awarded have been cash-settled.

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.

(a)Stock options

Options granted vest in 1/3 increments every twelve months following the grant date for a total vesting period of three years. Stock options have a maximum term of 5 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:

During the three months ended March 31, 2022, the Company recognized $0.1 million of share-based compensation expense relating to stock options (three months ended March 31, 2021 - $0.2 million).

(b)Restricted Share Units

RSUs granted vest in 1/3 increments every twelve months following the grant date for a total vesting period of three years. RSUs are cash-settled awards and therefore represent a financial liability which is required to be marked-to-market at each reporting period end with changes in fair value recognized in the Statement of Operations and Comprehensive (Loss) Income.

The following table is a reconciliation of the movement in the number of RSUs outstanding for the three months ended March 31, 2022 and year ended December 31, 2021:

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

The following table is a reconciliation of the movement in the RSU liability for the three months ended March 31, 2022 and year ended December 31, 2021:

The financial liability associated with cash-settled RSU awards is recorded in accounts payable and accrued liabilities for amounts expected to be settled within one year, and a separate long-term incentive plan liability for amounts to be settled in excess of one year.

(c)Performance share units

PSUs vest in 1/3 increments every twelve months following the grant date for a total vesting period of three years and also 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. The PSU performance multiplier ranges from 0% to 150%.

PSUs are cash-settled awards and therefore represent a financial liability which is required to be marked-to-market at each reporting period end with changes in fair value recognized in the Statement of Operations and Comprehensive (Loss) Income.

The following table is a reconciliation of the movement in the number of PSUs outstanding for the three months ended March 31, 2022 and year ended December 31, 2021:

The following table is a reconciliation of the movement in the PSU liability for the three months ended March 31, 2022 and year ended December 31, 2021:

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

The financial liability associated with cash-settled PSU awards is recorded in accounts payable and accrued liabilities for amounts expected to be settled within one year, and a separate long-term incentive plan liability for amounts to be settled in excess of one year.

(d)Deferred share units

DSUs have no vesting terms or conditions and such the Company recognizes 100% of the fair value of DSUs on the grant date in the Statement of Operations and Comprehensive (Loss) Income. DSUs will be paid to directors upon their retirement from the Board of Directors of the Company or upon a change of control.

DSUs are cash-settled awards and therefore represent a financial liability which is required to be marked-to-market at each reporting period end with changes in fair value recognized in the Statement of Operations and Comprehensive (Loss) Income.

The following table is a reconciliation of the movement in the number of DSUs outstanding for the three months ended March 31, 2022 and year ended December 31, 2021:

The following table is a reconciliation of the movement in the DSU liability for the three months ended March 31, 2022 and year ended December 31, 2021:

The financial liability associated with cash-settled DSU awards is recorded in accounts payable and accrued liabilities.

(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 will vest 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 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 as a long-term incentive plan liability.

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

The following table is a reconciliation of the movement in the phantom share unit liability for the three months ended March 31, 2022 and year ended December 31, 2021:

The financial liability associated with cash-settled phantom share unit awards is recorded in long-term incentive plan liabilities.

9.Commitments and contingencies

Commitments

The following table reflects the Company's contractual obligations as they fall due, excluding commitments and liabilities of the JV, as at March 31, 2022 and December 31, 2021:

In addition to the above commitments, the Company has provided a parent company guarantee on the unfunded portion of the AGM's reclamation bond in the amount of $5.9 million (December 31, 2021 - parent company guarantee of $5.9 million).

Contingencies

Due to the nature of its business, the Company and/or its affiliates 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.

10.General and administrative expenses

The following is a summary of general and administrative expenses incurred during the three months ended March 31, 2022 and 2021. General and administrative expenses for the periods presented include, but are not limited to, those expenses incurred in order to earn the service fee as operators of the JV (note 4).

11.Finance income

The following is a summary of finance income earned during the three months ended March 31, 2022 and 2021:

12.(Loss) income per share

For the three months ended March 31, 2022 and 2021, the calculation of basic and diluted (loss) income per share is based on the following data:

For the three months ended March 31, 2022, the effect of all potentially dilutive securities was anti-dilutive given that the Company reported a net loss for the period. For the three months ended March 31, 2021, 9,534,000 stock options outstanding were excluded from the calculation of diluted weighted average shares as they were determined to be anti-dilutive.

13.Supplemental cash flow information

The following table summarizes the changes in non-cash working capital for the three months ended March 31, 2022 and 2021:

14.Segmented information

Geographic Information

As at March 31, 2022, the Company has only one reportable operating segment being the corporate function with its head office in Canada. Total assets in West Africa include the Company's 45% interest in the Asanko Gold Mine JV.

Geographic allocation of total assets and liabilities

14.Segmented information (continued)

Geographic allocation of the Statement of Operations and Comprehensive (Loss) Income

For the three months ended March 31, 2022:

For the three months ended March 31, 2021:

15.Subsequent event

Subsequent to March 31, 2022, the Company granted the following awards under its stock option and share unit plans to directors, officers and employees of the Company:

• 4,480,000 stock options
• 1,435,600 PSUs
• 988,400 DSUs
• 354,600 RSUs

Public link

Please use the above public link if you want to share this noodl on another website.