Galantas Report Annual Financial Results for the Year Ended December 31, 2020
TORONTO, April 28, 2021 (GLOBE NEWSWIRE) -- Galantas Gold Corporation (the ‘Company’) is pleased to announce its audited annual financial results for the year ended December 31, 2020.
A copy of the Financial Statements and Management Discussion and Analysis will be sent to shareholders in due course and are available on the Company’s website at www.galantas.com/investors.
Financial Highlights
Highlights of the 2020 audited annual results, which are expressed in Canadian Dollars, are summarized below:
| All figures denominated in Canadian Dollars (CDN$) | Year Ended December 31 | |||||
| 2020 | 2019 | |||||
| Revenue | $ | 0 | $ | 5,788 | ||
| Cost and expenses of operations | $ | (127,868 | ) | $ | (221,691 | ) |
| Loss before the undernoted | $ | (127,868 | ) | $ | (215,903 | ) |
| Depreciation | $ | (355,196 | ) | $ | (457,134 | ) |
| General administrative expenses | $ | (2,605,277 | ) | $ | (2,690,952 | ) |
| Foreign exchange (loss) | $ | (92,621 | ) | $ | (16,659 | ) |
| Impairment of Exploration and Evaluation Assets | $ | (47,490 | ) | $ | (155,482 | ) |
| Loss on disposal of property, plant and equipment | $ | 0 | $ | (28,479 | ) | |
| Net Loss for the year | $ | (3,228,452 | ) | $ | (3,564,609 | ) |
| Working Capital Deficit | $ | (7,710,084 | ) | $ | (6,093,200 | ) |
| Cash loss from operating activities before changes in non-cash working capital | $ | (1,249,659 | ) | $ | (1,826,066 | ) |
| Cash at December 31, 2020 | $ | 612,094 | $ | 1,913,420 | ||
Sales revenue for the year ended December 31, 2020 amounted to $ Nil compared to revenue of $5,788 for the year ended December 31, 2019, which consisted of jewelry sales. Shipments of concentrate commenced during the third quarter of 2019. Provisional concentrate sales totalled US$ 1,355,000 for 2020 compared to US $ 1,518,000 for the year 2019. However, until the mine commences commercial production, the net proceeds from concentrate sales are being offset against development assets.
The Net Loss for the year ended December 31, 2020 amounted to $ 3,228,452 (2019: $3,564,609) and the cash outflow from operating activities before changes in non-cash working capital for the year ended December 31, 2020 amounted to $1,249,659 (2019: $1,826,066).
The Company had a cash balance of $612,094 at December 31, 2020 compared to $ 1,913,420 at December 31, 2019. The working capital deficit at December 31, 2019 amounted to $ 7,710,084 compared to a working capital deficit of $6,093,200 at December 31, 2019.
Production/Mine Development
Certain underground work continued during 2020. The processing plant operated on a limited basis with feedstock for the plant being from low grade stock. In the fourth quarter of 2019 there was a temporary suspension of blasting operations at the mine due mainly to the blasting arrangement limitations imposed by the PSNI, which arrangements were not sufficient to allow for the expansion of mine operations. The Company has been working with the PSNI on an ongoing basis to agree arrangements that would increase blasting availability to normal levels for an underground mine. During the second quarter the company reported that confirmation had been received from PSNI, regarding their satisfaction of certain secure storage and handling protocols required for an increase in blasting to a commercial level subject to financial matters being agreed. These financial matters have now been mutually agreed and, following a formal agreement, a limited re-start of underground blasting commenced late in the first quarter of 2021 and was announced March 12, 2021.
Following the suspension of blasting operations at the mine, the processing plant continued to operate on a limited basis from low grade stock. In March 2020 and following UK government guidelines regarding Covid-19, processing operations temporarily ceased until May when the Company announced that concentrate processing has recommenced. The company carried out maintenance to the processing plant during the milling suspension, to minimise future maintenance interruptions. The restart followed a review of Northern Ireland / UK government health advice regarding Covid-19, a risk assessment and the introduction of appropriate modifications to working practices.
Until the mine reaches the commencement of commercial production, the net proceeds from concentrate sales will be offset against development assets.
During 2020, the Company sought strategic alternatives including reviewing its licenses and operations; and considering the possibility of engaging in a sale, joint venture, partnership or other options with third parties and alternative financing structures. On April 19, 2021, the Company announced a proposed Private Placing to provide sufficient funding to take the mine into full production.
Safety is a high priority and the company continued to invest in safety-related training and infrastructure. The zero lost time accident rate since the start of underground operations continues. Environmental monitoring demonstrates a high level of regulatory compliance.
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.
Qualified Person
The financial components of this disclosure has been reviewed by Alan Buckley (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 revenues and cost estimates, 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.
Information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Enquiries
Galantas Gold Corporation
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, Harrison Clarke:
Telephone: +44(0)20 7383 5100
Premier Gordon & Co (AIM Broker & Corporate Adviser)
Nick Lovering, Hugh Rich:
Telephone: +44(0)20 7659 1234