REG - Galantas Gold Corp - Acquisition of Gairloch Project

Galantas GoldAnnouncement

27/01/2023 07:00

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RNS Number : 0340O  Galantas Gold Corporation  27 January 2023

 

GALANTAS GOLD ACQUIRES EXPLORATION RIGHTS TO HIGH-POTENTIAL DISTRICT FEATURING
A GOLD-BEARING VOLCANOGENIC MASSIVE SULPHIDE DEPOSIT IN SCOTLAND

January 27, 2023, TORONTO, CANADA - Galantas Gold Corporation (TSX-V &
AIM: GAL; OTCQX: GALKF) ("Galantas" or the "Company") is pleased to announce
that it has entered into an agreement (the "Lease Agreement" or the
"Agreement") to acquire a 100% interest and the exclusive rights to explore
and develop the Gairloch Project, a 217 km² mineral licence area in Scotland
that covers the Gairloch Schist Belt from the owners of the Gairloch Estate
lands (the "Lessor"). The Company has acquired exploration and developments
rights for an initial payment of £347,000 and annual payments of £69,000
beginning in year 6 (see the Lease Agreement Terms).

Historical Exploration Highlights*:

 

·    Drill hole GBH39 intersect of 11.29 grams per tonne (g/t) gold (Au),
2.44 g/t silver (Ag), 0.58% copper (Cu) and 0.19% zinc (Zn) over 16 metres (80
to 96 metres downhole).

·    Drill hole GBH30 intersect of 3.16 g/t Au, 3.39 g/t Ag, 0.90% Cu and
0.51% Zn over 18 metres (32.82 to 50.82 metres downhole).

·    Drill hole GBH68 intersect of 1.5 g/t Au, 16.5 g/t Ag, 5.92% Cu and
0.54% Zn over 6 metres (261.88 to 267.88 metres downhole).

·    District-scale potential with an outcrop tested by the British
Geological Survey (BGS) 10 km from historical drilling returning 4 g/t Au,
1.5% Cu and 2.3% Zn.

·    Elevated levels of cobalt identified in stream sampling and in outcrop
up to 410 g/t.

 

*True widths not known. Historical drill hole data obtained from logs written
by Consolidated Gold Fields Limited in 1979 and 1980, scanned copies supplied
by the British Geological Survey.

 

Mario Stifano, CEO of Galantas, commented: "We are excited about this
opportunity to secure rights to a highly prospective, 10 km-long gold bearing
volcanogenic-massive-sulphide trend that has had very little exploration since
the early 1980s, with high-priority targets identified.

 

"We have seen high-grade gold intercepts at shallow depths in Gairloch's
historical drilling records which were obtained from the British Geological
Survey, and are keen to follow up with our own targeting and drill program
with the aim of unlocking the first substantial volcanogenic massive sulphide
(VMS) deposit in Scotland. The host rocks at Gairloch appear to be
geologically similar to those in the Trans-Hudson Orogen in Manitoba and
Saskatchewan which contain the prolific Flin-Flon and Snow Lake VMS mining
camps. Along with our high-grade gold Omagh Project in Northern Ireland,
Galantas has secured two emerging underexplored districts with potential to
add significant shareholder value."

 

Gairloch Project Overview

 

The Gairloch Project is a landholding that covers the Gairloch Schist Belt, a
Paleoproterozic volcanic arc terrane on the northwest coast of Scotland. The
current licence area includes all mineral rights, other than gold and silver,
covering an entire estate of 217 km². An application for an Option to a Lease
Agreement for the gold and silver is pending with Crown Estate Scotland.

 

The project hosts the Kerry Road deposit surveyed from 1977 to 1982 by
Consolidated Goldfields, and remains underexplored.

 

Figure 1: Location map of the Gairloch Project within the Loch Maree Group in
Scotland.

 

Source: 'Petrogenesis of rare-metal pegmatites in high-grade metamorphic
terrances: A case study from the Lewisian Gneiss Complex of north-west
Scotland', June 2016, Precambrian Research 281, by R. Shaw, K.M. Goodenough,
N. M.W. Roberts, M.S.A. Horstwood, S.R. Chenery and A.G. Gunn.

 

Geology

 

The Archean Rocks of the United Kingdom are located in northwest Scotland and
represent part of the North Atlantic Craton, also exposed in Southern
Greenland and Labrador in Canada. Within this area in Scotland lies the
Paleoproterozoic Loch Maree Group which extends over 30 km and is widely
believed to have formed within a juvenile Island arc and/or accretionary
tectonic assemblage.

 

VMS deposits are major sources of zinc, copper, lead, silver and gold. They
often form in clusters in areas of ancient underwater volcanic activity.
Because of their polymetallic content, VMS deposits are one of the most
desirable deposit types for security against fluctuating prices of different
metals.

