Mr. Nick Brodie reports

GOLCONDA GOLD ANNOUNCES GOLD STREAMING TRANSACTION FOR ITS GALAXY PROJECT

Golconda Gold Ltd. has entered into a $5-million (U.S.) stream transaction relating to its Galaxy project in South Africa with Empress Royalty Holding Corp., a wholly owned subsidiary of Empress Royalty Corp.

Golconda Gold, its subsidiary Galaxy Gold Reefs Pty. Ltd., and certain of its affiliates, have entered into a metal purchase and sale agreement dated Nov. 21, 2023, 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 $5-million (U.S.) for payable gold produced from the Galaxy mine. The investment is based on 3.5 per cent of the payable gold production from the Galaxy mine for an initial 8,000 payable ounces, thereafter, the percentage will reduce to 2 per cent 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 per cent of the gold spot price. The closing of the transaction and the financing 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.

The Galaxy gold mine

Golconda Gold acquired the Galaxy mine in November, 2015. Galaxy is situated eight kilometres west of the town of Barberton and 45 km west of the provincial capital of Nelspruit in the Mpumalanga province of South Africa. The property covers 58.6 square km and is part of the prolific Barberton greenstone belt.

Galaxy consists of 22 orebodies, all of which can be accessed via adits at level 17 and level 22. Galaxy is currently mining at the following two main orebodies:

• Galaxy orebody -- a massive pipe-shaped orebody with a thickness of 35 m and a strike of around 100 m;
• Princeton orebody -- a steeply dipping orebody with a thickness of five m and a strike of 300 m.

The current mine plan includes the mining of the Galaxy orebody and the Princeton orebody using a mechanized cut-and-fill mining method. There are also extensive tailings around the Galaxy mine site which Golconda Gold intends to use to supplement production. Golconda Gold has already upgraded the crushing circuit, float plant and filtration plant to 50,000 tpm, from the original 15,000 tpm plant, which produces a gold concentrate.

Galaxy is currently in phase 1 of its expansion program, taking production to 15,000 tpm and 1,100 recovered gold ounces per month. The proceeds from the agreement will be used to finance the expansion required in phase 2 to take production to 48,000 tpm and 2,800 recovered gold ounces per month.

Golconda Gold has completed the Galaxy technical report and the PEA (preliminary economic assessment) (as such terms are defined below) for the Galaxy mine, which supports the expansion plans already undertaken and the future plans for expansion. In addition, Golconda Gold has a drill-ready plan to expand the resource to over four million ounces, which encompasses the other 20 identified orebodies. Work is already under way to determine how this can support future expansion of Galaxy.

Empress has completed a site visit and a third party engineering firm has satisfactorily completed a technical analysis of the Galaxy mine. The use of proceeds from the transactions contemplated by the agreement will enhance and expand the production profile at Galaxy moving forward.

About Golconda Gold Ltd.

Golconda Gold is an unhedged gold producer and explorer with mining operations and exploration tenements in South Africa and New Mexico. Golconda Gold is a public company and its shares are quoted on the TSX Venture Exchange under the symbol GG and the OTCQB under the symbol GGGOF. Golconda Gold's management team comprises senior mining professionals with extensive experience in managing mining and processing operations and large-scale exploration programs. Golconda 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. Golconda Gold's primary objective is to be reshaped into a long-life and low-cost operation that can produce positive returns for investors across commodity cycles by:

• Optimizing current mining, processing and administrative operations to reduce costs and maximize profits;
• Grow through opportunistic acquisition and development opportunities.

We seek Safe Harbor.