REG - Galantas Gold Corp - RESULTS FOR THE QUARTER ENDED MARCH 31, 2025
29/05/2025 07:00
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RNS Number : 5015K Galantas Gold Corporation 29 May 2025
GALANTAS GOLD CORPORATION
TSXV & AIM: Symbol GAL
GALANTAS REPORT FINANCIAL RESULTS FOR THE QUARTER ENDED MARCH 31, 2025
May 29, 2025: Galantas Gold Corporation (the 'Company') is pleased to
announce its unaudited financial results for the Quarter ended March 31, 2025.
Financial Highlights
Highlights of the first quarter 2025 results, which are expressed in Canadian
Dollars, are summarized below:
All figures denominated in Canadian Dollars (CDN$)
Quarter Ended
March 31
2025 2024
Revenue $ 0 $ 0
Cost and expenses of operations $ (14,935) $ (17,332)
Loss before the undernoted $ (14,935) $ (17,332)
Depreciation $ (89,792) $ (106,226)
General administrative expenses $ (1,087,488) $ (1,173,035)
Foreign exchange gain (loss) $ 243,500 $ 119,127
Unrealized gain / (loss) on derivative fair value adjustment $ 365,290 $ (523,850)
Net (Loss) for the quarter $ (1,225,116) $ (653,616)
Working Capital Deficit $ (17,274,760) $ (11,290,856)
Cash loss from operating activities before changes in non-cash working capital $ (51,250) $ (495,610)
Cash at March 31, 2025 $ 729,387 $ 1,288,200
Sales revenue for the quarter ended March 31, 2025 amounted to $ Nil compared
to revenue of $ Nil for the quarter ended March 31, 2024. Shipments of
concentrate commenced during the third quarter of 2019. Concentrate sales
provisional revenues totalled US$ Nil for the first quarter of 2025 compared
to US $ 207,000 for the first quarter of 2024. 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, 2025 amounted to $ 1,225,116
(2024: $ 653,616) and the cash outflow from operating activities before
changes in non-cash working capital for the quarter ended March 31, 2025
amounted to $51,250 (2024: $432,610).
The Company had a cash balance of $729,387 at March 31, 2025 compared to
$1,288,200 at March 31, 2024. The working capital deficit at March 31, 2025
amounted to $17,274,760 compared to a working capital deficit of $11,290,856
at March 31, 2024.
Safety is a high priority for the Company and we continue 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 (http://www.sedar.com) and www.galantas.com
(http://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.
Click on, or paste the following link into your web browser, to view the
associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/5015K_1-2025-5-28.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5015K_1-2025-5-28.pdf)
Qualified Person
The financial components of this disclosure have been reviewed by Alan Buckley
(Chief Financial Officer), the exploration and geological components by Sarah
Coulter 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.
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. 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 (mailto:info@galantas.com)
Website: www.galantas.com (http://www.galantas.com/)
Telephone: 001 416 453 8433
Grant Thornton UK LLP (Nomad)
Philip Secrett, Harrison Clarke, Elliot
Peters:
Telephone: +44(0)20 7383 5100
SP Angel Corporate Finance LLP (AIM Broker)
David Hignell, Charlie Bouverat (Corporate Finance)
Grant Barker (Sales and Broking)
Telephone: +44(0)20 3470 0470
GALANTAS GOLD CORPORATION
Condensed Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended March 31, 2025
NOTICE TO READER
The accompanying unaudited condensed interim consolidated financial statements
of Galantas Gold Corporation (the "Company") have been prepared by and are the
responsibility of management. The unaudited condensed interim consolidated
financial statements have not been reviewed by the Company's auditors.
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
(Unaudited)
As at As at
March 31, December 31,
2025 2024
ASSETS
Current assets
Cash and cash equivalents $ 729,387 $ 525,643
Accounts receivable and prepaid expenses (note 4) 395,844 364,362
Inventories (note 5) 478,203 213,644
Total current assets 1,603,434 1,103,649
Non-current assets
Property, plant and equipment (note 6) 29,920,991 28,946,456
Long-term deposit (note 8) 557,130 540,870
Exploration and evaluation assets (note 7) 5,653,061 5,487,196
Total non-current assets 36,131,182 34,974,522
Total assets $ 37,734,616 $ 36,078,171
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities (notes 9 and 16) $ 3,361,314 $ 3,437,002
Due to related parties (note 14) 15,516,880 13,885,635
Total current liabilities 18,878,194 17,322,637
Non-current liabilities
Decommissioning liability (note 8) 689,086 666,128
Convertible debenture (note 10) 7,005,788 6,556,155
Derivative liability (note 10) 488,832 123,542
Total non-current liabilities 8,183,706 7,345,825
Total liabilities 27,061,900 24,668,462
Equity
Share capital (note 11(a)(b)) 71,782,203 71,782,203
Reserves 20,636,623 20,148,500
Deficit (81,746,110 ) (80,520,994 )
Total equity 10,672,716 11,409,709
Total equity and liabilities $ 37,734,616 $ 36,078,171
The notes to the unaudited condensed interim consolidated financial statements
are an integral part of these statements.
