Galane Gold Ltd. Announces Satisfaction of Conditions Precedent of Loan Facility

TORONTO, Sept. 17, 2018 (GLOBE NEWSWIRE) -- Galane Gold Ltd. (“Galane Gold” or the “Company”) (TSXV: GG; OTCQB:GGGOF) is pleased to announce that the Company has satisfied the majority of the various conditions precedent required under its previously announced US$5,000,000 secured loan facility with Barak Fund SPC Limited. The remaining substantive conditions precedent to the effectiveness of the loan agreement are for the Company to raise a minimum of US$2,000,000 of equity, and the execution and delivery of a three year offtake agreement, which is well advanced and should be completed by the end of September. The proceeds of the loan facility and of the equity issue will allow the company to restart the Galaxy mine. 

Accordingly, the Company is pleased to announce a non-brokered private placement (the “Private Placement”) of up to 54,000,000 units (the “Units”) at a price of C$0.05 per Unit for aggregate gross proceeds of up to C$2,700,000. Each Unit will be comprised of one common share of the Company (each, a “Common Share”) and one common share purchase warrant (each, a “Warrant”), with each Warrant entitling the holder thereof to acquire one Common Share at an exercise price of C$0.05 for a period of 24 months from the date of closing. The expiry date of the Warrants can be accelerated by the Company to the date that is 10 business days after the date where the closing price of the Common Shares on the TSX Venture Exchange is higher than C$0.20 for 10 consecutive trading days, provided such trading days occur four months and one day after the issuance of the Warrants.

Galane Gold expects to complete the Private Placement on or about September 24, 2018. 

Galane Gold CEO, Nick Brodie commented: ”It is exciting to think that we are now very close to the recommencement of operations at Galaxy. A mine that has historically produced over 1.2 million ounces and was where gold was first commercially mined in South Africa.⁽¹⁾

With completion of the funding expected by the end of September we are aiming to be in production by the end of the first quarter of 2019.⁽²⁾ Steady state annual production is targeted to be on average 25,000 ounces of gold at cash cost per ounce of less than US$800.⁽³⁾⁽⁴⁾ 

The total capital cost to restart operations is forecast to be approximately US$5 million which includes the upgrading of the crush, mill and float circuits to 30,000 tonnes per annum and development required to restart underground mining at the Galaxy and Princeton ore bodies. The remaining funds available will cover working capital costs to be incurred on recommencement of mining and processing. This represents only the first step of our resurrection of the Galaxy mine and we will shortly commence a study with the aim being to double production and lower the all in cost as a result of increased economies of scale.⁽²⁾”

Pursuant to applicable securities laws, the Common Shares and Warrants comprising the Units, and the Common Shares underlying the Warrants, will be subject to a hold period until four months and one day after closing. The Private Placement remains subject to the approval of the TSX Venture Exchange.

It is expected that certain insiders of the Company may participate in the Private Placement. Any issuance of Units to insiders pursuant to the Private Placement would be considered a related party transaction within the meaning of  Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company intends to rely upon exemptions from the formal valuation and minority approval requirements in sections 5.5(b) and 5.7(b) of MI 61-101.

About Galane Gold

Galane Gold is an un-hedged gold producer and explorer with mining operations and exploration tenements in Botswana and South Africa. Galane Gold is a public company and its shares are quoted on the TSXV under the symbol “GG” and on the OTCQB under the symbol “GGGOF”.  Galane Gold’s management team is comprised of senior mining professionals with extensive experience in managing mining and processing operations and large-scale exploration programmes. 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

Certain statements contained in this press release constitute “forward-looking statements”, including timing for first production at Galaxy and increasing capacity at the processing plant. All statements other than statements of historical fact contained in this press release, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements.

Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to: the Company’s dependence on two mineral projects; gold price volatility; risks associated with the conduct of the Company’s mining activities in Botswana and South Africa; regulatory, consent or permitting delays; risks relating to the Company’s exploration, development, plant expansion and mining activities being situated in Botswana and South Africa; risks relating to reliance on the Company’s management team and outside contractors; risks regarding mineral resources and reserves; the Company’s inability to obtain insurance to cover all risks, on a commercially reasonable basis or at all; currency fluctuations; risks regarding the failure to generate sufficient cash flow from operations; risks relating to project financing and equity issuances; risks arising from the Company’s fair value estimates with respect to the carrying amount of mineral interests; mining tax regimes; risks arising from holding derivative instruments; the Company’s need to replace reserves depleted by production; risks and unknowns inherent in all mining projects, including the inaccuracy of reserves and resources, metallurgical recoveries and capital and operating costs of such projects; contests over title to properties, particularly title to undeveloped properties; laws and regulations governing the environment, health and safety; operating or technical difficulties in connection with mining or development activities; lack of infrastructure; employee relations, labour unrest or unavailability; health risks in Africa; the Company’s interactions with surrounding communities and artisanal miners; the Company’s ability to successfully integrate acquired assets; risks related to restarting production; the speculative nature of exploration and development, including the risks of diminishing quantities or grades of reserves; development of the Company’s exploration properties into commercially viable mines; stock market volatility; conflicts of interest among certain directors and officers; lack of liquidity for shareholders of the Company; risks related to the market perception of junior gold companies; and litigation risk. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives and cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.

Information of a technical and scientific nature that forms the basis of the disclosure in the press release has been approved by Charles Byron Pr. Sci. Nat., MAusIMM., MGSSA and Chief Geologist for Galane Gold, and a “qualified person” as defined by National Instrument 43-101.

Neither the TSXV nor its regulation services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

For further information please contact:
Nick Brodie
CEO, Galane Gold Ltd.
+ 44 7905089878
Nick.Brodie@GalaneGold.com 
www.GalaneGold.com