REG - Galantas Gold Corp - RESULTS FOR THE QUARTER ENDED MARCH 31, 2023
30/05/2023 07:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230530:nRSd8959Aa&default-theme=true
RNS Number : 8959A Galantas Gold Corporation 30 May 2023
GALANTAS GOLD CORPORATION
TSXV & AIM: Symbol GAL
GALANTAS REPORT FINANCIAL RESULTS FOR THE QUARTER ENDED MARCH 31, 2023
May 30, 2023: Galantas Gold Corporation (the 'Company') is pleased to
announce its unaudited financial results for the Quarter ended March 31, 2023.
Financial Highlights
Highlights of the first quarter 2023 results, which are expressed in Canadian
Dollars, are summarized below:
All figures denominated in Canadian Dollars (CDN$)
Quarter Ended
March 31
2023 2022
Revenue $ 0 $ 0
Cost and expenses of operations $ (50,215) $ (46,639)
Loss before the undernoted $ (50,215) $ (46,639)
Depreciation $ (126,105) $ (130,531)
General administrative expenses $ (1,242,764) $ (1,171,170)
Foreign exchange gain (loss) $ 25,470 $ (67,472)
Net (Loss) for the quarter $ (1,393,614) $ (1,415,812)
Working Capital Deficit $ (11,074,990) $ (1,850,980)
Cash loss from operating activities before changes in non-cash working capital $ (475,530) $ (577,604)
Cash at March 31, 2023 $ 2,516,822 $ 2,417,152
Sales revenue for the quarter ended March 31, 2023 amounted to $ Nil compared
to revenue of $ Nil for the quarter ended March 31, 2022. Shipments of
concentrate commenced during the third quarter of 2019. Concentrate sales
provisional revenues totalled US$ 255,000 for the first quarter of 2023
compared to US $ 219,000 for the first quarter of 2022. 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, 2023 amounted to $ 1,393,614
(2021: $ 1,415,812) and the cash outflow from operating activities before
changes in non-cash working capital for the quarter ended March 31, 2023
amounted to $475,530 (2022: $577,604).
The Company had a cash balance of $2,516,822 at March 31, 2023 compared to $
2,417,152 at March 31, 2022. The working capital deficit at March 31, 2023
amounted to $ 11,074,990 compared to a working capital deficit of $ 1,850,980
at March 31, 2022. The increase results from a recategorization of loans from
non current to current.
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/8959A_1-2023-5-29.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8959A_1-2023-5-29.pdf)
Qualified Person
The financial components of this disclosure have been reviewed by Alan Buckley
(Chief Financial Officer) and the production and permitting components by
Brendan Morris (COO), qualified persons under the meaning of NI. 43-101. The
information is based upon local production and financial data prepared under
their supervision.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains
forward-looking statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian securities
laws, including revenues and cost estimates, for the Omagh Gold project.