Incorporation and nature of operations (note 1)
Going concern (note 2)
Contingency (note 16)
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended
March 31,
2025 2024
Revenues
Sales of concentrate (note 13) $ - $ -
Cost and expenses of operations 14,935
Cost of sales 17,332
Depreciation (note 6) 89,792 106,226
104,727 123,558
Loss before general administrative and other expense (income) (104,727 ) (123,558 )
General administrative expenses
Management and administration wages (note 14) 129,782 110,932
Other operating expenses 31,016 34,910
Accounting and corporate 17,866 28,528
Legal and audit 28,684 32,949
Stock-based compensation (notes 11(d) and 14) 71,473 29,814
Shareholder communication and investor relations 59,221 123,536
Transfer agent 3,584 21,265
Director fees (note 14) 35,000 35,000
General office 7,774 22,960
Accretion expenses (notes 8, 10 and 14) 203,151 293,275
Loan interest and bank charges less deposit interest (notes 10 and 14) 499,937 439,866
1,087,488 1,173,035
Other expense (income)
Foreign exchange loss (243,500 ) (119,127 )
Unrealized gain (loss) on derivative fair value adjustment (note 10) 365,290 (523,850 )
Write-up of prepaid expenses (note 4) (88,889 ) -
32,901 (642,977 )
Net loss for the period $ (1,225,116 ) $ (653,616 )
Basic and diluted net loss per share (note 12) $ (0.01 ) $ (0.01 )
Weighted average number of common shares outstanding - basic and diluted (note 114,770,587 114,732,865
12)
The notes to the unaudited condensed interim consolidated financial statements
are an integral part of these statements.
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Comprehensive Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended
March 31,
2025 2024
Net loss for the period $ (1,225,116 ) $ (653,616 )
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations 416,650 77,334
Total comprehensive loss $ (808,466 ) $ (576,282 )
The notes to the unaudited condensed interim consolidated financial statements
are an integral part of these statements.
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended
March 31,
2025 2024
Operating activities
Net loss for the period $ (1,225,116 ) $ (653,616 )
Adjustment for:
Depreciation (note 6) 89,792 106,226
Stock-based compensation (note 11(d)) 71,473 29,814
Accrued interest (notes 10 and 14) 675,131 423,051
Foreign exchange gain (128,471 ) (170,510 )
Accretion expenses (notes 8, 10 and 14) 203,151 293,275
Unrealized gain (loss) on derivative fair value adjustment (note 10) 365,290 (523,850 )
Non-cash working capital items:
Accounts receivable and prepaid expenses (22,348 ) 49,870
Inventories (264,559 ) (108,094 )
Accounts payable and other liabilities (253,301 ) (272,994 )
Net cash and cash equivalents used in operating activities (488,958 ) (826,828 )
Investing activities
Net purchase of property, plant and equipment (204,606 ) (532,574 )
Exploration and evaluation assets (52,743 ) (134,653 )
Net cash and cash equivalents used in investing activities (257,349 ) (667,227 )
Financing activities
Advances from related parties 931,474 169,852
Net cash and cash equivalents provided by financing activities 931,474 169,852
Net change in cash and cash equivalents 185,167 (1,324,203 )
Effect of exchange rate changes on cash held in foreign currencies 18,577 19,138
Cash and cash equivalents, beginning of period 525,643 2,593,265
Cash and cash equivalents, end of period $ 729,387 $ 1,288,200
Cash $ 729,387 $ 1,288,200
Cash equivalents - -
Cash and cash equivalents $ 729,387 $ 1,288,200
The notes to the unaudited condensed interim consolidated financial statements
are an integral part of these statements.
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Changes in Equity
(Expressed in Canadian Dollars)
(Unaudited)
Reserves
Equity settled Foreign
share-based currency
Share Warrants payments translation
capital reserve reserve reserve Deficit Total
Balance, December 31, 2023 $ 71,809,999 $ 3,546,313 $ 14,345,538 $ 687,616 $ (79,032,310 ) $ 11,357,156
Shares cancelled (110,200 ) - - - - (110,200 )
Stock-based compensation (note 11(d)) - - 29,814 - - 29,814
Exchange differences on translating - - - 77,334 - 77,334
foreign operations
Net loss for the period - - - - (653,616 ) (653,616 )
Balance, March 31, 2024 $ 71,699,799 $ 3,546,313 $ 14,375,352 $ 764,950 $ (79,685,926 ) $ 10,700,488
Balance, December 31, 2024 $ 71,782,203 $ 3,401,849 $ 14,921,992 $ 1,824,659 $ (80,520,994 ) $ 11,409,709
Stock-based compensation (note 11(d)) - - 71,473 - - 71,473
Warrants expired - (1,767,545 ) 1,767,545 - - -
Exchange differences on translating - - - 416,650 - 416,650
foreign operations
Net loss for the period - - - - (1,225,116 ) (1,225,116 )
Balance, March 31, 2025 $ 71,782,203 $ 1,634,304 $ 16,761,010 $ 2,241,309 $ (81,746,110 ) $ 10,672,716
The notes to the unaudited condensed interim consolidated financial statements
are an integral part of these statements.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2025
(Expressed in Canadian Dollars)
(Unaudited)
1. Incorporation and Nature of Operations
Galantas Gold Corporation (the "Company") was formed on September 20, 1996
under the name Montemor Resources Inc. on the amalgamation of 1169479 Ontario
Inc. and Consolidated Deer Creek Resources Limited. The name was changed to
European Gold Resources Inc. by articles of amendment dated July 25, 1997. On
May 5, 2004, the Company changed its name from European Gold Resources Inc. to
Galantas Gold Corporation. The Company was incorporated to explore for and
develop mineral resource properties, principally in Europe. In 1997, it
purchased all of the shares of Omagh Minerals Limited ("Omagh") which owns a
mineral property in Northern Ireland, including a delineated gold deposit.
