Galantas reports H1 & Q2 2018 Financials and MD&A


TSXV & AIM: Symbol GAL



August 28, 2018: Galantas Gold Corporation (the ‘Company’) is pleased to announce its financial results for the Three and Six Months ended June 30, 2018.


Financial Highlights

Highlights of the 2018 second quarter’s and first six month’s results, which are expressed in Canadian Dollars, are summarized below:


All figures denominated in Canadian Dollars (CDN$)


Second Quarter Ended

June 30


      2018                     2017


                Six Months Ended

June 30


      2018                           2017


$      57,040

$       16,607

$       57,040

     $     19,341

Cost of Sales

$    (34,150)

$      (111,605)

$       (58,216)

$  (175,021)

Income (loss) before the undernoted

$    22,890

$      (94,998)

$        (1,176)

 $  (155,680)


$      (77,980)

$      (50,887)

$    (142,229)

$   (90,942)

General administrative expenses 

$    (616,153)

$    (497,235)

$    (1,025,043)

$ (999,351)

Unrealized gain on fair value of derivative financial liability

   $                0

$      28,000

$        10,000

      $      6,000

Foreign exchange gain / (loss)

$       (29,267)

$    103,244

$     (66,560)

$    43,863)

Net Loss for the period

$  ( 700,510)

$     (511,876)

$  (1,225,008)

$ (1,196,110)

Working Capital Deficit

$ (5,252,685)

$ (2,328,303)

$ (5,252,685)


Cash loss from operating activities before changes in non-cash working capital

$ (429,920)

$    (404,783)

$   (762,340)

$  (799,382)

Cash at June 30, 2018

$  732,603

    $   1,681,739

$  732,603

$ 1,681,739


The Net Loss for the three months ended June 30, 2018 amounted to CDN$ 700,510 (2017: CDN$ 511,876) and the cash loss from operating activities before changes in non-cash working capital for the second quarter of 2018 amounted to CDN$ 429,920 (2017 Q2: CDN$ 404,783). The Net Loss for the six months ended June 30, 2018 amounted to CDN $ 1,225,008 (2017:CDN$ 1,196,110) and the cash loss from operating activities before changes in non-cash working capital for the first six months of 2018 amounted to CDN$ 762,340 (2017: CDN$ 799,382).

The Company had cash balances of $ 732,603 at June 30, 2018 compared to $ 1,681,739 at June 30, 2017. The working capital deficit at June 30, 2018 amounted to $ 2,328,303 compared to a working capital deficit of $ 2,328,303 at June 30, 2017.

There were no financing activities during the first half of 2018. Additional loan advances from G&F Phelps Ltd, a related party, during the six months totaled $ 549,193 (UK£ 316,410). During the second quarter Galantas announced that its operating subsidiary, Flintridge Resources Ltd. had signed a concentrate pre-payment agreement and a loan facility agreement for US$ 1.6 million (CDN$ 2.012 million) with Ocean Partners UK Ltd., together with an increased, on-demand loan facility of £600,000 with G&F Phelps Ltd. (See press release dated April 12, 2018 for further details).



In November 2017, Galantas reported that it had received notice of an application, by a third party, to the Court of Appeal, in relation to a positive judicial review judgment regarding the grant of planning permission. This was subsequently heard in February 2018. The Court will deliver its judgement at a later date, currently unknown but indicated for September 2018.


Production/Mine Development

Production of flotation concentrate at the Omagh mine from development ore restarted in the third quarter of 2018. The granting of planning consent in 2015 for an underground operation at the Omagh site, now subject to the result of a judicial review appeal, permits the continuation and expansion of gold mining, following the exhaustion of accessible resources available to the previous open pit operation. The underground mine, which is in active development, will utilize the same processing methods and the processing plant has received a partial upgrade. The strategy is to establish the underground mine and look for further expansion of gold resources on the property, which has many undrilled targets.

The phased development arrangement, in terms of mine access dimensions, is expected to allow for rapid expansion of production as additional capital becomes available.

Underground development of a decline tunnel, located at the base of the existing open pit, commenced in the first quarter 2017. After over-coming initial difficulties, tunneling continued through 2017 and to date in 2018. A detailed plan is being implemented to accelerate progress in line with the planning consent. The main decline tunnel descends at a slope of 1 in 7, from near the base of the former Kearney open pit. A horizontal west to east access tunnel driven from the decline tunnel intersected the north / south Kearney vein during June at approximately a right angle and has exposed the vein to be approximately 2.8 metres wide at that point. The vein intersection is located some 15 metres below the base of the Kearney open-pit. A horizontal development tunnel is planned to be driven on vein, at this level, in both directions, beneath a safety (Crown) pillar which will initially provide limited feed to the mill in the third quarter. The decline tunnel is planned to be extended in depth, along with construction of a second means of egress. The decline is planned to provide access to lower levels and permit stoping between the first two horizontal levels in late 2018 or early 2019. Stoping operations are expected to provide an enhanced supply of mill feed. The underground development, using drill and blast techniques, is being carried out by an in-house crew which is fully trained in safety and operating procedures. An in-house, mines rescue team has also been trained and equipped.

Whilst the present drilling and loading equipment, which was purchased for training and early tunnel development purposes, is performing above expectations it has lower productivity when compared with current technology. New drilling equipment has been acquired on a rental basis, with options to purchase, and is expected to improve advance rates significantly. A substitute tunneling drill rig has been available on rental to cover delays in manufacture. The interim rig has led to a significant improvement in advance rate. In addition a new 4t capacity load-haul-dump unit, has been ordered on a rental purchase basis. This is expected to improve productivity in loading operations from the smaller cross-section vein drives. It is equipped with radio remote control which enhances safety in stope mucking operations. Delivery is expected in September 2018. Further equipment purchases are under negotiation.

Environmental monitoring continues to demonstrate compliance with the standards imposed by the regulatory authorities. Safety is a high priority and the zero lost time accident rate, since the start of underground operations, continues.

The detailed results and Management Discussion and Analysis (MD&A) are available on and 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.

The Annual General and Special Meeting of the Company was held at Thursday, June 28, 2018 at 11:00 a.m. (Toronto time) at the registered office of the Company, DSA Corporate Services Inc. 82 Richmond Street East, Toronto, Ontario, M5C 1P1.


Qualified Person

The financial components of this disclosure has been reviewed by Leo O’Shaughnessy (Chief Financial Officer) and the production, exploration and permitting components by Roland Phelps (President & CEO), 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 anticipated production and development projections, 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.

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

Roland Phelps C.Eng – President & CEO



Telephone: +44 (0) 2882 241100


Grant Thornton UK LLP (Nomad)

Philip Secrett, Richard Tonthat.

Telephone: +44(0)20 7383 5100


Whitman Howard Ltd (Broker & Corporate Adviser)

Ranald McGregor-Smith, Nick Lovering

Telephone: +44(0)20 7659 1234