Forward-looking statements are based on estimates and assumptions made by
Galantas in light of its experience and perception of historical trends,
current conditions and expected future developments, as well as other factors
that Galantas believes are appropriate in the circumstances. Many factors
could cause Galantas' actual results, the performance or achievements to
differ materially from those expressed or implied by the forward looking
statements or strategy, including: gold price volatility; discrepancies
between actual and estimated production, actual and estimated
metallurgical recoveries and throughputs; mining operational risk,
geological uncertainties; regulatory restrictions, including environmental
regulatory restrictions and liability; risks of sovereign involvement;
speculative nature of gold exploration; dilution; competition; loss of or
availability of key employees; additional funding requirements; uncertainties
regarding planning and other permitting issues; and defective title to mineral
claims or property. These factors and others that could affect Galantas'
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, 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 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, 2023
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,
2023 2022
ASSETS
Current assets
Cash and cash equivalents $ 2,516,822 $ 1,038,643
Accounts receivable and prepaid expenses (note 4) 1,570,518 1,810,993
Inventories (note 5) 80,285 83,242
Total current assets 4,167,625 2,932,878
Non-current assets
Property, plant and equipment (note 6) 25,910,707 24,255,849
Long-term deposit (note 8) 501,780 489,660
Exploration and evaluation assets (note 7) 3,660,664 2,665,313
Total non-current assets 30,073,151 27,410,822
Total assets $ 34,240,776 $ 30,343,700
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities (notes 9 and 16) $ 4,608,751 $ 4,052,041
Current portion of financing facilities (note 10) 5,252,499 4,836,267
Due to related parties (note 14) 5,381,365 5,072,534
Total current liabilities 15,242,615 13,960,842
Non-current liabilities
Non-current portion of financing facilities (note 10) 571,910 -
Decommissioning liability (note 8) 599,498 582,441
Other liability (note 14) 1,021,819 1,085,426
Total non-current liabilities 2,193,227 1,667,867
Total liabilities 17,435,842 15,628,709
Equity
Share capital (note 11(a)(b)) 71,104,535 69,664,056
Reserves 17,558,183 15,515,105
Deficit (71,857,784 ) (70,464,170 )
Total equity 16,804,934 14,714,991
Total equity and liabilities $ 34,240,776 $ 30,343,700
The notes to the unaudited condensed interim consolidated financial statements
are an integral part of these statements.
Going concern (note 1)
Incorporation and nature of operations (note 2)
Contingency (note 16)
Events after the reporting period (note 17)
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended
March 31,
2023 2022
Revenues
Sales of concentrate (note 13) $ - $ -
Cost and expenses of operations
Cost of sales 50,215 46,639
Depreciation (note 6) 126,105 130,531
176,320 177,170
Loss before general administrative and other expenses (176,320 ) (177,170 )
General administrative expenses
Management and administration wages (note 14) 124,198 117,640
Other operating expenses 94,763 78,788
Accounting and corporate 146,611 152,979
Legal and audit 43,393 63,640
Stock-based compensation (note 11(d)) 183,723 350,539
Shareholder communication and investor relations 162,595 135,787
Transfer agent 6,345 4,015
Director fees (note 14) 35,000 35,000
General office 41,946 21,187
Accretion expenses (notes 8, 10 and 14) 111,132 120,487
Loan interest and bank charges less deposit interest (notes 10 and 14) 293,058 91,108
1,242,764 1,171,170
Other expenses
Foreign exchange gain (loss) (25,470 ) 67,472
(25,470 ) 67,472
Net loss for the period $ (1,393,614 ) $ (1,415,812 )
Basic and diluted net loss per share (note 12) $ (0.01 ) $ (0.02 )
Weighted average number of common shares outstanding - basic and diluted 103,893,399 78,556,743
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,
2023 2022
Net loss for the period $ (1,393,614 ) $ (1,415,812 )
Other comprehensive income (loss)
Items that will be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations 453,574 (870,977 )
Total comprehensive loss $ (940,040 ) $ (2,286,789 )
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,
2023 2022
Operating activities
Net loss for the period $ (1,393,614 ) $ (1,415,812 )
Adjustment for:
Depreciation (note 6) 126,105 130,531
Stock-based compensation (note 11(d)) 183,723 350,539
Accrued interest (notes 10 and 14) 395,054 171,614