 

The Kerry Road deposit is a stratabound, Besshi-style, VMS gold-copper-zinc
deposit exposed at surface. It is one of the oldest known Besshi deposits,
similar in age to Sherridon district in Manitoba, Canada. Drilling by GreenOre
Gold PLC (GreenOre) in 2018 confirmed the presence of mineralization at Kerry
Road. Rock chip sampling conducted by GreenOre in 2018 also identified
elevated levels of cobalt in bedrock.

 

Exploration

 

Based on historical reports from Consolidated Goldfields, the Kerry Road
deposit was drill tested in the late 1970s to early 1980s, where 87 drill
holes (9,189 metres) were drilled to identify the deposit, which is reportedly
open along strike and at depth. Work was abandoned in 1982 due to low metal
prices at the time. Other than academic work and national geological surveys,
commercial exploration was not conducted over the region until 2018 when
GreenOre obtained the licence. A single short hole was drilled in 2018 (see
Figure 2 below).

 

 

 

Figure 2: Core from hole 18-G-01 drilled by GreenOre Gold Plc grading 1 g/t
Au, 0.9% Cu and 0.6% Zn over 17 metres (19 to 36 metres downhole) including 8
metres at 1.8g/t Au, 1.4% Cu and 0.7% Zn (22 to 30 metres downhole). Photo and
data obtained from GreenOre.

Figure 3: Main outcrop at Kerry Road deposit grading 4.09 g/t Au, 6 g/t Ag,
1.58% Cu and 2.27% Zn. Photo and data obtained from GreenOre.

 

Figure 4: Second outcrop at Kerry Road deposit with visible chalcopyrite, 30
metres northwest of main outcrop, grading 2.16 g/t Au, 14 g/t Ag, 5.23% Cu and
0.30% Zn. Photo and data obtained from GreenOre.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A number of follow-up targets have also been identified by Galantas from
regional geophysical and geochemical datasets supplied by the BGS. It has been
observed that the main minerals of interest are chalcopyrite, sphalerite,
pyrite and pyrrhotite found within quartz-carbonate schist. A review of the
historical assays indicates that gold is often associated with higher copper
grades. Recent academic studies, fieldwork and government surveys have
demonstrated the wider potential of the area, which to date has had no
commercial mining of any scale, despite the highly prospective nature of the
geology.

 

The BGS recorded an outcrop of 4 g/t Au in their MRP146 report associated with
a significant geophysical anomaly approximately 10 km south of the Kerry Road
deposit, but the area remains untested. The G-base stream sediment data
collected in the 1970s by the BGS over the wider area have also shown high
occurrences of copper, zinc and cobalt. Multiple historical geophysical
anomalies identified by the BGS in their regional magnetics and gravity
surveys remain untested. No official resource model has been completed to
date.

 

 

Table 1: Drill hole locations for holes GBH39, BGH30, GBH68 and 18-G-01.

 

 Hole     Easting  Northing  Elevation (ft)  Azimuth (grid north)  Dip  Depth
 GBH30    183879   872512    148             223                   -45  57.30
 GBH39    183912   872521    256             223                   -53  102.50
 GBH68    184181   872339    126             229                   -74  278.95
 18-G-01  183807   872534    146             223                   -45  55.00

Note: Easting and northings digitized from historical map as historical logs
only recorded location on a local grid.

Lease Agreement Terms

 

The Lease Agreement will continue for 30 years and will be renewable at the
election of Galantas, upon 90 days' prior written notice and upon the approval
of the Lessor, not to be unreasonably withheld, for a further 20-year period,
assuming all conditions of this Agreement have been met satisfactorily
according to the Lessor, acting reasonably, in respect of the Galantas'
conduct and operations. Galantas may terminate the Agreement with 18 months'
notice.

 

Galantas will make a payment of £347,000 representing payment for the first
five years of the lease. If the exploration phase continues past the fifth
anniversary of the effective date of the Agreement, Galantas will pay the
Lessor £69,400 index linked per lease year for each such lease year following
the fifth anniversary of the effective date, with such payment to be made at
the commencement of each such lease year.

 

During any mining phase, Galantas will pay the Lessor £50,000 index linked
per lease year, with such payment to be made at the commencement of each such
lease year. Galantas will grant a 5% net profits interest royalty (the "NPI"),
calculated according to standard industry terms and practices with the option
by the Lessor to convert the NPI to a 2% net smelter returns royalty (the
"NSR"), calculated according to standard industry terms and practices.

 

The Company has separately entered into an agreement to acquire the historical
drill and exploration database for (i) a payment of CAD$420,000 (approximately
£252,153), to be satisfied through the issuance of common shares of the
Company based on the 5-day volume weighted average price at the time of
signing (subject to the approval of the TSX Venture Exchange) and (ii)
£50,000 in cash.

