Galane Gold Ltd. Reports Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Nov. 28, 2011) - Galane Gold Ltd. ("Galane Gold" or the "Company") (TSX VENTURE:GG) today released its interim unaudited consolidated financial results for the three and nine months ended September 30, 2011. Complete unaudited interim condensed financial statements and the related management's discussion and analysis are available under the Company's profile on www.sedar.com. All amounts in this release are expressed in US dollars unless otherwise indicated.

Third Quarter Highlights

• Purchased 100% of the issued and outstanding shares of Gallery Gold Pty Ltd. ("Gallery Gold"), from IAMGOLD Corporation for an aggregate purchase price of $34.2 million.
• Assumed operational control of the Mupane gold mine in Botswana (the "Mupane Gold Mine") on August 31, 2011 and completed listing of shares on the TSX-Venture Exchange by way of a reverse-takeover.
• Produced 4,410 ounces of gold in September at an average cash cost of $1,166 per ounce before royalties, $1,247 inclusive of royalties.
• On October 5, 2011, 4,410 ounces of gold from Mupane Gold Mine's production in September were sold at a price of $1,652 per ounce, generating revenue of $7.2 million.
• Cash flow generated from operations for the period from August 30, 2011 (the date Gallery Gold was acquired) to September 30, 2011, adjusted for the sale on October 5, 2011 of gold produced during the period then ended was $2.7 million.
• Working capital as at September 30, 2011 of $8.6 million including a cash balance of $3.9 million.

Philip Condon, CEO of Galane Gold, commented: "We are very pleased to release our Q3 unaudited results, the first quarterly report under the new Galane Gold management. Upon successful completion of the acquisition of Gallery Gold and assumption of operational control on August 30, 2011 management embraced the transition to the new ownership structure and immediately commenced working towards a new future for the company. I was very impressed with the commitment of all concerned and I look forward to building on this foundation towards a successful future of the Mupane Gold Mine operation and the potential benefits that our exploration efforts can bring."

Third Quarter 2011 Financial Highlights

• Raised net proceeds of $14,929,325 at CDN$0.80 per unit from the sale of 20,545,500 common shares plus 10,272,750 warrants to purchase common shares at CDN$1.10 per share, exercisable until March 1, 2013. Canaccord Genuity Corp. (the "Agent") acted as agent and received commissions of $1,545,186 plus 1,232,730 warrants to purchase common shares at CDN$0.80, exercisable until March 1, 2013;
• Closed two acquisitions on August 30, 2011:
  • Purchased 100% of the issued and outstanding shares of Gallery Gold from IAMGOLD Corporation for an aggregate purchase price of $34.2 million:
    • Through a subsidiary company, Gallery Gold owns and operates the Mupane Gold Mine, which has reserves of 125,000 ounces of gold, and a fully functioning processing facility;
    • Aggregate consideration was:
      • $3.8 million debt; and
      • $12.5 million cash;
      • $17.9 million common shares; and
  • Completed a reverse-takeover transaction with Carlaw Capital III Corp. ("Carlaw"), allowing the Company to list its shares on the TSX Venture Exchange
• Net loss was $3.9 million ($3.5 million excluding a one-time expense relating to the acquisition of Carlaw), on revenue of $1.5 million from the sale of 650 ounces of gold from August 30, 2011 (the date the Mupane Gold Mine was acquired) to September 30, 2011.
• Basic and diluted loss per share for the quarter was $0.23. ($0.21 excluding the Carlaw charge)

Revenue and Gold Production

Revenue was $1.5 million on the sale of 650 ounces of gold at an average price of $1,813 per ounce and 7,300 ounces of silver at an average price of $41 per ounce. On October 5, 2011, 4,410 ounces of gold from the Mupane Gold Mine's production in September were sold at a price of $1,652 per ounce, generating revenue of $7.2 million that will be recognized in the fourth quarter of 2011.

Operating Costs

Mine operating costs were $2.7 million, plus depreciation of 1.0 million, creating an operating loss from the Mupane Gold Mine of $2.2 million primarily due to growth in the gold inventory from production in the month of September by 4,410 ounces.

Net Income

Corporate costs in the quarter amounted to $1.7 million, primarily due to a stock- based compensation provision on 1,765,000 options to purchase common shares granted on September 29, 2011 of $0.9 million, and the one-time charge of $0.4 million relating to the acquisition of Carlaw, resulting in a loss for the period of $3.9 million.

Exploration

Exploration activity since the acquisition has centered on the build-up to the 2012 drilling program. Multiple sources of data from previous extensive exploration activity across the region are being consolidated into a single database and compiled for optimal use. This data is being re-examined utilizing today's exploration analysis technology with the objective of confirming existing priority targets and identifying additional targets of interest. A complete review and prioritization of all targets will be completed and an exploration program defined and implemented for top priority targets. Additional specialized personnel are being recruited in line with the 2012 exploration plan.

Outlook

"We are very pleased to see the early progress at Galane Gold's operations in Botswana. There are clear opportunities to improve the performance and profitability of the existing operations. Moreover, there is a long list of exploration targets for which the company already has substantial data. The outlook for gold prices remains constructive and management is focused on maximizing investors leverage to gold by improving operating performance and expanding resources through exploration" said Ravi Sood, Chairman of Galane Gold. "Over the next several quarters the Company will be making capital investments aimed at improving plant throughput and lowering cash costs. The exploration program that commenced upon closing the acquisition will progress to drilling in 2012. We look forward to providing updates to shareholders on these and other initiatives in the coming months."

About Galane Gold Ltd.

Galane Gold Ltd. is an un-hedged gold producer and explorer with mining operations and exploration tenements in the Republic of Botswana. Galane Gold is a public company and its shares are quoted on the TSX Venture Exchange under the symbol GG. Galane Gold's management team is comprised of senior mining professionals with extensive experience in managing mining and processing operations and large-scale exploration programs. Galane Gold is committed to operating at world-class standards and is focused on the safety of its employees, respecting the environment, and contributing to the communities in which it operates.

Cautionary Notes

Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding the stated use of proceeds; plan of operations and comparative advantages; and benefits of this investment. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, regulatory risks, risks inherent in foreign operations, commodity prices, competition, and investments having no history of operations. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.