REG - Galantas Gold Corp - Shares for debt transactions and notice of AGM

Galantas GoldAnnouncement

09/06/2025 07:00

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RNS Number : 9017L  Galantas Gold Corporation  09 June 2025

 

 

GALANTAS GOLD ENTERS INTO BINDING TERM SHEET FOR JOINT VENTURE WITH OCEAN
PARTNERS UK LIMITED TO DEVELOP OMAGH GOLD PROJECT IN NORTHERN IRELAND

 

US$3.0 MILLION INVESTMENT FOR EXPLORATION AND RESTART PLAN, SHARES FOR DEBT
TRANSACTIONS AND NOTICE OF ANNUAL GENERAL MEETING AND SPECIAL MEETING

 

JUNE 9, 2025, TORONTO, CANADA - Galantas Gold Corporation (TSX-V & AIM:
GAL; OTCQB: GALKF) ("Galantas" or the "Company") is pleased to announce that
it has entered into a Binding Term Sheet with Ocean Partners UK Limited
("Ocean Partners") on June 6, 2025 to joint venture the high-grade Omagh Gold
Project in County Tyrone, Northern Ireland (the "Omagh Project"). Ocean
Partners will exchange approximately US$14 million (GBP £10.3 million) in
existing loans for an 80% interest in Flintridge Resources Limited
("Flintridge") and an 80% interest in Omagh Minerals Ltd ("Omagh Minerals"),
subsidiaries of Galantas which together own the Omagh Project (the "Proposed
Transaction"). The remaining 20% interest in Flintridge and 20% interest in
Omagh Minerals will be retained by Galantas. Following the Proposed
Transaction, Ocean Partners will have the option to convert the approximately
US$1 million (GBP £738,481) of remaining debt into a 0.001% interest in
Flintridge at any time after mining has restarted on the Omagh Project.

 

Ocean Partners will invest an initial US$3 million (GBP £2.2 million) in the
Omagh Project for exploration, a restart plan and general and administrative
costs for a period of up to one year (the "Initial Term"). After the Initial
Term, Ocean Partners will have the option to invest an additional US$5 million
(GBP £3.7 million) for exploration and commissioning a development program
for a period of up to one year (the "Second Term"). Galantas will be free
carried on the initial US$3 million (GBP £2.2 million) investment and will
have the option to invest its pro-rata share on future investments, including
the Second Term.

 

Mario Stifano, CEO of Galantas, commented: "We are very pleased to enter into
the Proposed Transaction with Ocean Partners, a long-standing stakeholder who
recognizes the district-scale and high-grade potential of the Omagh Project.
The Proposed Transaction represents a turning point in the Omagh Project's
development, enabling Galantas to benefit from a recommencement in production
amid rising gold prices, while also strengthening the Company's balance sheet.
The Company will have the benefit of receiving gold ounces once the Omagh
Project is restarted, while also advancing the Gairloch high-grade gold and
copper VMS project in Scotland. Upon closing of the Proposed Transaction, the
joint venture intends to commence a drill program targeting the high-grade
zones at the Omagh Project's Joshua Vein and test the northern extension of
the Kearney Vein."

 

 

 

 

Rule 15 of the AIM Rules for Companies - Fundamental change of business

 

The Proposed Transaction constitutes a fundamental change in business under
Rule 15 of the AIM Rules for Companies by virtue of the size of the
disposition and is subject to shareholder approval at a meeting or by a
written shareholders' resolution signed by at least 50% of the shareholders of
the issuer.  Notwithstanding the Company proposes to divest substantially all
of its trading business and assets, the Company will continue to be admitted
to trading on AIM and will not be classified as an AIM Rule 15 cash shell.
If the Proposed Transaction is concluded, Galantas will focus on initiating an
inaugural mineral resource estimate at the Gairloch Project in Scotland and
also commence an exploration drilling program at Gairloch.

 

Upon closing of the Proposed Transaction, Ocean Partners and Galantas will
sign a  shareholders agreement (the "Joint Venture") focused on exploration
and restart plans with Ocean Partners as project operator. The board of
directors of Flintridge shall be comprised of four representatives of Ocean
Partners and one representative of the Company for so long as the Company owns
at least a 10% interest in Flintridge. There will be no change to the board of
directors of the Company following the Proposed Transaction. Flintridge will
have a fixed valuation of US$15 million (GBP £11.1 million) for future cash
calls.

 

During the Initial Term, Galantas shall have the option (the "Galantas
Option") to convert its 20% ownership interest in Flintridge into a 3.00% net
smelter return royalty (the "3% NSR"). 50% of the 3% NSR shall be subject to a
buy-back provision for US$8 million (GBP £5.9 million) by Flintridge. In the
event that: (i) Galantas does not exercise the Galantas Option during the
Initial Term; and (ii) Galantas is diluted to below 10% ownership in
Flintridge, the entirety of Galantas' ownership shall automatically convert to
a 1.5% net smelter return royalty (the "1.5% NSR").  The remaining 50% of the
1.5% NSR shall be subject to a buy-back provision for US$4 million (GBP £3.0
million) by Flintridge.

 

Galantas has entered into an exclusivity period with Ocean Partners regarding
the Proposed Transaction, including without limitation, the settling of the
form of Definitive Agreements, until the earlier of (i) the date of the
execution of a mutually acceptable Definitive Agreements, (ii) the date upon
which Ocean Partners and Galantas mutually agree in writing to terminate
discussions, or (iii) June 30, 2025, unless extended by mutual agreement by
Ocean Partners and Galantas.