 

Qualified Person

 

The historical technical information in this release has been reviewed and
approved by Gavin Berkenheger (CGeol, EurGeol) who is considered, by virtue of
his education, experience and professional association, a Qualified Person
under the terms of NI 43-101. Mr. Berkenheger is not considered independent
under NI 43-101 as he is a consultant of Galantas Gold Corporation.

Quality Assurance / Quality Control and Data Verification

 

Mr. Berkenheger has verified the data disclosed, including sampling,
analytical, and test data underlying the information or opinions contained in
the written disclosure as required by section 3.1 of NI 43-101.

 

Historical grades reported from the GreenOre database that was conducted by
the company from 2018 to 2021 was overseen by the author who was a Qualified
Person at the time using appropriate Quality Assurance and Quality Control
(QA/QC) protocols with respect to the insertion of blanks, standards and
duplicates into the sample stream prior to dispatch to ALS Laboratory, which
is consistent with industry best practices.

 

During GreenOre's drilling, the diamond drill core (HQ Size) was logged,
photographed and marked for sampling. There was insignificant core loss. A
diamond tipped core saw split the core with one half bagged and tagged for
assay and the other returned to the labeled core box and stored. Sealed and
tagged bags were shipped to ALS Laboratories in Loughrea, County Galway where
they were crushed to 70% less than 2mm, riffle split off 1kg then pulverize
split to better than 85% passing 75 microns (PREP-31B). Gold fire assay and
AAS finish was conducted with a 30g sample (au-AA25). Multi element analysis
was completed by high-grade four acid ICP-AES (ICP61a). The QP has reviewed
the QA/QC in relation to these drill results and is satisfied that the results
as reported are reliable.

 

Historical grades reported from the Consolidated Gold Fields data is thought
to be of good quality as the company, which was listed on the London Stock
Exchange and was once a constituent of the FTSE 100 Index, demonstrated best
practices at the time and was overseen by a qualified person. After
appropriate logging of drill core (BQ size), mineralized sections were split
using a manual splitter initially and later using a diamond core saw. There
was insignificant core loss. Details of the sample preparation and analysis
could not be verified. The laboratory used was the Wheal Jane Laboratory in
Cornwall which was consistent with industry best practice at the time. Full
details of the QA/QC could not be verified either, but grade data was
reviewed, in which select samples of drill core were re-assayed at three
different laboratories. There were good correlations with the re-check samples
in relation to zinc and copper but some significant discrepancies were noted
in some of the gold re-check samples. It is not known whether this was due to
laboratory error or due to a "nugget effect" whereby larger grains of gold may
be missed or they may enhance the representative sample used to determine the
overall grade. GreenOre's drill hole which was a re-drill of Consolidated Gold
Fields' hole GBH03 demonstrated similar, in fact enhanced grades of the
historical hole, corroborating the reliability of the historical data. Only
20% of the historical drill core remains and this was observed by the author
at the British Geological Survey's core storage in Keyworth, Nottingham.
Re-assay of historical core has not yet been conducted but may be difficult
due to the size of representative core remaining. The QP having reviewed the
results in relation to the historical data is satisfied that the results as
reported are reliable.

 

Historical Reports

 

Data relating to Consolidated Gold Fields is held by the British Geological
Survey listed under MEIGA Project number 173:

·    Gairloch Exploration report, December 21, 1977, E. Jones, Consolidated
Gold Fields Limited

·    Project Gairloch Technical Report and Work Programme, August 18, 1978,
Consolidated Gold Fields Limited

·    AE173 Gairloch Phase 4, 1978, Consolidated Gold Fields Limited

·    Technical Report Phase 2: July 1, 1978 to June 1979, Consolidated Gold
Fields Limited

·    Technical Report Phase 3: July 1, 1979 to October 1979, Consolidated
Gold Fields Limited

·    The Petrology, Ore Mineralogy, Geochemistry and Paragenesis of Rocks
at Gairloch Site, C.M. Rice, Department of Geology and Mineralogy, University
of Aberdeen

·    Consolidated Gold Fields Limited, Diamond Drill Core Records, Project
Gairloch, DDH No. GBH01 to GBH87

·    Gairloch Project Phase 4, Consolidated Gold Fields Limited

·    Technical Report: July 1,1980 to June 30, 1981, Phase 4a, Consolidated
Gold Fields Limited

·    Technical Report: July 1,1981 to May 31, 1982, Phase 4b, Consolidated
Gold Fields Limited

 

Data relating to GreenOre Gold can be found in news releases dated October 16,
2018 and March 4, 2020 that are posted on its website at
https://greenoregold.com/ (https://greenoregold.com/) .

 

 

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 OTCQX 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.

 

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, George Grainger, Samuel Littler

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 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 the closing of the transaction
and results of exploration programs at the 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 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.

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