Omagh obtained full planning and environmental consents necessary to bring its
property into production.
The Company entered into an agreement on April 17, 2000, approved by
shareholders on June 26, 2000, whereby Cavanacaw Corporation ("Cavanacaw"), a
private Ontario corporation, acquired Omagh. Cavanacaw has established an open
pit mine to extract the Company's gold deposit near Omagh, Northern Ireland.
Cavanacaw also has developed a premium jewellery business founded on the gold
produced under the name Galántas Irish Gold Limited ("Galántas"). As at July
1, 2007, the Company's Omagh mine began production and in 2013 production was
suspended. On April 1, 2014, Galántas amalgamated its jewelry business with
Omagh.
On April 8, 2014, Cavanacaw acquired Flintridge Resources Limited
("Flintridge"). Following a strategic review of its business by the Company
during 2014 certain assets owned by Omagh were acquired by Flintridge.
On November 16, 2023, Gairloch Resources Limited ("Gairloch") was
incorporated.
The Company's operations include the consolidated results of Gairloch,
Cavanacaw, and its wholly-owned subsidiaries Omagh, Galántas and Flintridge.
The Company's common shares are listed on the TSX Venture Exchange ("TSXV")
and London Stock Exchange AIM under the symbol GAL. On September 1, 2021, the
Company's common shares started trading under the symbol GALKF on the OTCQX in
the United States. The primary office is located at The Canadian Venture
Building, 82 Richmond Street East, Toronto, Ontario, Canada, M5C 1P1.
2. Going Concern
These unaudited condensed interim consolidated financial statements have been
prepared on a going concern basis which contemplates that the Company will be
able to realize assets and discharge liabilities in the normal course of
business. In assessing whether the going concern assumption is appropriate,
management takes into account all available information about the future,
which is at least, but is not limited to, twelve months from the end of the
reporting period. Management is aware, in making its assessment, of
uncertainties related to events or conditions that may cast doubt on the
Company's ability to continue as a going concern. The Company's future
viability depends on the consolidated results of the Company's wholly-owned
subsidiaries Gairloch Gairloch incorporated on November 16, 2023 and
Cavanacaw. Cavanacaw has a 100% shareholding in Galántas, Flintridge who are
engaged in the acquisition, exploration and development of gold properties,
mainly in Omagh, Northern Ireland and Omagh who is engaged in the exploration
of gold properties, mainly in the Republic of Ireland. The Omagh mine is an
open pit mine, which was in production until 2013 when production was
suspended and is reported as property, plant and equipment and as an
underground mine which having established technical feasibility and commercial
viability in December 2018 has resulted in associated exploration and
evaluation assets being reclassified as an intangible development asset and
reported as property, plant and equipment.
The going concern assumption is dependent on forecast cash flows being met,
further financing negotiations being completed successfully. Management'
assumptions in relation to future financing, levels of production, gold prices
and mine operating costs are crucial to forecast cash flows being achieved.
Should production be significantly delayed, revenues fall short of
expectations or operating costs and capital costs increase significantly,
there may be insufficient cash flows to sustain day to day operations without
seeking further financing.
Based on the financial projections which have been prepared for a five-year
period and using assumptions which management believes to be prudent,
alongside ongoing negotiations with both current and prospective investors and
creditors, management believes it is appropriate to prepare the unaudited
condensed interim consolidated financial statements on the going concern
basis.
Should the Company be unsuccessful in securing the above, there would be
significant uncertainty over the Company's ability to continue as a going
concern. The unaudited condensed interim consolidated financial statements do
not include any adjustments that would result if forecast cash flows were not
achieved, if the existing creditors withdrew their support or if further
financing could not be raised from current or potential investors.
During the year ended December 31, 2024, the Company raised gross proceeds of
$1.1M through loans from related parties.