 

The Proposed Transaction remains subject to conditions precedent, including
Ocean Partners board approval and completion of due diligence by Ocean
Partners, the completion of definitive documentation and the receipt of all
required approvals and consents, including shareholder approval by Galantas
shareholders as well as formal filings with and approval from the TSX Venture
Exchange.

 

Ocean Partners is a person closely associated with Brent Omland, a Director of
Galantas (within the meaning of the EU Market Abuse Regulation). Mr. Omland is
Chief Executive Officer of Ocean Partners and is a nominee of Ocean Partners
on the board of Galantas and holds a minority stake in, and is a director of,
Ocean Partners' parent entity.

 

AIM Rule 13 - Related-party transaction

 

Melquart Limited ("Melquart"), a shareholder with 24.5% ownership, indicated
that, subject to approval by the Company's shareholders, it intends to convert
US$875,000 (GBP £646,171) of its debt held as a convertible note plus accrued
interest of US$182,803 (GBP £134,997) into 17,630,050 common shares of no par
value ("Common Shares") in Galantas at a deemed price of US$0.06 (GBP £0.044)
per share (the "Discounted Price") (the "Melquart Debt Transaction").

 

Melquart is deemed a related party to the Company for the purposes of the AIM
Rules for Companies. The Melquart Debt Transaction is considered a
related-party transaction for the purposes of Rule 13 of the AIM Rules for
Companies. Accordingly, the directors of the Company, who are all considered
independent of the Melquart Debt Transaction, having consulted with their
Nominated Adviser, consider that the terms of the Melquart Debt Transaction to
be fair and reasonable in so far as the Company's shareholders
("Shareholders") are concerned.

 

Following the Melquart Debt Transaction, Melquart will hold 47,372,977 Common
Shares equal to approximately 35.4% of the Company's issued share capital.

 

Multilateral Instrument 61-101 - Protection of Minority Security Holders

 

The Company is exempt from the requirements of MI 61-101 to obtain a formal
valuation and minority shareholder approval in connection with the Proposed
Transaction with Ocean Partners in reliance on section 5.5(g) of MI 61-101.
The Company is also exempt from the formal valuation requirements for the
related party transaction with Melquart in reliance of section 5.5(g).

 

Specifically,

i.    the Company in serious financial difficulty,

ii.   the transaction is designed to improve the financial position of the
Company,

iii.  the Company is not in bankruptcy, insolvency or under a court order,

iv.  the Company formed a committee comprised of three independent directors
in respect of the transaction, and

v.   the Company's board of directors, acting in good faith, unanimously
determined, including the independent committee, acting in good faith,
determined that

a.   the Company is in serious financial difficulty and the transaction is
designed to improve the financial position of the Company, and

b.   the terms of the transaction are reasonable in the circumstances of the
Company.

 

MI 61-101 does, however, require shareholder approval for the Melquart Debt
Transaction by a majority of "disinterested shareholders" as defined in MI
61-101. Additionally, pursuant to policies of the TSX Venture Exchange, the
Proposed Transaction with Ocean Partners is being treated as a "non-arm's
length" transaction,and will also require shareholder approval by a majority
of "disinterested shareholders" as defined in MI 61-101.

 

 

 

 

Notice of Annual General Meeting and Special Meeting

 

The Company has called a new meeting date for its Annual General Meeting and
Special Meeting of its Shareholders to consider, among other things, the
Proposed Transaction and the Melquart Debt Transaction to be held on August 5,
2025 at 11:00 a.m. (Toronto time) at the offices of DSA Corporate Services
Inc., 82 Richmond Street East, Toronto, Ontario, M5C 1P1. Shareholders of
record at the close of business at 5:00 p.m. (Toronto time) on July 2, 2025
will be entitled to vote at the meeting.

 

The total losses attributable to Flintridge and Omagh Minerals for the year
ended December 31, 2023 were £3,516,576 and the total value of the assets
were £17,321,724. Following the Proposed Transaction, the assets of
Flintridge and Omagh Minerals will no longer be consolidated in the accounts
of the Company.

 

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.

 

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.

 

About Galantas Gold Corporation

 

Galantas Gold Corporation is a Canadian public company that trades on the TSX
Venture Exchange and the London Stock Exchange AIM market, both under the
symbol GAL. It also trades on the OTCQB Exchange under the symbol GALKF. The
Company's strategy is to create shareholder value by operating and expanding
gold production and resources at the Omagh Project in Northern Ireland, and
exploring the Gairloch Project hosting the Kerry Road gold-bearing VMS deposit
in Scotland.

 

Enquiries

 

Galantas Gold Corporation

Mario Stifano: Chief Executive Officer

Email: info@galantas.com

Website: www.galantas.com

Telephone: +44(0)28 8224 1100

 

Grant Thornton UK LLP (AIM 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 & Broking)

Telephone: +44(0)20 3470 0470

 

Forward-Looking Statements

 

This news 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 closing of the Proposed
Transaction, Melquart Debt Transaction, and the Financing, and use of
proceeds, results of exploration and mine development programs at the Omagh
Project and Gairloch 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'
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 news 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 news
release, except as required by law.

 

 

 

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