Galantas Report Financial Results For The Quarter Ended March 31, 2021
TORONTO, May 28, 2021 (GLOBE NEWSWIRE) -- Galantas Gold Corporation (the ‘Company’) is pleased to announce its unaudited financial results for the Quarter ended March 31, 2021.
Financial Highlights
Highlights of the first quarter 2021 results, which are expressed in Canadian Dollars, are summarized below:
| All figures denominated in Canadian Dollars (CDN$) | Quarter Ended March 31 | |||||
| 2021 | 2020 | |||||
| Revenue | $ 0 | $ 0 | ||||
| Cost and expenses of operations | $ (46,148) | $ (35,836) | ||||
| Loss before the undernoted | $ (46,148) | $ (35,836) | ||||
| Depreciation | $ (72,065) | $ (88,727) | ||||
| General administrative expenses | $ (505,097) | $ (656,768) | ||||
| Foreign exchange (loss) gain | $ (16,653) | $ 101,016 | ||||
| Net (Loss) for the quarter | $ (639,963) | $ (680,315) | ||||
| Working Capital Deficit | $ (8,532,943) | $ (7,299,380) | ||||
| Cash loss from operating activities before changes in non-cash working capital | $ (296,161) | $ (348,899) | ||||
| Cash at March 31, 2021 | $ 487,193 | $ 936,560 | ||||
Sales revenue for the quarter ended March 31, 2021 amounted to $ Nil compared to revenue of $ Nil for the quarter ended March 31, 2020. Shipments of concentrate commenced during the third quarter of 2019. Concentrate sales provisional revenues totalled US$ 567,000 for the first quarter of 2021 compared to US $ 186,000 for the first quarter of 2020. Until the mine commences commercial production, the net proceeds from concentrate sales are being offset against development assets.
The Net Loss for the quarter ended March 31, 2021 amounted to $ 639,963 (2020: $ 680,315) and the cash outflow from operating activities before changes in non-cash working capital for the quarter ended March 31, 2021 amounted to $ 296,161 (2020: $ 348,899).
The Company had a cash balance of $ 487,193 at March 31, 2021 compared to $ 936,560 at March 31, 2020. The working capital deficit at March 31, 2021 amounted to $ 8,532,943 compared to a working capital deficit of $ 7,299,380 at March 31, 2020.
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 March 2020 and following UK government guidelines regarding Covid-19, processing operations temporarily ceased until May when the Company announced that concentrate processing had 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.
On February 3, 2021 the Company announced that a formal agreement regarding blasting was reached between the Company’s operating subsidiary and the Police Service of Northern Ireland (PSNI). The PSNI have responsibilities regarding the supervision of the use of blasting materials in Northern Ireland.
The agreement provides the potential for a materially improved economic arrangement for an expansion of underground blasting, required for full production, to take place at the Omagh Mine. The agreement has followed a comprehensive review by the PSNI and regulators.
On March 12, 2021 the Company announced that limited blasting underground had re-commenced. Development mining of the Kearney gold vein has re-started on a single shift basis. It is expected to produce a feed of higher gold grade for the processing plant than the current feed, which comes from low grade stock.
Total concentrate production is expected to rise, driven by an expected higher feed grade. During the period of suspension of blasting operations at the mine, key mining skill sets were preserved by the incorporation of personnel within process plant operations.
The limited re-start was being carried out within limited cash resources, using a single existing equipment suite, which was fully operational.
On April 16, 2021, the Company provided an operational update for the operating mine.
Underground blasting (as reported March 12, 2021) continued with mining on a single shift basis. As expected, development of the Kearney vein has produced a feed of higher gold grade for the processing plant than the existing feed, which comes from low grade stock.
Until the mine reaches the commencement of commercial production, the net proceeds from concentrate sales will be offset against development assets.
Financing and New Appointments
On April 21, 2021, the Company announced a Private Placement to provide sufficient funding to take the mine into full production.
On May 18, 2021 the Company announced the closing of its oversubscribed Private Placement to fund the mine to full production and accelerate exploration plans to expand the high-grade gold resources.
In connection with closing, Roland Phelps has retired as Galantas’ President and Chief Executive Officer and as a member of the Board of Directors. His role as CEO has been assumed by Mario Stifano, an experienced mining executive who has raised significant capital for a number of mining and resource companies in exploration, development and production such as Lake Shore Gold Corp. (now part of Pan American Silver Corp.).
The Company has appointed Brendan Morris as Chief Operating Officer in a non-board role. Mr. Morris is a chartered mining engineer with more than 40 years of experience in mining and quarrying in Ireland, United Kingdom, United Arab Emirates and Canada. He has more than 25 years of practical experience in management, in both mining and technical services roles, supplemented by a degree in Mining Engineering and a MSc in Business Practice. He is currently Managing Director of Lisheen Technical and Mining Services, providing consultancy and mining services.
The Board of Galantas has appointed Brent Omland to the Board of Directors, subject to regulatory approval. Mr. Omland is a Canadian Chartered Accountant with 15 years’ experience in the mining, metals and trading sectors. He has held roles with Ivernia Inc., Enirgi Metals Group and Teck. He is currently Chief Financial Officer of Ocean Partners. Mario Stifano has also been appointed to the Board of Directors, subject to regulatory approval.
Ron Alexander has stepped down from the Board following many years of valued service. The Board and management are grateful for his contribution.
Roland Phelps commented: “I am pleased to leave Galantas in good hands. The new capital and leadership will allow the true potential of this exciting property to be realized. I will continue to provide consulting services to management and the Board to ensure a smooth transition.”
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 and permitting components by Brendan Morris (COO), 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
Mario Stifano – CEO
Email: info@galantas.com
Website: www.galantas.com
Telephone: 001 416 453 8433
Grant Thornton UK LLP (Nomad)
Philip Secrett, Harrison Clarke, George Grainger:
Telephone: +44(0)20 7383 5100
Panmure Gordon & Co (AIM Broker & Corporate Adviser)
Nick Lovering, Hugh Rich:
Telephone: +44(0)20 7659 1234