05:18 PM EST, 12/04/2024 (MT Newswires) -- Galiano Gold ( GAU ) after close Wednesday said it terminated its gold purchase and sale agreement with Red Kite Opportunities Master Fund Limited for total cash consideration of US$13 million.

Under the Agreement, the company had been required to sell 100% of gold production from the Asanko Gold Mine (AGM), up to a maximum of 2.2-million ounces, at a spot price selected by Red Kite during a nine-day quotational period following shipment of gold from the AGM.

At the time of termination, the AGM had delivered 1,706,407 gold ounces to Red Kite under the Agreement.

Over the past two years, during a period of elevated gold prices and volatility, the differential between the AGM's realized gold price under the Agreement and the spot price of gold on the gold delivery date, has resulted in a discount of approximately 2%.

"With the company's strong, debt-free balance sheet, we are pleased to have the financial flexibility to terminate this legacy offtake agreement as part of our prudent capital allocation strategy," said chief exeecutive Matt Badylak. "This strategic investment allows the AGM to sell gold at market prices, delivering meaningful value as we advance our business plan."

Galiano shares closed down $0.08 to $1.90 on the Toronto Stock Exchange.