Foreign exchange loss 102,070 93,714
Accretion expenses (notes 8, 10 and 14) 111,132 91,810
Non-cash working capital items:
Accounts receivable and prepaid expenses 251,144 567,842
Inventories 4,896 95,585
Accounts payable and other liabilities 461,212 (82,217 )
Due to related parties - (129,249 )
Net cash and cash equivalents provided by (used in) operating activities 241,722 (125,643 )
Investing activities
Net purchase of property, plant and equipment (1,187,334 ) (2,458,074 )
Exploration and evaluation assets (921,853 ) (425,831 )
Lease payments - (137,145 )
Net cash and cash equivalents used in investing activities (2,109,187 ) (3,021,050 )
Financing activities
Proceeds of private placements (note 11(b)(i)) 2,963,142 -
Share issue costs (204,993 ) -
Proceeds from exercise of warrants 5,600 3,135,200
Advances from related parties - 1,380,477
Repayments to related parties (6,500 ) -
Proceeds from financing facilities (note 10) 580,392 -
Net cash and cash equivalents provided by financing activities 3,337,641 4,515,677
Net change in cash and cash equivalents 1,470,176 1,368,984
Effect of exchange rate changes on cash held in foreign currencies 8,003 (21,583 )
Cash and cash equivalents, beginning of period 1,038,643 1,069,751
Cash and cash equivalents, end of period $ 2,516,822 $ 2,417,152
Cash $ 2,516,822 $ 2,417,152
Cash equivalents - -
Cash and cash equivalents $ 2,516,822 $ 2,417,152
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, 2021 $ 57,783,570 $ 4,130,200 $ 10,417,260 $ 887,909 $ (53,830,231 ) $ 19,388,708
Warrants issued - 51,000 - - - 51,000
Stock-based compensation (note 11(d)) - - 350,539 - - 350,539
Exercise of warrants 4,093,100 (957,900 ) - - - 3,135,200
Exchange differences on translating foreign operations - - - (870,977 ) - (870,977 )
Net loss for the period - - - - (1,415,812 ) (1,415,812 )
Balance, March 31, 2022 $ 61,876,670 $ 3,223,300 $ 10,767,799 $ 16,932 $ (55,246,043 ) $ 20,638,658
Balance, December 31, 2022 $ 69,664,056 $ 3,903,004 $ 11,887,678 $ (275,577 ) $ (70,464,170 ) $ 14,714,991
Shares issued in private placement (note 11(b)(i)) 2,963,142 - - - - 2,963,142
Warrants issued (note 11(b)(i)) (1,284,806 ) 1,284,806 - - - -
Warrants issued (notes 10(i) and 14(a)(iv)) - 82,511 - - - 82,511
Share issue costs (note 11(b)(i)) (245,168 ) 40,175 - - - (204,993 )
Stock-based compensation (note 11(d)) - - 183,723 - - 183,723
Exercise of warrants 7,311 (1,711 ) - - - 5,600
Warrants expired - (51,000 ) 51,000 - - -
Exchange differences on translating foreign operations - - - 453,574 - 453,574
Net loss for the period - - - - (1,393,614 ) (1,393,614 )
Balance, March 31, 2023 $ 71,104,535 $ 5,257,785 $ 12,122,401 $ 177,997 $ (71,857,784 ) $ 16,804,934
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, 2023
(Expressed in Canadian Dollars)
(Unaudited)
1. Going Concern
These unaudited condensed interim consolidated financial statements have been
prepared on a going concern basis which contemplates that Galantas Gold
Corporation (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 subsidiary Cavanacaw Corporation ("Cavanacaw"). Cavanacaw has a
100% shareholding in both Flintridge Resources Limited ("Flintridge") who are
engaged in the acquisition, exploration and development of gold properties,
mainly in Omagh, Northern Ireland and Omagh Minerals Limited ("Omagh") who are
engaged in the exploration of gold properties, mainly in the Republic of
Ireland. The Omagh mine has 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 upon forecast cash flows being met
and further financing currently being negotiated. The management's assumptions
in relation to future levels of production, gold prices and mine operating and
capital 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 finance.
Negotiations with current finance providers to extend short-term loans have
commenced, are progressing positively and the maturity dates for both the
G&F Phelps Ltd. ("G&F Phelps") and Ocean Partners UK Ltd. ("Ocean
Partners") loans are expected to be extended beyond March 31, 2023 (see notes
10 and 14).
During the year ended December 31, 2022, the Company raised gross proceeds of
$11M through the issuance of shares to investors and the exercise of warrants
to meet the financial requirements of the Company for the foreseeable future.
During the three months ended March 31, 2023, the Company raised gross
proceeds of $3M through the issuance of shares to investors. Based on the
financial projections prepared, the directors believe it's appropriate to
prepare the unaudited condensed interim consolidated financial statements on
the going concern basis.
