Galantas publishes 2011 Accounts & Trading Update
GALANTAS GOLD CORPORATION
TSXV & AIM : Symbol GAL
GALANTAS REPORTS RESULTS FOR THE YEAR ENDED DECEMBER 31, 2011
April 16th, 2012 : Galantas Gold Corporation (the ‘Company’) is pleased to announce its annual financial results for the Year Ended December 31, 2011. These financial results, together with the comparatives for the Year Ended December 31, 2010 are being reported for the first time under International Financial Reporting Standards (“IFRS”) which replaces Canadian General Accepted Accounting Policies, effective January 1, 2011 for all publically accountable enterprises in Canada.
All in CDN$
Year Ended December 31
|Revenue||$ 9,492,157||$ 6,831,410||38.9%|
|Cost Of Sales||$ 4,860,427||$ 4,032,757||20.5%|
|Income before the under-noted||$ 4,631,730||$ 2,798,653||65.5%|
|Amortisation||$ 837,068||$ 762,422||9.8%|
|General administrative expenses||$ 2,263,741||$ 1,184,050||91.1%|
|Foreign exchange (gain) loss||$ (80,069)||$ 101,981||-|
|Net Income for the year||$ 1,610,990||$ 750,200||114.7%|
|Working Capital Deficit||$ 536,142||$ 292,336||-|
|Cash generated from operating activities after changes in non-cash working capital||$ 3,339,617||$ 1,183,905||182.1%|
|Cash at December 31, 2011||$4,240,081||$2,661,798||59.3%|
Production at the Omagh mine during the year ended December 31, 2011 was above production levels of both 2010 and earlier years with record production levels being achieved during the second quarter. The increased production level of 7,308 ounces of gold equivalent (2010: 6,402 ounces of gold equivalent), combined with the improved price of gold, accounted for the 38.9% increase in Revenue. Gold prices averaged $1,568 per oz in 2011 (2010: $1,225 per oz). Costs of sales increased by 20.5% to $4,860,427 (2010:$4,032,757), primarily due to increased fuel costs, repair and servicing costs.
Year Ended December 31
|Average Grade g/t gold||4.46||4.74|
|Dry Tonnes Concentrate||2,265||1,500|
|Concentrate Gold Grade (g/t)||88.9||119.2|
|Gold Produced - kg (troy ozs)||201.5 kg (6,479oz)||177.2 kg (5,696oz)|
|Concentrate Silver Grade (g/t)||234.0||338.2|
|Silver Produced kg (troy ozs)||531.3 kg (17,082oz)||505.9 kg (16,267oz)|
|Lead Produced (tonnes)||280.1||251.2|
|Gold Equivalent ( troy.ozs)||7,308||6,402|
The main mine production focus during the year has been on the open pit mining of the Kearney and Kerr veins. Despite production in early 2011 being impeded by very poor weather conditions, production at the Omagh mine during the year ended December 31, 2011 was above production levels of both 2010 and earlier years with record production levels being achieved during the second quarter. However, mining from the Kearney pit was restricted during the second half of 2011 due to limitations in the disposal of surplus rock which had been stockpiled over a period of time, which resulted in additional ore being mined from other lower grade areas. Whilst the mine is required under its planning permission to dispose of the surplus rock, the consent to transport the surplus rock offsite from the current stockpile was not (at that time) confirmed from the relevant local authority. This has resulted in the level of stockpiled surplus rock now being at capacity levels which has and will have a significant adverse impact on production from the Kearney open pit going forward. Because of this risk to current and future production levels, discussions commenced with employees at the Omagh mine during 2011 with regards to a number of redundancies which are expected to be in place in early 2012, with some already completed in the first quarter of 2012. Subsequent to December 31, 2011 Omagh Minerals Limited obtained confirmation of planning permits to transport the surplus rock offsite to be integrated into the local aggregates industry. However, due to the conditions attached to the permit it will be some months before the transportation of this rock can commence. This will result in lower grade material being worked in 2012 which will result in both revenues and cash generation being reduced during 2012. Because of this ongoing restriction in mining, together with the positive assay results from the drilling program, it is likely that future increases in production from the lower levels will not be achieved until mining commences from the planned underground mine.
The mill refurbishment and upgrade program, which commenced in the fourth quarter of 2010 was completed in the second quarter of 2011. Tonnes milled during the year ended December 31, 2011 increased by 29.2% to 46,871 tonnes (2010: 36,288 tonnes) and concentrate production for 2011 increased by 51% to 2,265 dry tonnes (2010: 1,500.2 dry tonnes).
