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Galantas announces Omagh gold mine development on hold

GALANTAS GOLD CORPORATION

TSXV – AIM “GAL”

DEVELOPMENT OF OMAGH GOLD MINE ON HOLD  

24th April 2017 Galantas Gold Corporation (“Galantas” or the “Company”) has received notification that the Police Service of Northern Ireland (“PSNI”) will not provide its required anti-terrorism cover in regard to blasting operations required for mine development at the Omagh Gold Mine.

The PSNI requires that it supervises transportation and use of certain rock breaking materials and explosives at the Omagh Gold Mine. This is due to the potential terrorist use of those materials and is a requirement of PSNI specific to Northern Ireland. The PSNI provide anti-terrorist cover for the transportation and use of blasting materials throughout Northern Ireland. Explosives are widely used in quarries and one other operating underground mine. The Company understands that no charges are made to the quarries or the other operating underground mine in Northern Ireland for PSNI anti-terrorism cover.

The Company has been told that, due to PSNI resource constraints and competing priorities, PSNI is currently only prepared to provide anti-terrorism cover for a maximum of a 2 hour period, 2 days per week. It will also require a cost recovery agreement. Two, 2 hour periods per week is insufficient to sustain the development or operation of the Omagh Gold Mine.

The Company disagreed with the principle of costs recovery for anti-terrorism policing but advised PSNI that the Company was prepared to enter into a costs recovery agreement, without prejudice to its legal remedies in that respect, for a 2 hour period, 5 days per week. Although PSNI provided the costs analysis for the 5 day and 2 hour period anti-terrorism cover, which was agreed without prejudice, the PSNI has refused to provide the cover, citing competing priorities. The Company has been advised that others have recently been provided in excess of this amount of anti-terrorism cover and without a cost recovery agreement. The Company has sought to discuss the issue at the highest levels of command in PSNI and the Northern Ireland Office but engagement has so far been declined.

The Company whole-heartedly supports PSNI and its officers in its laudable objective of maintaining peace, law and order in Northern Ireland in difficult circumstances.  However, the Company believes it is improper of PSNI to act in a discriminatory manner against a lawful business. The Company has been given no alternative other than to pursue its legal options, which may include seeking substantial compensation for the costs of delays.

The Omagh Gold Mine has an operational processing plant and tailings facility with an excellent environmental record. The plant uses a non-toxic, froth flotation process, without the use of cyanide or mercury and produces a gold concentrate which is exported for smelting. The remaining tailing sands are clean and free from acid drainage. The plant is on stand-by awaiting ore from underground development. The underground mine development expected to create 130 jobs plus others in service industries associated with the development.

Discussions, in regard to potential redundancies, with mine personnel recently hired for the development, are taking place. New hiring and the current investment program has been deferred.

Roland Phelps, President & CEO, Galantas Gold Corporation said, “The PSNI’s decision is clearly a blow to any proposed mine development in Northern Ireland and negatively affects the livelihoods of our employees and their families. The Company pays full UK taxes, royalties and mineral license fees. A cost benefit analysis of PSNI providing the required anti-terrorism cover required by PSNI is hugely to the state’s benefit - not that this is any reason to allow a potential terrorist threat to interfere with any citizen’s lawful rights or business.”

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.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Enquiries : Galantas Gold Corporation
L. Jack Gunter P.Eng – Chairman,  Roland Phelps C.Eng – President & CEO

Email: info@galantas.com  Telephone: (UK) +44 (0) 2882 241100

Website: www.galantas.com 

 

Grant Thornton UK LLP (Nomad)

Philip Secrett, Richard Tonthat: Telephone: +44(0)20 7383 5100

 

Whitman Howard  Ltd (Broker & Corporate Adviser)

Nick Lovering, Grant Barker: Telephone: +44(0)20 7659 1234

Share Price

TSX-V (CDN $): 0.08

AIM (£ p): 5.25

Gold Price (oz)

USD : 1,277.80

GBP : 969.08

The figures presented here are for informational purposes of current trends only and should not be considered an exact count

This page and other parts of the website contain statements relating to the intentions of the management to develop mine production and jewellery production. Such statements are forward looking and readers are cautioned that these statements are subject to risk and uncertainties as further detailed in quarterly Management Discussion and Analysis published on www.sedar.com

Approved for website uploading : R.Phelps