As at March 31, 2023, the Company had a deficit of $71,857,784 (December 31,
2022 - $70,464,170). Comprehensive loss for the three months ended March 31,
2023 was $940,040 (three months ended March 31, 2022 - $2,286,789). 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 factors including market conditions. 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.
2. Incorporation and Nature of Operations
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 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, 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. Following a strategic review
of its business by the Company during 2014 certain assets owned by Omagh were
acquired by Flintridge.
The Company's operations include the consolidated results of 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.
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 29,
2023 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, 2022. Any subsequent changes to IFRS that are given effect in the
Company's annual consolidated financial statements for the year ending
December 31, 2023 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,
2023 2022
Sales tax receivable - Canada $ 38,583 $ 22,971
Valued added tax receivable - Northern Ireland 136,290 281,308
Accounts receivable 154,510 116,374
Prepaid expenses 1,241,135 1,390,340
$ 1,570,518 $ 1,810,993
Prepaid expenses includes advances for consumables and for construction of the
passing bays in the Omagh mine. Prepaid expenses includes also $1,000,000
pursuant to services agreement for the underground development at the Omagh
Gold Project.
The following is an aged analysis of receivables:
As at As at
March 31, December 31,
2023 2022
Less than 3 months $ 210,130 $ 343,381
3 to 12 months 65,392 51,868
More than 12 months 53,861 25,404
Total accounts receivable $ 329,383 $ 420,653
5. Inventories
As at As at
March 31, December 31,
2023 2022
Concentrate inventories $ 80,285 $ 83,242
6. Property, Plant and Equipment
Freehold Plant
land and and Motor Office Development Assets under
Cost buildings machinery (i) vehicles equipment assets (ii) construction Total
Balance, December 31, 2021 $ 2,363,814 $ 8,108,988 $ 199,217 $ 216,653 $ 22,561,674 $ 556,273 $ 34,006,619
Additions - 464,632 45,599 9,619 11,008,120 - 11,527,970
Disposals - - (14,531 ) - - - (14,531 )
Transfer - 529,972 - - - (529,972 ) -
Cash receipts from concentrate sales - - - - (823,475 ) - (823,475 )
Impairment - - - - (10,124,920 ) - (10,124,920 )
Foreign exchange adjustment (111,761 ) (381,794 ) (9,419 ) (10,243 ) (1,219,359 ) (26,301 ) (1,758,877 )
Balance, December 31, 2022 2,252,053 8,721,798 220,866 216,029 21,402,040 - 32,812,786
Additions - - - - 1,187,334 - 1,187,334
Foreign exchange adjustment 55,743 215,044 5,467 5,347 525,221 - 806,822
Balance, March 31, 2023 $ 2,307,796 $ 8,936,842 $ 226,333 $ 221,376 $ 23,114,595 $ - $ 34,806,942
Accumulated depreciation
Balance, December 31, 2021 $ 1,964,309 $ 6,067,698 $ 147,888 $ 137,888 $ - $ - $ 8,317,783
Depreciation 4,734 587,131 20,676 12,510 - - 625,051
Disposals - - (3,268 ) - - - (3,268 )
Foreign exchange adjustment (92,801 ) (276,816 ) (6,681 ) (6,331 ) - - (382,629 )
Balance, December 31, 2022 1,876,242 6,378,013 158,615 144,067 - - 8,556,937
Depreciation 968 118,046 4,374 2,717 - - 126,105
Foreign exchange adjustment 46,457 159,121 4,002 3,613 - - 213,193
Balance, March 31, 2023 $ 1,923,667 $ 6,655,180 $ 166,991 $ 150,397 $ - $ - $ 8,896,235
Carrying value
Balance, December 31, 2022 $ 375,811 $ 2,343,785 $ 62,251 $ 71,962 $ 21,402,040 $ - $ 24,255,849
Balance, March 31, 2023 $ 384,129 $ 2,281,662 $ 59,342 $ 70,979 $ 23,114,595 $ - $ 25,910,707
(i) Right-of-use assets of $282,041 is included in additions of the plant and
machinery for the year ended December 31, 2022.