As at March 31, 2025, the Company had a deficit of $81,746,110 (December 31,
2024 - $80,520,994). Comprehensive loss for the three months ended March 31,
2025 was $808,466 (three months ended March 31, 2024 - $576,282). These
conditions raise material uncertainties which may cast significant doubt as to
whether the Company will be able to continue as a going concern. However,
management believes that it will continue as a going concern. However, this is
subject to a number of uncertainties detailed above. These unaudited condensed
interim consolidated financial statements do not reflect adjustments to the
carrying values of assets and liabilities, the reported expenses and financial
position classifications used that would be necessary if the going concern
assumption was not appropriate. These adjustments could be material.
3. Basis of Preparation
Statement of compliance
The Company applies International Financial Reporting Standards ("IFRS") as
issued by the International Accounting Standards Board and interpretations
issued by the International Financial Reporting Interpretations Committee
("IFRIC"). These unaudited condensed interim consolidated financial
statements have been prepared in accordance with International Accounting
Standard 34 - Interim Financial Reporting. Accordingly, they do not include
all of the information required for full annual financial statements.
The policies applied in these unaudited condensed interim consolidated
financial statements are based on IFRS issued and outstanding as of May 28,
2025 the date the Board of Directors approved the statements. The same
accounting policies and methods of computation are followed in these unaudited
condensed interim consolidated financial statements as compared with the most
recent annual consolidated financial statements as at and for the year ended
December 31, 2024. Any subsequent changes to IFRS that are given effect in the
Company's annual consolidated financial statements for the year ending
December 31, 2025 could result in restatement of these unaudited condensed
interim consolidated financial statements.
4. Accounts Receivable and Prepaid Expenses
As at As at
March 31, December 31,
2025 2024
Sales tax receivable - Canada $ 11,435 $ 13,225
Valued added tax receivable - Northern Ireland 38,416 61,414
Accounts receivable 72,241 69,806
Prepaid expenses 273,752 219,917
$ 395,844 $ 364,362
Prepaid expenses includes advances for consumables and for construction of the
passing bays in the Omagh mine. Prepaid expenses includes also $200,000
(December 31, 2024 - $111,111) pursuant to services agreement for the
underground development at the Omagh Gold Project. During the three months
ended March 31, 2025, prepaid expenses were written-up by $88,889 (three
months ended March 31, 2024 - $nil) to reflect anticipated value of associated
services to be received in future.
The following is an aged analysis of receivables:
As at As at
March 31, December 31,
2025 2024
Less than 3 months $ 49,851 $ 101,263
3 to 12 months 44,403 20,173
More than 12 months 27,838 23,009
Total accounts receivable $ 122,092 $ 144,445
5. Inventories
As at As at
March 31, December 31,
2025 2024
Concentrate inventories $ 478,203 $ 213,644
6. Property, Plant and Equipment
Freehold Plant
land and and Motor Office Development Assets under
Cost buildings machinery vehicles equipment assets construction Total
Balance, December 31, 2023 $ 2,323,111 $ 8,995,926 $ 227,835 $ 222,845 $ 20,640,066 $ 26,939 $ 32,436,722
Additions - - - - 2,555,601 - 2,555,601
Transfer - 28,928 - - - (28,928 ) -
Cash receipts from concentrate sales - - - - (1,228,232 ) - (1,228,232 )
Reversal of impairment - - - - 3,250,867 - 3,250,867
Foreign exchange adjustment 164,468 634,400 16,130 15,776 1,548,305 1,989 2,381,068
Balance, December 31, 2024 2,487,579 9,659,254 243,965 238,621 26,766,607 - 39,396,026
Additions - - - - 204,606 - 204,606
Foreign exchange adjustment 74,782 289,366 7,334 7,174 796,635 - 1,175,291
Balance, March 31, 2025 $ 2,562,361 $ 9,948,620 $ 251,299 $ 245,795 $ 27,767,848 $ - $ 40,775,923
Accumulated depreciation
Balance, December 31, 2023 $ 1,939,409 $ 7,061,856 $ 181,541 $ 159,745 $ - $ - $ 9,342,551
Depreciation 3,298 407,802 13,975 9,837 - - 434,912
Foreign exchange adjustment 137,399 509,830 13,272 11,606 - - 672,107
Balance, December 31, 2024 2,080,106 7,979,488 208,788 181,188 - - 10,449,570
Depreciation 682 84,242 2,707 2,161 - - 89,792
Foreign exchange adjustment 62,553 241,161 6,351 5,505 - - 315,570
Balance, March 31, 2025 $ 2,143,341 $ 8,304,891 $ 217,846 $ 188,854 $ - $ - $ 10,854,932
Carrying value
Balance, December 31, 2024 $ 407,473 $ 1,679,766 $ 35,177 $ 57,433 $ 26,766,607 $ - $ 28,946,456
Balance, March 31, 2025 $ 419,020 $ 1,643,729 $ 33,453 $ 56,941 $ 27,767,848 $ - $ 29,920,991
7. Exploration and Evaluation Assets
Acquisition Exploration
Cost costs costs Total
Balance, December 31, 2023 $ 1,140,115 $ 3,636,294 $ 4,776,409
Additions - 481,338 481,338
Foreign exchange adjustment - 229,449 229,449
Balance, December 31, 2024 1,140,115 4,347,081 5,487,196
Additions - 52,743 52,743
Foreign exchange adjustment - 113,122 113,122
Balance, March 31, 2025 $ 1,140,115 $ 4,512,946 $ 5,653,061
Carrying value
Balance, December 31, 2024 $ 1,140,115 $ 4,347,081 $ 5,487,196
Balance, March 31, 2025 $ 1,140,115 $ 4,512,946 $ 5,653,061
