August 11th, 2010 Galantas Gold Corporation (the Company) has received provisional production statistics for the second quarter (April through June) of 2010 from its wholly owned subsidiary, Omagh Minerals Limited (OML). OML operates the only gold mine in Ireland producing and selling a flotation concentrate containing gold, silver and lead.
April's shipments were 93.1 wet tonnes of concentrate. May saw 86.1 wet tonnes shipped, with 164.8 tonnes shipped in June – for a total of 344 wet tonnes (325 dry tonnes) in the quarter. While definitive estimates of the metal content of the concentrate awaits receipt of final and agreed assays, it is anticipated that shipments in the second quarter contained approximately 41.88 kg (1,347 troy ounces) of gold, 109.00 kg (3505 troy ounces) of silver and 45.47 tonnes of lead. Production in the second quarter at 1471 troy ounces gold equivalent (at May prices) was some 75% of production in the preceeding quarter. Although this was disappointing it was a reflection of earlier working capital deficiencies and geological and operational factors noted below. Plant throughput during the second quarter 2010 rose to approximately 10,602 tonnes of ore at a head grade of 3.19 g/t gold compared to the second quarter of 2009 when 8,344 tonnes of ore were produced at an average grade of 6.1 g/t gold. Average concentrate grades for the second quarter increased to approximately 128.9 g/t gold, 335.4 g/t silver and 14% lead against the second quarter 2009 of 89.0 g/t gold, 268.3 g/t silver and 13.3 % lead.
Mining operations concentrated in a northerly direction on the Kearney vein, removing an approximate combined total of peat, till and waste rock of 307,870 m³ . The average process plant head grade for the quarter reduced due in part to mining through a wide fault zone of severely fractured psammite and schist. Additionally a trial operation of the processing plant was conducted on a lower than previous cut-off head grade of ore (1.6g/t versus 3g/t gold). The geological change and the process plant trial both led to a reduction in output for the quarter. The trial was a technical success in that it demonstrated that lower grade material could be processed satisfactorily in volume. A number of pinch points and improvements have been identified in the processing circuit to increase throughput. These are being systematically addressed.
A total of 17,834 man hours were worked with zero accidents reported and the number of employees on the mine averaged 43 during the quarter.
The total of invoiced provisional concentrate sales for the period is estimated at sterling £983,233. The production, metal weights and sales figures are provisional and subject to averaging or umpiring provisions under the terms of the concentrate off-take contract with Xstrata Corporation as detailed in a press release dated 3rd October, 2007. The financial results for the quarter are expected to be published in the usual timeframe by the end of August, 2010.
Overburden stripping on Kearney continued during the quarter, with further stripping being carried out on the Kerr Vein. A small quantity of Kerr ore has been mined and blended with feed from the Kearney vein. The shortage of working capital has been ameliorated by a private placing (disclosure dated 8th June 2010).
Ore production has increased markedly since quarter end. Process plant improvements have been put in hand and it is noted that performance over the 2 weeks prior to 12th July 2010 was an average of 72.07 wet tonnes of concentrate per week. This is record production at the mine and equates to around 287 troy ounces gold equivalent for that 2 week period. Production is hampered in the short term by an unreliable Nord ball mill gearbox (purchased new). A new substitute gearbox has been ordered from an alternate supplier but will not be delivered for 4 weeks. In the meantime, production will be restricted due to the reduced capacity of a smaller ball mill that has been temporarily deployed.
This disclosure has been reviewed by Richard Crew, (General Manager), a qualified person under the meaning of N.I. 43-101, who is responsible for the production related technical information in this disclosure. Leo O’Shaughnessy is responsible for the financial information. The information is based upon local production and financial data prepared under their supervision, though some information is drawn from data prepared before Mr.Crew’s tenure commenced.
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; mining operational risk; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign involvement; speculative nature of gold exploration; dilution; competition; loss of key employees; additional funding requirements; planning and other permitting issues; and defective title to mineral claims or property. These factors and others that could affect Galantas’s forward-looking statements are discussed in greater detail in the section entitled “Risk Factors” in Galantas’ Management Discussion & Analysis of the financial statements of Galantas and elsewhere in documents filed from time to time with the Canadian provincial securities regulators and other regulatory authorities. These factors should be considered carefully, and persons reviewing this press release should not place undue reliance on forward-looking statements. Galantas has no intention and undertakes no obligation to update or revise any forward-looking statements in this press release, except as required by law.
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