REG - Galantas Gold Corp - CLOSING OF US$2.6 MILLION PRIVATE PLACEMENT

Galantas GoldAnnouncement

21/12/2023 07:15

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RNS Number : 5375X  Galantas Gold Corporation  21 December 2023

 

 

GALANTAS GOLD ANNOUNCES CLOSING OF US$2.6 MILLION PRIVATE PLACEMENT OF
UNSECURED CONVERTIBLE DEBENTURES AND TERMS OF DEBT SETTLEMENT TRANSACTION

 

Not for distribution to United States news wire services or for dissemination
in the United States

DECEMBER 21, 2023, TORONTO, CANADA - Galantas Gold Corporation (TSX-V &
AIM: GAL; OTCQX: GALKF) ("Galantas" or the "Company") is pleased to announce
the closing of its previously announced non-brokered private placement,
pursuant to which the Company sold US$2,627,000 aggregate principal amount of
unsecured convertible debentures of the Company (the "Debentures"), in the
principal amount of US$1,000 per Debenture (the "Offering"). The net proceeds
of the Offering are expected to be used for exploration and development,
working capital and for general corporate purposes.

Each Debenture is convertible at the option of the holder thereof into common
shares in the capital of the Company (the "Conversion Shares") at a conversion
price of US$0.255 per Conversion Share (the "Conversion Price") at any time
prior to 5:00 p.m. (Toronto time) on the last business day immediately
preceding December 20, 2026 (the "Maturity Date"). In accordance with the
terms of the Debentures, if, at any time following the issuance of the
Debentures, the closing price of the common shares of the Company on the TSX
Venture Exchange (the "TSXV") equals or exceeds C$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 Debentures into
Conversion Shares at the Conversion Price, upon giving the holders of the
Debentures not less than 30 calendar days advance written notice. On the
Maturity Date, any outstanding principal amount of Debentures plus any accrued
and unpaid interest thereon shall be repaid by the Company in cash.

Interest on the principal amount outstanding under each Debenture shall accrue
during the period commencing on the date hereof (the "Closing Date") until the
Maturity Date and shall be payable in cash on an annual basis on December
31(st) of each year (each, an "Interest Payment Date"); provided, however,
that the first Interest Payment Date shall be December 31, 2024. Each
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 the Closing Date 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 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 the Closing
Date to and including December 15, 2024, and for each subsequent Interest
Period, from January 1(st) to and including December 15(th) of that year or 15
days prior to the applicable payment date.

In connection with the Offering, the Company paid a cash finder's fee of
US$40,500 and issued 158,823 non-transferable finder's warrants ("Finder
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 C$0.35 per common share at any time on or before December
20, 2026.

In connection with the Offering, Ocean Partners UK Ltd. acquired US$875,000
aggregate principal amount of Debentures.

The Offering remains subject to the final acceptance of the TSXV. The
securities issued pursuant to the Offering are subject to a four-month hold
period under applicable Canadian securities laws which will expire on April
21, 2024.

The securities offered have not been, nor will they be, registered under the
United States Securities Act of 1933, as amended, or any state securities law,
and may not be offered or sold in the United States absent registration or an
exemption from such registration requirements. This news release shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the securities in any state in which such offer,
solicitation or sale would be unlawful.

Debt Settlement Transaction

The Company is also pleased to announce the terms of a proposed debt
settlement transaction (the "Debt Settlement") with an arm's length creditor
of the Company pursuant to which the Company intends to settle approximately
US$2,712,000 of indebtedness through the issuance of US$2,712,000 aggregate
principal amount of Debentures on substantially the same terms as the
Debentures issued under the Offering.

Closing of the Debt Settlement is expected to occur on or about December 29,
2023, and remains subject to certain closing conditions including, but not
limited to, the receipt of all necessary approvals, including the conditional
acceptance of the TSXV. The securities issued pursuant to the Debt Settlement
will be subject to a four-month hold period under applicable Canadian
securities laws.

61-101 Disclosure

In connection with the Offering, Melquart Ltd. ("Melquart") subscribed for
US$875,000 aggregate principal of Debentures. Melquart is a "related party" of
the Company by virtue of being a control person of the Company within the
meaning of Multilateral Instrument 61-101 - Protection of Minority Security
Holders in Special Transactions ("MI 61-101"). Accordingly, the participation
of Melquart in the Offering constitutes a "related party transaction" for
purposes of MI 61-101. The Company has completed the Offering in reliance on
exemptions from the formal valuation and minority approval requirements of MI
61-101. The Company is exempt from the formal valuation requirement in Section
5.4 of MI 61-101 in reliance on Section 5.5(b) of MI 61-101 as no securities
of the Company are listed or quoted on a specified market under MI 61-101.
Additionally, the Company is exempt from the minority approval requirement in
Section 5.6 of MI 61-101 in reliance on Section 5.7(1)(a) of MI 61-101 as
neither the fair market value of the subject matter of, nor the fair market
value of the consideration for, the Offering, insofar as it involves
"interested parties", exceeds 25% of the Company's market capitalization as
calculated in accordance with MI 61-101. The Company did not file a material
change report more than 21 days before the expected closing date of the
Offering as the participation therein by Melquart was not confirmed until
shortly prior to closing, and the Company wished to close the Offering as
expeditiously as possible.

Melquart is also deemed a related party of the Company by virtue of being a
Substantial Shareholder of the Company as defined in the AIM Rules for
Companies. As a consequence, the Directors of the Company consider, having
consulted with their nominated adviser, Grant Thornton UK LLP, that the terms
of Melquart's involvement in the Offering are fair and reasonable insofar as
shareholders are concerned.

 

About Galantas Gold Corporation

 

Galantas Gold Corporation is a Canadian public company that trades on the TSXV
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, 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, Enzo Aliaj

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 the use of proceeds of the
Offering, the terms of the Debt Settlement, the timing and ability of the
Company to close the Debt Settlement (if at all) and on the terms announced,
the timing and ability of the Company to receive necessary regulatory
approvals in respect of the Offering and the Debt Settlement, and the plans,
operations and prospects of the Company. 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.

 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in 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.

 

(UK) DEALING NOTIFICATION FORM

 FOR USE BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITY AND THEIR CLOSELY
ASSOCIATED PERSONS

 

 1.            Details of the person discharging managerial responsibilities/person closely
               associated
 a)            Name:                                                       Ocean Partners UK Ltd
  2.           Reason for the notification
 a)            Position/status:                                            Ocean Partners UK Ltd is a person closely associated with Brent Omland, a
                                                                           Director of Galantas
 b)            Initial notification/Amendment:                             Initial Notification
 3.            Details of the issuer, emission allowance market participant, auction
               platform, auctioneer or auction monitor
 a)            Name:                                                       Galantas Gold Corporation
 b)            LEI:                                                        LEI: 213800JKVPLLKO4KVB93
 4.            Details of the transaction(s): section to be repeated for (i) each type of
               instrument; (ii) each type of transaction; (iii) each date; and (iv) each
               place where transactions have been conducted
 a)            Description of the financial instrument type of instrument  Debentures

               Identification Code

                                                                           N/A
 b)            Nature of the transaction                                   Private Placement of Debentures
 c)            Price(s) and volume                                         Price     Volume
                                                                           US$1,000  875
 d)            Aggregated information                                      N/A single transaction
 e)            Date of the transaction                                     December 20, 2023
 f)            Place of the transaction                                    Outside of a trading venue

d)

Aggregated information

N/A single transaction

e)

Date of the transaction

December 20, 2023

f)

Place of the transaction

Outside of a trading venue

 

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