(ii) Development assets are expenditures for the underground mining operations
in Omagh.
7. Exploration and Evaluation Assets
Exploration
and
evaluation
Cost assets
Balance, December 31, 2021 $ 1,574,183
Additions 1,165,561
Foreign exchange adjustment (74,431 )
Balance, December 31, 2022 2,665,313
Additions 921,853
Foreign exchange adjustment 73,498
Balance, March 31, 2023 $ 3,660,664
Carrying value
Balance, December 31, 2022 $ 2,665,313
Balance, March 31, 2023 $ 3,660,664
(i) On January 26, 2023, the Company announced that it entered into an
agreement to acquire a 100% interest and the exclusive rights to explore and
develop the Gairloch Project from the owners of the Gairloch Estate lands. The
Company has acquired exploration and developments rights for an initial
payment of GBP 347,000 and annual payments of GBP 69,000 beginning in year 6.
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 made a payment of $580,392 (GBP 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 GBP 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 GBP 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,
calculated according to standard industry terms and practices.
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, 2023 based on a risk-free discount rate of 1% (December
31, 2022 - 1%) and an inflation rate of 1.50% (December 31, 2022 - 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, 2023, the
estimated fair value of the liability is $599,498 (December 31, 2022 -
$582,441). Changes in the provision during the three months ended March 31,
2023 are as follows:
As at As at
March 31, December 31,
2023 2022
Decommissioning liability, beginning of period $ 582,441 $ 600,525
Accretion 2,596 10,154
Foreign exchange 14,461 (28,238 )
Decommissioning liability, end of period $ 599,498 $ 582,441
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, 2022 - GBP 300,000), of which GBP 300,000 was funded
as of March 31, 2023 (GBP 300,000 was funded as of December 31, 2022) and
reported as long-term deposit of $501,780 (December 31, 2022 - $489,660).
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,
2023 2022
Accounts payable $ 3,292,487 $ 2,528,245
Accrued liabilities 1,316,264 1,523,796
Total accounts payable and other liabilities $ 4,608,751 $ 4,052,041
The following is an aged analysis of the accounts payable and other
liabilities:
As at As at
March 31, December 31,
2023 2022
Less than 3 months $ 3,084,128 $ 2,939,972
3 to 12 months 712,969 412,168
12 to 24 months 157,196 61,247
More than 24 months (see also note 16) 654,458 638,654
Total accounts payable and other liabilities $ 4,608,751 $ 4,052,041
10. Financing Facilities
Amounts payable on the Company's financial facilities are as follow:
As at As at
March 31, December 31,
2023 2022
Melquart Limited
Financing facilities, beginning of period $ - $ -
Financing facility received (i) 580,392 -
Less bonus warrants issued (i) (16,984 ) -
Interest 8,502 -
571,910 -
G&F Phelps
Financing facility, beginning of period 4,836,267 4,247,488
Accretion 64,839 269,512
Interest 221,389 618,903
Repayment - (24,120 )
Foreign exchange adjustment 130,004 (275,516 )
5,252,499 4,836,267
Less current portion (5,252,499 ) (4,836,267 )
Financing facilities - non-current portion $ 571,910 $ -
(i) On February 13, 2023, the Company announced that it entered into a loan
agreement for $580,392 (GBP 347,000) with London-based family office Melquart
Limited ("Melquart"). The loan is to be used for the initial lease payment for
the Gairloch Project in Scotland. The loan is payable 24 months from the date
of the loan agreement and will bear interest at an annual rate of 12% payable
upon repayment of the loan. As at March 31, 2023, the amount of interest
accrued is $8,502 (GBP 5,083).