8. Decommissioning Liability
The Company's decommissioning liability is a result of mining activities at
the Omagh mine in Northern Ireland. The Company estimated its decommissioning
liability at March 31, 2025 based on a risk-free discount rate of 1% (December
31, 2024 - 1%) and an inflation rate of 1.50% (December 31, 2024 - 1.50%). The
expected undiscounted future obligations allowing for inflation are GBP
330,000 and based on management's best estimate the decommissioning is
expected to occur over the next 5 to 10 years. On March 31, 2025, the
estimated fair value of the liability is $689,086 (December 31, 2024 -
$666,128). Changes in the provision during the three months ended March 31,
2025 are as follows:
As at As at
March 31, December 31,
2025 2024
Decommissioning liability, beginning of period $ 666,128 $ 611,452
Accretion 2,855 11,056
Foreign exchange 20,103 43,620
Decommissioning liability, end of period $ 689,086 $ 666,128
As required by the Crown in Northern Ireland, the Company is required to
provide a bond for reclamation related to the Omagh mine in the amount of GBP
300,000 (December 31, 2024 - GBP 300,000), of which GBP 300,000 was funded
as of March 31, 2025 (GBP 300,000 was funded as of December 31, 2024) and
reported as long-term deposit of $557,130 (December 31, 2024 - $540,870).
9. Accounts Payable and Other Liabilities
Accounts payable and other liabilities of the Company are principally
comprised of amounts outstanding for purchases relating to exploration costs
on exploration and evaluation assets, general operating activities and
professional fees activities.
As at As at
March 31, December 31,
2025 2024
Accounts payable $ 2,122,190 $ 2,015,836
Accrued liabilities 1,239,124 1,421,166
Total accounts payable and other liabilities $ 3,361,314 $ 3,437,002
The following is an aged analysis of the accounts payable and other
liabilities:
As at As at
March 31, December 31,
2025 2024
Less than 3 months $ 509,479 $ 496,691
3 to 12 months 531,716 555,504
12 to 24 months 968,239 1,304,549
More than 24 months (see also note 16) 1,351,880 1,080,258
Total accounts payable and other liabilities $ 3,361,314 $ 3,437,002
10. Convertible Debentures
(i) On December 20, 2023, the Company closed a $3,502,054 (US$ 2,627,000)
convertible debenture. The convertible debenture is unsecured, is for a term
of three year commencing on the date that it is issued, carries a coupon of
10% per annum and is convertible into common shares of the Company. Each
debenture consists of US$1,000 principal amount of unsecured convertible
debentures. The convertible debentures have a term of 36 months from the date
of issuance with a conversion price of US$0.255 being the equivalent of a
conversion price of $0.35 per conversion share. A four month hold period will
apply to common shares converted through the convertible debenture. The hold
period expired on April 21, 2024.
In accordance with the terms of the convertible debentures, if, at any time
following the issuance of the convertible debentures, the closing price of the
common shares of the Company on the TSXV equals or exceeds $0.70 per common
share for 10 consecutive trading days or more, the Company may elect to
convert all but not less than all of the outstanding principal amount of the
convertible debentures into conversion shares at the conversion price, upon
giving the holders of the convertible debentures not less than 30 calendar
days advance written notice. On December 20, 2026, any outstanding principal
amount of convertible debentures plus any accrued and unpaid interest thereon
shall be repaid by the Company in cash.
Interest on the principal amount outstanding under each convertible debenture
shall accrue during the period commencing on December 20, 2023 until December
20, 2026 and shall be payable in cash on an annual basis on December 31st of
each year (each, an "Interest Payment Date"); provided, however, that the
first interest payment date shall be December 31, 2024. Each convertible
debenture shall bear interest at a minimum interest rate of 10% per annum (the
"Base Interest Rate"). During each interest period (an "Interest Period"),
being the period commencing on December 20, 2023 to but excluding the first
Interest Payment Date and thereafter the period from and including an Interest
Payment Date to but excluding the next Interest Payment Date or other
applicable payment date, the Base Interest Rate will be adjusted based on a
gold price of US$2,000 per ounce, with the Base Interest Rate being increased
by 1% per annum for each US$100 in which the average gold price for such
Interest Period exceeds US$2,000 per ounce, up to a maximum interest rate of
30% per annum; provided, however, that, without the prior acceptance of the
TSXV, the average interest rate shall not exceed 24% per annum during the term
of the convertible debentures. Any adjustment to the Base Interest Rate in
respect of an Interest Period shall be calculated based on the average gold
price quoted by the London Bullion Market Association, being the LBMA Gold
Price PM, in respect of the Interest Period ending on December 31, 2024, from
December 20, 2023 to and including December 15, 2024, and for each subsequent
Interest Period, from January 1st to and including December 15th of that year
or 15 days prior to the applicable payment date.
