TORONTO, May 23, 2018 (GLOBE NEWSWIRE) -- Galantas Gold Corporation (the "Company" or “Galantas”) (TSXV:GAL) (AIM:GAL) is pleased to announce its financial results for the Quarter ended March 31, 2018.
Financial Highlights
Highlights of the first quarter 2018 results, which are expressed in Canadian Dollars, are summarized below:
| Quarter Ended March 31 | ||||||
| All in CDN$ | 2018 | 2017 | ||||
| Revenue | $ | 0 | $ | 2,734 | ||
| Cost of Sales | $ | (24,066 | ) | $ | (63,416 | ) |
| Loss before the items below | $ | (24,066 | ) | $ | (60,682 | ) |
| Amortization | $ | (64,249 | ) | $ | (40,055 | ) |
| General administrative expenses | $ | (408,890 | ) | $ | (502,116 | ) |
| Unrealized (loss) / gain on fair value of derivative financial liability | $ | 10,000 | $ | (22,000 | ) | |
| Foreign exchange (loss) / gain | $ | (37,293 | ) | $ | ( 59,381 | ) |
| Net (Loss) for the quarter | $ | (524,498 | ) | $ | (684,234 | ) |
| Working Capital (Deficit) | $ | (5,123,420 | ) | $ | (1,395,866 | ) |
| Cash (loss) generated from operations before changes in non-cash working capital | $ | (332,420 | ) | $ | (394,599 | ) |
| Cash at March 31, 2018 | $ | 182,513 | $ | 2,310,653 | ||
The Net Loss for the quarter ended March 31, 2018 amounted to CDN$ 524,498 (2017: CDN$ 684,234) and the cash outflow from operating activities before changes in non-cash working capital items for the quarter ended March 31, 2018 amounted to CDN$ 332,420 (2017: CDN$ 394,599).
There were no financing activities during the first quarter. Additional loan advances from G&F Phelps Ltd, a related party, during the quarter totalled $ 399,074 (UK£ 220,410). Subsequent to March 31, 2018 Galantas announced that its operating subsidiary, Flintridge Resources Ltd. had signed a concentrate pre-payment agreement and a loan facility agreement for US$ 1.6 million (CDN$ 2.012 million) with Ocean Partners UK Ltd., together with an increased, on-demand loan facility of £600,000 with G&F Phelps Ltd. (See press release dated April 12, 2018 for further details).
Permitting
In November 2017, Galantas reported that it had received notice of an application, by a third party, to the Court of Appeal, in relation to a positive judicial review judgment regarding the grant of planning permission. This was subsequently heard in February 2018. The Court will deliver its judgement at a later date, currently unknown.
Production/Mine Development
Production of flotation concentrate at the Omagh mine from development ore is expected to restart early in the third quarter of 2018. The granting of planning consent in 2015 for an underground operation at the Omagh site, now subject to a judicial review appeal result, permits the continuation and expansion of gold mining underground, following the exhaustion of accessible resources available to the previous open pit operation. The underground mine, which is now in active development, will utilize the same processing methods and will be the first underground gold mine, of any scale, in Ireland. The strategy is to establish the underground mine and look for further expansion of gold resources on the property, which has many undrilled targets.
The phased development arrangement, in terms of mine access dimensions, is expected to allow for rapid expansion of production as additional capital becomes available. The mill has now been re-commissioned in anticipation of a restarting of concentrate shipments.
Underground development of a decline tunnel, located at the base of the existing open pit, started in the first quarter 2017. After over-coming initial difficulties, tunnelling continued through 2017, the first quarter 2018 and to date. A detailed plan is being implemented to accelerate progress in line with the planning consent. The development of the first underground ore drive, which lies beneath a safety (crown) pillar against the Kearney open pit above, was projected, 20th April 2018, as approximately 90 metres away. This was expected to be reached at the end of June but the current progress suggests this may be reached earlier in June, with processing of development ore recommencing early in the third quarter of 2018. Underground development, using drill and blast techniques, is being carried out by an in-house crew which is fully trained in safety and operating procedures. An in-house, mines rescue team has also been trained and equipped.
The present drilling and loading equipment, which was purchased for training and early tunnel development purposes, is performing above expectations but has lower productivity than is expected with current technology. New drilling equipment is being acquired on a rental basis, with options to purchase, and is expected to improve advance rates by over 40%. The supplier of the equipment has advised of delays in production of the new equipment but has recently commissioned a substitute used tunnelling drill rig on loan. Whilst the interim unit is not expected to be as efficient compared to the new rig, this has led to a significant improvement in advance rate. Infrastructure improvements were required to support the rig which were implemented during the first quarter of 2018. Additional personnel have been added to the workforce, which now total 27 on the Omagh site.
Safety and environmental matters remains a high priority for Galantas. The Company is pleased to report zero lost time accidents for the quarter and routine water and other environmental monitoring continues to be compliant.
Roland Phelps, President and CEO of Galantas Gold Corporation, commented, “I look forward to seeing the improved advanced rate continue. The anticipated start of operations at the flotation plant in coming months marks a milestone in underground operations. We continue to invest in improved equipment and training of personnel and expect to accelerate this as cash is generated from operations.”
The detailed results and Management Discussion and Analysis (MD&A) are available on www.sedar.com and www.galantas.com and the highlights in this release should be read in conjunction with the detailed results and MD&A. The MD&A provides an analysis of comparisons with previous periods, trends affecting the business and risk factors.
The Annual General and Special Meeting of the Company will be held at Thursday, June 28, 2018 at 11:00 a.m. (Toronto time) at the registered office of the Company, DSA Corporate Services Inc. 82 Richmond Street East, Toronto, Ontario, M5C 1P1.
Qualified Person
The financial components of this disclosure has been reviewed by Leo O’ Shaughnessy (Chief Financial Officer) and the production, exploration and permitting components by Roland Phelps (President & CEO), qualified persons under the meaning of NI. 43-101. The information is based upon local production and financial data prepared under their supervision.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including anticipated production and development projections, for the Omagh Gold project. Forward-looking statements are based on estimates and assumptions made by Galantas in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Galantas believes are appropriate in the circumstances. Many factors could cause Galantas’ actual results, the performance or achievements to differ materially from those expressed or implied by the forward looking statements or strategy, including: gold price volatility; discrepancies between actual and estimated production, actual and estimated metallurgical recoveries and throughputs; mining operational risk, geological uncertainties; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign involvement; speculative nature of gold exploration; dilution; competition; loss of or availability of key employees; additional funding requirements; uncertainties regarding planning and other permitting issues; and defective title to mineral claims or property. These factors and others that could affect Galantas’s forward-looking statements are discussed in greater detail in the section entitled “Risk Factors” in Galantas’ Management Discussion & Analysis of the financial statements of Galantas and elsewhere in documents filed from time to time with the Canadian provincial securities regulators and other regulatory authorities. These factors should be considered carefully, and persons reviewing this press release should not place undue reliance on forward-looking statements. Galantas has no intention and undertakes no obligation to update or revise any forward-looking statements in this press release, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Enquiries
Galantas Gold Corporation
Jack Gunter P.Eng – Chairman
Roland Phelps C.Eng – President & CEO
Email: info@galantas.com
Website: www.galantas.com
Telephone: +44 (0) 2882 241100
Grant Thornton UK LLP (Nomad)
Philip Secrett, Richard Tonthat.
Telephone: +44(0)20 7383 5100
Whitman Howard Ltd (Broker & Corporate Adviser)
Ranald McGregor-Smith, Nick Lovering
Telephone: +44(0)20 7659 1234