During 2011, the Omagh Mine and Processing plant operated safely and had zero lost-time accidents. It also operated within the strict environmental guidelines laid down by the regulating authorities. A detailed check was carried out by the Northern Ireland Environment Agency, which supported regular monitoring results and confirmed compliance with environmental standards.
During 2011 the focus of exploration work has moved from mining geology to exploration based activities. Following both the receipt of loan funds in the first quarter and the improved financial results in the second quarter, the 2,000 metre diamond drilling program was expanded up to a 15,000 metre program, utilising four rigs, with a fifth rig being added at the end of 2011. During the year, 4,148 metres of exploration drilling was completed, with 42 holes being drilled. There were 31 holes drilled on the Joshua vein, 8 holes on the Kearney vein and 3 on the Kerr vein. Subsequent to December a sixth rig commenced drilling on the property and as of mid March a total of 6,373 metres (53 holes) had been drilled in the 15,000 drilling program.
Drilling on the Kearney vein was carried out at depth with the objective of gaining a more accurate picture of the zone of mineralization for the purpose of underground development. Channel sampling was also carried out on the Joshua and Kerr vein systems with the focus being mainly on Joshua due to higher grades and widths of mineralization. Assay results released to date from both the drilling and channel sampling program have been encouraging with significant gold intersections being identified.
In March 2012 the Company engaged ACA Howe International Ltd to provide an interim updated resource estimate for the Omagh mine to be prepared in accordance with Canadian National Instrument (NI) 43-101 standard which will estimate all resources discovered to early April in the current drilling program. This report is expected to be published during the second quarter of 2012 and will also address the underground mining scoping study currently underway at the Omagh mine. The drilling program will continue beyond April and a second interim report is expected to be prepared during the fourth quarter of 2012.
Galantas continues with exploration outside the mine, and in early 2011 an area licence OM4 covering an area of 252 square kilometres was granted for a two year period. This licence area covers most of the previous OM2 license area and the northern section of the OM3 license area both of which had lapsed in 2010. Fieldwork was carried out within three areas of the OM4 license during the fourth quarter of 2011. In addition an application was made for four exploration licenses in the Republic of Ireland, covering an area of 160 square kilometres, that forms a westerly extension to the existing OM4 license, which was subsequently granted in March 2012. A publicly funded geochemical and geophysical program is presently being carried out in these border areas and it is anticipated that the Omagh Minerals will benefit from the additional data.
Discussions with the regulatory authorities in Northern Ireland continued during the year with regard to obtaining approval for the closure plan, which approval was granted in the first quarter of 2012. During the fourth quarter four planning applications were submitted to the planning service authorities, two of which were in connection with proposals to drill boreholes to determine mineralization at depth on the Kearney and Joshua veins. The remaining two were in connection with the construction and renovation of passing bays for the removal of surplus rock and the construction of a lower portal structure and truncated adit for underground mining on the Kearney vein. Further progress was made on both the underground development plans and the surface infrastructure development plans during the year. The underground mine plan is being finalised with a pre consultation exercise in place and an Environmental Impact Assessment being completed.
Roland Phelps, President & CEO, Galantas Gold Corporation, commented, “Solid results from the drilling program are supporting continued investment in the Omagh Mine. Subject to the results of the upcoming Howe report, the focus of operations in 2012 is expected to be directed towards achieving all that is necessary to establish an underground operation. Working with local representatives and the Planning Service, we expect to satisfy any issues arising from the upcoming planning application.”
The detailed results and Management Discussion and Analysis (MD&A) are available on www.sedar.com and 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. Some of the production and metal figures are provisional and subject to averaging or umpiring provisions under the concentrate off-take contract with Xstrata Corporation detailed in a press release dated 3rd October 2007.
The financial components of this disclosure has been reviewed by Leo O’ Shaughnessy (Chief Financial Officer) and the production components by Richard Crew (Chief Operating Officer), 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’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.
Galantas Gold Corporation Issued and Outstanding Shares total 235,650,055.
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.
Galantas Gold Corporation
Jack Gunter P.Eng – Chairman Investor Relations Consultant
Roland Phelps C.Eng – President & CEO Courtenay Heading (Maclir Consulting Ltd)
Email: firstname.lastname@example.org Email : c.heading@Galantas.com
Website: www.galantas.com Telephone : (UK) +44 (0) 7624 424 455
Telephone: +44 (0) 2882 241100
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Telephone +44 (0)20 7149 6000