Melquart, an insider and control person of the Company (as defined by the
TSXV), subscribed for US$875,000. Ocean Partners, which has a common director
with the Company, acquired US$875,000 aggregate principal amount of
convertible debentures.
The Company paid a cash finder's fee of US$40,500 (CAD$53,990) and issued
158,823 non-transferable finder's warrants to Canaccord Genuity Corp. in
consideration for providing certain finder services to the Company under the
offering. Each finder warrant is exercisable to acquire one common share in
the capital of the Company at an exercise price of $0.35 per common share at
any time on or before December 20, 2026. The fair value of the 158,823 finder
warrants was estimated at $24,670 using the Black-Scholes option pricing model
with the following assumptions: expected dividend yield - 0%, expected
volatility - 107.02%, risk-free interest rate - 3.71% and an expected average
life of 3 years.
The debentures consist of the liability component and conversion feature. Due
to the convertible debenture being denominated in US$, the conversion feature
has been presented as a non-cash derivative liability.
On the date of issuance, the fair value of the derivative liability was
estimated to be $748,337 using the Black-Scholes option pricing model with the
following assumptions: expected dividend yield - 0%, expected volatility -
95.0%, risk-free interest rate - 3.94% and an expected average life of 3
years.
On issuance the fair value of the liability component was recorded at
$2,918,833, discounted at an effective interest rate of 37%.
The Company incurred transaction costs of $153,481 which was allocated
pro-rata on the value of the conversion feature and the liability component.
As at December 31, 2024, the fair value of the derivative liability was
revalued at $60,086 using the Black-Scholes option pricing model with the
following assumptions: expected dividend yield - 0%, expected volatility -
100%, risk-free interest rate - 2.92% and an expected average life of 1.97
years.
During the year ended December 31, 2024, the Company recorded accretion
expense of $389,379 and interest expense of $454,248 as loan interest and bank
charges less deposit interest in the unaudited condensed interim consolidated
statement of loss. During the year ended December 31, 2024, $151,301 of the
interest expense was related to the convertible debenture subscribed by
Melquart. During the year ended December 31, 2024, $151,301 of the interest
expense was related to the convertible debenture subscribed by Ocean Partners.
During the year ended December 31, 2024, $82,404 (US$60,000) of convertible
debenture was converted into 235,294 common shares of the Company.
During the year ended December 31, 2024, the Company paid interest of $157,422
(US$109,411).
As at March 31, 2025, the fair value of the derivative liability was revalued
at $237,748 using the Black-Scholes option pricing model with the following
assumptions: expected dividend yield - 0%, expected volatility - 117%,
risk-free interest rate - 2.47% and an expected average life of 1.72 years.
During the three months ended March 31, 2025, the Company recorded accretion
expense of $134,026 and interest expense of $119,735 as loan interest and bank
charges less deposit interest in the unaudited condensed interim consolidated
statement of loss. During the three months ended March 31, 2025, $39,881 of
the interest expense was related to the convertible debenture subscribed by
Melquart. During the three months ended March 31, 2025, $39,881 of the
interest expense was related to the convertible debenture subscribed by Ocean
Partners.
(ii) On February 5, 2024, the Company announced that it closed a debt
settlement transaction, pursuant to which the Company settled US$2,711,000 of
indebtedness owing to Ocean Partners through the issuance of US$2,711,000
aggregate principal amount of unsecured convertible debentures of the Company.
The convertible debenture issued in connection with the debt settlement were
issued on substantially the same terms as the unsecured convertible debentures
closed on December 20, 2023.
The debentures consist of the liability component and conversion feature. Due
to the convertible debenture being denominated in US$, the conversion feature
has been presented as a non-cash derivative liability.
On the date of issuance, the fair value of the derivative liability was
estimated to be $748,337 using the Black-Scholes option pricing model with the
following assumptions: expected dividend yield - 0%, expected volatility -
95.0%, risk-free interest rate - 4.28% and an expected average life of 2.87
years.
The fair value of the liability component was recorded at $2,918,833,
discounted at an effective interest rate of 20%.
As at December 31, 2024, the fair value of the derivative liability was
revalued at $63,456 using the Black-Scholes option pricing model with the
following assumptions: expected dividend yield - 0%, expected volatility -
100%, risk-free interest rate - 2.92% and an expected average life of 1.97
years.
During the year ended December 31, 2024, the Company recorded accretion
expense of $203,009 and interest expense of $482,978 as loan interest and bank
charges less deposit interest in the unaudited condensed interim consolidated
statement of loss.
As at March 31, 2025, the fair value of the derivative liability was revalued
at $251,084 using the Black-Scholes option pricing model with the following
assumptions: expected dividend yield - 0%, expected volatility - 117%,
risk-free interest rate - 2.47% and an expected average life of 1.72 years.