As consideration for providing the loan, Melquart received 100,000 warrants of
Galantas. Each bonus warrant are exercisable into one common share of Galantas
at an exercise price of $0.41, with said warrants expiring on February 13,
2025. The fair value of the 100,000 warrants was estimated at $16,984 using
the following Black-Scholes option pricing model with the following
assumptions: expected dividend yield - 0%, expected volatility - 97.54%,
risk-free interest rate - 3.47% and an expected average life of 1.90 years.
11. Share Capital and Reserves
a) Authorized share capital
At March 31, 2023, 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, 2023, the issued share capital amounted to $71,104,535. The
continuity of issued share capital for the periods presented is as follows:
Number of
common
shares Amount
Balance, December 31, 2021 74,683,801 $ 57,783,570
Exercise of warrants 7,838,000 4,093,100
Balance, March 31, 2022 82,521,801 $ 61,876,670
Balance, December 31, 2022 103,518,509 $ 69,664,056
Shares issued in private placement (i) 8,230,951 2,963,142
Warrants issued (i) - (1,284,806 )
Share issue costs (i) - (245,168 )
Exercise of warrants 14,000 7,311
Balance, March 31, 2023 111,763,460 $ 71,104,535
(i) On March 27, 2023, the Company closed a non-brokered private placement of
8,230,951 units at a price of $0.36 per unit for gross proceeds of $2,963,142.
Each unit consists of one common share of the Company and one common share
purchase warrant, with each warrant entitling the holder to purchase an
additional common share at a price of $0.55 per share until March 27, 2028.
The fair value of the 8,230,951 warrants was estimated at $1,284,806 using the
Black-Scholes option pricing model with the following assumptions: expected
dividend yield - 0%, expected volatility - 126.22%, risk-free interest rate -
2.96% and an expected average life of 5 years.
The Company paid the agents a cash commission equal to $130,966 and issued
237,162 non-transferable broker warrants of the Company. Each broker warrant
is exercisable to acquire one common share at an exercise price of $0.36 until
March 27, 2025. The fair value of the 237,162 warrants was estimated at
$40,175 using the Black-Scholes option pricing model with the following
assumptions: expected dividend yield - 0%, expected volatility - 99.18%,
risk-free interest rate - 3.61% and an expected average life of 2 years.
There is a 4-month hold period on the trading of securities issued in
connection with this offering.
Ocean Partners acquired 691,666 units for consideration of $249,000 and
Brendan Morris, and officer of the Company, acquired 468,416 units for
consideration of $168,630.
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, 2021 28,691,598 $ 0.39
Issued 250,000 0.50
Exercised (7,838,000 ) 0.40
Balance, March 31, 2022 21,103,598 $ 0.39
Balance, December 31, 2022 24,051,900 $ 0.45
Issued (notes 10(i), 11(b)(i) and 14(a)(iv)) 9,068,113 0.54
Exercised (14,000 ) 0.40
Expired (250,000 ) 0.50
Balance, March 31, 2023 32,856,013 $ 0.47
The following table reflects the actual warrants issued and outstanding as of
March 31, 2023:
Grant date Exercise
Number fair value price
Expiry date of warrants ($) ($)
May 14, 2023 14,396,231 1,763,087 0.40
July 25, 2023 125,000 23,000 0.48
December 31, 2023 780,000 274,883 0.33
August 30, 2024 820,000 144,464 0.45
January 31, 2025 500,000 65,527 0.55
February 13, 2025 100,000 16,984 0.41
February 28, 2025 7,666,669 1,644,859 0.55
March 27, 2025 237,162 40,175 0.36
March 27, 2028 8,230,951 1,284,806 0.55
32,856,013 5,257,785 0.47
11. Share Capital and Reserves (Continued)
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, 2021 4,885,000 $ 0.88
Expired (255,000 ) 1.35
Cancelled (205,000 ) 0.96
Balance, March 31, 2022 4,425,000 $ 0.85
Balance, December 31, 2022 6,152,500 $ 0.78
Cancelled (i) (177,500 ) 0.71
Balance, March 31, 2023 5,975,000 $ 0.78
(i) The portion of the estimated fair value of options granted in the current
and prior years and vested during the three months ended March 31, 2023,
amounted to $183,723 (three months ended March 31, 2022 - $350,539). In
addition, during the three months ended March 31, 2023, 177,500 options
granted in the prior years were cancelled (three months ended March 31, 2022 -
205,000 options cancelled).