During the three months ended March 31, 2025, the Company recorded accretion
expense of $64,855 and interest expense of $136,179 as loan interest and bank
charges less deposit interest in the unaudited condensed interim consolidated
statement of loss.
Convertible Derivative
debenture liability
Balance, December 31, 2023 $ 1,923,509 $ 1,245,627
Principal amount (ii) 3,667,170 -
Derivative liability component (ii) (748,337 ) 748,337
Convertible debenture converted (i) (82,404 ) -
Interest payment (i) (157,422 ) -
Interest expense (i)(ii) 937,226 -
Accretion expense (i)(ii) 592,388 -
Change in fair value (i)(ii) - (1,870,422 )
Foreign exchange adjustment 424,025 -
Balance, December 31, 2024 6,556,155 123,542
Interest expense (i)(ii) 255,914 -
Accretion expense (i)(ii) 198,881 -
Change in fair value (i)(ii) - 365,290
Foreign exchange adjustment (5,162 ) -
Balance, March 31, 2025 $ 7,005,788 $ 488,832
11. Share Capital and Reserves
a) Authorized share capital
At March 31, 2025, the authorized share capital consisted of an unlimited
number of common and preference shares issuable in Series.
The common shares do not have a par value. All issued shares are fully paid.
No preference shares have been issued. The preference shares do not have a par
value.
b) Common shares issued
At March 31, 2025, the issued share capital amounted to $71,782,203. The
continuity of issued share capital for the periods presented is as follows:
Number of Amount
common
shares
Balance, December 31, 2023 114,841,403 $ 71,809,999
Shares cancelled (306,110 ) (110,200 )
Balance, March 31, 2024 114,535,293 $ 71,699,799
Number of Amount
common
shares
Balance, December 31, 2024 and March 31, 2025 114,770,587 $ 71,782,203
c) Warrant reserve
The following table shows the continuity of warrants for the periods
presented:
Weighted
average
Number of exercise
warrants price
Balance, December 31, 2023 and March 31, 2024 19,658,904 $ 0.54
Balance, December 31, 2024 18,838,904 $ 0.54
Expired (8,674,631 ) 0.54
Balance, March 31, 2025 10,164,273 $ 0.55
The following table reflects the actual warrants issued and outstanding as of
March 31, 2025:
Grant date Exercise
Number fair value price
Expiry date of warrants ($) ($)
December 20, 2026 158,823 24,670 0.35
March 27, 2028 7,924,841 1,237,009 0.55
April 26, 2028 2,080,609 324,828 0.55
10,164,273 1,586,507 0.55
d) Stock options
The following table shows the continuity of stock options for the periods
presented:
Weighted
average
Number of exercise
options price
Balance, December 31, 2023 5,862,500 $ 0.78
Expired (85,000 ) 0.90
Balance, March 31, 2024 5,777,500 $ 0.78
Balance, December 31, 2024 and March 31, 2025 8,690,000 $ 0.58
(i) The portion of the estimated fair value of options granted in the current
and prior periods and vested during the three months ended March 31, 2025,
amounted to $71,473 (three months ended March 31, 2024 - $29,814).
The following table reflects the actual stock options issued and outstanding
as of March 31, 2025:
Weighted average Number of
remaining Number of options Number of
Exercise contractual options vested options
Expiry date price ($) life (years) outstanding (exercisable) unvested
May 19, 2026 0.86 1.13 3,560,000 3,560,000 -
June 21, 2026 0.73 1.22 425,000 425,000 -
August 27, 2026 0.86 1.41 20,000 20,000 -
May 3, 2027 0.60 2.09 1,560,000 1,560,000 -
April 29, 2029 0.23 4.08 3,125,000 1,041,667 2,083,333
0.58 2.37 8,690,000 6,606,667 2,083,333
12. Net Loss per Common Share
The calculation of basic and diluted loss per share for the three months ended
March 31, 2025 was based on the loss attributable to common shareholders of
$1,225,116 (three months ended March 31, 2024 - $653,616) and the weighted
average number of common shares outstanding of 114,770,587 (three months ended
March 31, 2024 - 114,732,865) for basic and diluted loss per share. Diluted
loss did not include the effect of 10,164,273 warrants (three months ended
March 31, 2024 - 19,658,904) and 8,690,000 options (three months ended March
31, 2024 - 5,777,500) for the three months ended March 31, 2025, as they are
anti-dilutive.
13. Revenues
Shipments of concentrate under the off-take arrangements commenced during the
second quarter of 2019. Concentrate sales provisional revenues during the
three months ended March 31, 2025 totalled approximately US$nil (CAD$nil)
(three months ended March 31, 2024 - US$207,000 (CAD$279,897). However, until
the mine reaches the commencement of commercial production, the net proceeds
from concentrate sales will be offset against Development assets.
14. Related Party Disclosures
Related parties pursuant to IFRS include the Board of Directors, close family
members, other key management individuals and enterprises that are controlled
by these individuals as well as certain persons performing similar functions.
Related party transactions conducted in the normal course of operations are
measured at the exchange amount and approved by the Board of Directors in
strict adherence to conflict of interest laws and regulations.
(a) The Company entered into the following transactions with related parties:
Three Months Ended
March 31,
2025 2024
Interest on related party loans (i) $ 419,217 $ 143,307
(i) Refer to note 14(a)(iii)(iv).
(ii) Refer to note 10.
(iii) As at March 31, 2025, the Company owes Ocean Partners $14,152,033
(December 31, 2024 - $12,613,719) which is recorded as due to related parties
on the unaudited condensed interim consolidated statement of financial
position. The loan bears interest at an annual rate of 12% compounded monthly.
March 31, December 31,
2025 2024
Balance, beginning of period $ 12,613,719 $ 5,673,150
Converted to convertible debentures (note 10) - (2,457,358 )
Loans transferred to Ocean Partners - 7,096,775
Advance 904,050 931,474
Repayment - (8,749 )
Interest 390,394 897,886
Foreign exchange adjustment 243,870 480,541
Balance, end of period $ 14,152,033 $ 12,613,719
(iv)
March 31, December 31,
2025 2024
Melquart Limited
Financing facilities, beginning of period $ 922,030 $ 638,432
Financing facility received - 137,936
Accretion 1,415 8,492
Interest 28,823 88,567
Foreign exchange adjustment 27,762 48,603
Balance, end of period $ 980,030 $ 922,030
(b) Remuneration of officer and directors of the Company was as follows:
Three Months Ended
March 31,
2025 2024
Salaries and benefits ((1)) $ 120,491 $ 92,121
Stock-based compensation 49,173 21,569
$ 169,664 $ 113,690
((1)) Salaries and benefits include director fees. As at March 31, 2025, due
to directors for fees amounted to $245,000 (December 31, 2024 - $210,000) and
due to officers, mainly for salaries and benefits accrued amounted to $139,817
(December 31, 2024 - $139,886), and is included with due to related parties.
(c) As at March 31, 2025, the issued shares of Galantas total 114,770,587.
Ross Beaty owns 3,744,747 common shares of the Company or approximately 3.3%
of the outstanding common shares. Premier Miton owns 4,848,243 common shares
of the Company or approximately 4.2%. Melquart owns, directly and indirectly,
28,140,195 common shares of the Company or approximately 24.5% of the
outstanding common shares of the Company. G&F Phelps owns 5,353,818 common
shares of the Company or approximately 4.7%. Eric Sprott owns 10,166,667
common shares of the Company or approximately 8.9%. Mike Gentile owns
6,217,222 common shares of the Company or approximately 5.4%. Ocean Partners
owns 5,269,477 common shares of the Company and approximately 4.6%.
Excluding the Melquart Ltd, Premier Miton, Mr. Beaty, Mr. Phelps, Mr. Sprott
and Mr. Gentile shareholdings discussed above, the remaining 49% of the shares
are widely held, which includes various small holdings which are owned by
directors of the Company. These holdings can change at anytime at the
discretion of the of the owner.
The Company is not aware of any arrangements that may at a subsequent date
result in a change in control of the Company.
15. Segment Disclosure
The Company has determined that it has one reportable segment. The Company's
operations are substantially all related to its investment in Cavanacaw and
its subsidiaries, Omagh and Flintridge. Substantially all of the Company's
revenues, costs and assets of the business that support these operations are
derived or located in Northern Ireland. Segmented information on a geographic
basis is as follows:
March 31, 2025 United Kingdom Canada Total
Current assets $ 732,011 $ 871,423 $ 1,603,434
Non-current assets $ 34,276,266 $ 1,854,916 $ 36,131,182
Revenues $ - $ - $ -
December 31, 2024 United Kingdom Canada Total
Current assets $ 838,421 $ 265,228 $ 1,103,649
Non-current assets $ 33,115,564 $ 1,858,958 $ 34,974,522
Revenues $ - $ - $ -
16. Contingency
During the year ended December 31, 2010, the Company's subsidiary Omagh
received a payment demand from Her Majesty's Revenue and Customs ("HMRC") in
the amount of $565,097 (GBP 304,290) in connection with an aggregate levy
arising from the removal of waste rock from the mine site during 2008 and
early 2009. Omagh believed this claim to be without merit. An appeal was
lodged with the Tax Tribunals Service and the hearing started at the beginning
of March 2017 and following a number of adjournments was completed in August
2018. During the year ended December 31, 2019, the Tax Tribunals Service
issued their judgement dismissing the appeal by Omagh in respect of the
assessments. A provision has now been included in the unaudited condensed
interim consolidated financial statements in respect of the aggregates levy
plus interest and penalty.
There is a contingent liability in respect of potential additional interest
which may be applied in respect of the aggregates levy dispute. Omagh is
unable to make a reliable estimate of the amount of the potential additional
interest that may be applied by HMRC.
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