The following table reflects the actual stock options issued and outstanding
as of March 31, 2023:
Weighted average Number of
remaining Number of options Number of
Exercise contractual options vested options
Expiry date price ($) life (years) outstanding (exercisable) unvested
April 19, 2023 1.10 0.05 25,000 25,000 -
February 13, 2024 0.90 0.87 85,000 85,000 -
June 27, 2024 0.90 1.24 100,000 100,000 -
May 19, 2026 0.86 3.14 3,685,000 2,456,667 1,228,333
June 21, 2026 0.73 3.23 425,000 283,333 141,667
August 27, 2026 0.86 3.41 20,000 13,333 6,667
May 3, 2027 0.60 4.09 1,635,000 545,000 1,090,000
0.78 3.33 5,975,000 3,508,333 2,466,667
12. Net Loss per Common Share
The calculation of basic and diluted loss per share for the three months ended
March 31, 2023 was based on the loss attributable to common shareholders of
$1,393,614 (three months ended March 31, 2022 - $1,415,812) and the weighted
average number of common shares outstanding of 103,893,399 (three months ended
March 31, 2022 - 78,556,743) for basic and diluted loss per share. Diluted
loss did not include the effect of 32,856,013 warrants (three months ended
March 31, 2022 - 21,103,598) and 5,975,000 options (three months ended March
31, 2022 - 4,425,000) for the three months ended March 31, 2023, 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, 2023 totalled approximately US$255,000
(CAD$419,169) (three months ended March 31, 2022 - US$219,000). 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,
2023 2022
Interest on related party loans (i) $ 173,665 $ 74,695
(i) Refer to note 14(a)(iii).
(ii) Refer to note 11(b).
(a) The Company entered into the following transactions with related parties
(continued):
(iii) As at March 31, 2023, the Company owes Ocean Partners $5,189,693
(December 31, 2022 - $4,978,069) which is recorded as due to related parties
on the unaudited condensed interim consolidated statement of financial
position.
March 31, December 31,
2023 2022
Balance, beginning of period $ 4,978,069 $ 2,444,376
Loan received - 2,062,693
Less bonus warrants - (74,000 )
Share issue costs - (93,444 )
Advance - 93,284
Repayment (6,500 ) (524,255 )
Accretion 43,697 391,128
Interest 173,665 554,073
Foreign exchange adjustment 762 124,214
Balance, end of period 5,189,693 4,978,069
Less current balance (5,189,693 ) (4,978,069 )
Due to related parties - non-current balance $ - $ -
(iv) In December 2022, the Company entered into an agreement (the "Trading
Agreement") with Ocean Partners, whereby Ocean Partners has sold on behalf of
Galantas call options on 6,000 ounces of gold at 500 ounces per month from
February 2024 to January 2025 at a strike price of US$1,775 per ounce for
proceeds of US$804,000 to Galantas (an option premium of US$134 per gold
ounce). Proceeds from the sale will be used to fund development of the
underground mining operations at the Omagh Gold Project in Northern Ireland
and working capital.
If the gold price during February 2024 to January 2025 is at or below US$1,775
per ounce, Galantas will receive the price of gold at the time for the sale of
its gold produced. If the gold price is above US$1,775 per ounce, Galantas
will receive US$1,775 per ounce in revenue for the sale of its gold.
Pursuant to the Trading Agreement, and in return for Ocean Partners
facilitating the call option sale and agreeing to maintain all margin
requirements on Galantas' behalf, which Galantas has determined has a value of
at least $150,000, Galantas has agreed to grant 500,000 warrants to Ocean
Partners at an exercise price of $0.55 expiring on January 31, 2025. The
warrants are subject to a hold period under applicable securities laws and the
rules of the TSXV. The fair value of the 500,000 warrants was valued at
$65,527 using the following Black-Scholes option pricing model with the
following assumptions: expected dividend yield - 0%, expected volatility -
97.85%, risk-free interest rate - 3.73% and an expected average life of 1.9
year.
As at March 31, 2023, balance related to the Trading Agreement is recorded as
other liability on the unaudited condensed interim consolidated statement of
financial position is $1,021,819 (December 31, 2022 - $1,085,426).
(b) Remuneration of officer and directors of the Company was as follows:
Three Months Ended
March 31,
2023 2022
Salaries and benefits ((1)) $ 113,334 $ 107,583
Stock-based compensation 141,231 250,310
$ 254,565 $ 357,893
((1)) Salaries and benefits include director fees. As at March 31, 2023, due
to directors for fees amounted to $105,000 (December 31, 2022 - $70,000) and
due to officers, mainly for salaries and benefits accrued amounted to $86,672
(December 31, 2022 - $24,465), and is included with due to related parties.
(c) As at March 31, 2023, Ross Beaty owns 3,744,748 common shares of the
Company or approximately 3.4% of the outstanding common shares. Premier Miton
owns 4,848,243 common shares of the Company or approximately 4.3%. Melquart
owns, directly and indirectly, 28,140,195 common shares of the Company or
approximately 25.2% of the outstanding common shares of the Company. G&F
Phelps owns 5,353,818 common shares of the Company or approximately 4.8%. Eric
Sprott owns 10,166,667 common shares of the Company or approximately 9.1%.
Mike Gentile owns 6,217,222 common shares of the Company or approximately
5.6%. The remaining 47.6% 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 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, 2023 United Kingdom Canada Total
Current assets $ 853,269 $ 3,314,356 $ 4,167,625
Non-current assets $ 29,189,571 $ 883,580 $ 30,073,151
Revenues $ - $ - $ -
December 31, 2022 United Kingdom Canada Total
Current assets $ 1,659,045 $ 1,273,833 $ 2,932,878
Non-current assets $ 27,271,081 $ 139,741 $ 27,410,822
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 $508,955 (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.
17. Events After the Reporting Period
(i) The Company has entered into an agreement to acquire the historical
Gairloch drill and exploration database for (i) a payment of $420,000
(approximately GBP 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 TSXV) and (ii) GBP 50,000 in
cash. On April 13, 2023, the Company issued 933,334 common shares per terms of
the agreement.
(ii) On April 19, 2023, 25,000 stock options with exercise price of $1.10
expired unexercised.
(iii) On April 26, 2023, the Company agreed to the terms of a proposed
shares-for-debt transaction with several additional arm's length creditors of
the Company and agreed to settle a total of approximately $749,020 of
indebtedness through the issuance of an aggregate of 2,080,609 units a deemed
price of $0.36 per unit. Each unit consists of one common share of the Company
and one common share purchase warrant, with each warrant entitling the holder
to purchase an additional common share at a price of $0.55 per share until
April 26, 2028. The securities pursuant to the debt settlement will be subject
to a four-month hold period under applicable Canadian securities laws.
(iv) On May 14, 2023, 14,332,231 warrants with an exercise price of $0.40
expired unexercised.
(v) Subsequent to March 31, 2023, 64,000 warrants were exercised for gross
proceeds of $25,600.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END QRFNKCBQFBKDOPBRecent news on Galantas Gold
See all newsREG - Galantas Gold Corp - HISTORIC LOAN ADVANCES
AnnouncementREG - Galantas Gold Corp - Results for the year ended 31 December 2024
AnnouncementREG - Galantas Gold Corp - RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2024
AnnouncementREG - Galantas Gold Corp - RESULTS FOR THE 3 AND 6 MONTHS ENDED JUNE 30, 2024
AnnouncementRCS - Galantas Gold Corp - Planned Solar Power Generation Facility At Omagh
Announcement