Financial Highlights Highlights of the 2018 audited annual results, which are expressed in Canadian Dollars, are summarized below: Year Ended December 31 All in CDN$ 2018 2017 Revenue $ 71,243 $ 35,308 Cost of Operations $ (185,058) $ (225,451)
Galantas Reports Results for the Year Ended December 31, 2018
TORONTO, April 18, 2019 -- Galantas Gold Corporation (the ‘Company’) is pleased to announce its audited annual financial
results for the year ended December 31, 2018. A copy of the Annual Report and Accounts will be sent to shareholders shortly
and are available on the Company's website at https://www.galantas.com/investors/financial-statements .
Financial Highlights
Highlights of the 2018 audited annual results, which are expressed in Canadian Dollars, are summarized below:
Year Ended December 31
All in CDN$ 2018 2017
Revenue $ 71,243 $ 35,308
Cost of Operations $ (185,058) $ (225,451)
Loss before the items below $ (113,815) $ (190,143)
Aggregates levy $ (352,168) -
Depreciation $ (350,999) $ (203,431)
General administrative expenses $ (2,131,872) $ (1,714,264)
Unrealized gain on fair value of derivative financial liability $ 10,000 $ 14,000
Foreign exchange gain $ 53,417 $ 15,699
Net loss for the year $ (2,885,437) $ (2,078,139)
Working Capital (Deficit) $ (272,783) $ (3,492,608)
Cash loss generated from operations before changes in non-cash working capital $ (1,848,019) $ (1,357,221)
Cash at December 31, 2018 $ 6,188,554 $ 779,758
The Net Loss for the year ended December 31, 2018 amounted to $ 2,885,437 (2017: $ 2,078,139) and the cash outflow from
operating activities before changes in non-cash working capital for the year ended December 31, 2018 amounted to $
1,848,019 (2017: $ 1,357,221).
The Company had a cash balance of $ 6,188,554 at December 31, 2018 compared to $ 779,758 at December 31, 2017. The
working capital deficit at December 31, 2018 amounted to $ 272,783 compared to a working capital deficit of $ 3,492,608 at
December 31, 2017.
Galantas completed two private placements during 2018. During the third quarter Galantas completed a private placement of
shares on a part-brokered basis for aggregate gross proceeds of $ 1,571,771 (approximately UK£ 929,780). The placement
comprised of the issue of 22,137,619 common shares of no par value. United Kingdom placees subscribed for a total of
17,416,667 shares at a price of UK£ 0.042 per share. Canadian placees subscribed for a total of 5,720,952 shares at a price of
$ 0.071 per share. In the fourth quarter Galantas completed an additional private placement of shares on a part-brokered basis
in two parts for aggregate gross proceeds of $ 6,900,000 (approximately UK£ 4,000,000). The placement comprised of the
issue of 80,000,000 common shares of no par value. United Kingdom placees subscribed for a total of 75,200,000 shares at a
price of UK£ 0.05 per share. Canadian placees subscribed for a total of 4,800,000 shares at a price of $ 0.08625 per share.
The net proceeds raised from both placements are for both working capital purposes and the continued underground
development at the Omagh gold mine. In addition under a shares for debt arrangement, Mr. Roland Phelps, President & CEO
of Galantas Gold Corporation, following TSXV and shareholder approvals exchanged 10,000,000 common shares for debt owed
to him for past management fees, in the amount of £500,000 (CAD $862,500) at £0.05 (CAD $0.08625) per share. Additional
loan advances from G&F Phelps Ltd, a related party, during 2018 totaled $ 883,128 (UK£ 506,410).
During the second quarter Galantas announced that its operating subsidiary, Flintridge Resources Ltd. had signed a
concentrate sales agreement together with a loan facility agreement for US$ 1.6 million (CDN$ 2.012 million) with Ocean
Partners UK Ltd. a United Kingdom based company, together with an increased, on-demand loan facility of UK£ 600,000 with
G&F Phelps Ltd. The loans are to be used for further development of the Omagh Mine and working capital. As consideration
for the US$ 1.6 million loan facility Ocean Partners received 15,000,000 bonus warrants of Galantas which will be exercisable
into one common share of Galantas at an exercise price of $ 0.1575 per bonus warrant. The bonus warrants have a maximum
life of two years and the bonus shares will be subject to an initial four month plus one day hold period from the date of
issuance of the bonus warrants. No bonus warrants were issued in respect of the G&F Phelps loan facility.
Permitting
During the fourth quarter of 2018, the Company announced that the Court of Appeal has delivered a positive judgement in
regard to an appeal against the Company's planning consent. The Court has determined that the appeal has failed and thus
the planning consent is confirmed.
Production/Mine Development
The Omagh gold mine commenced limited production of gold concentrate during the third quarter of 2018 from feed produced
in the development of the Kearney vein. During the fourth quarter Galantas reported that delivery had been made of the first
consignment of concentrate derived from underground feedstock at the mine.
The granting of planning consent in 2015 for an underground operation at the Omagh site permits the continuation and
expansion of gold mining. 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 will allow for rapid expansion of production as
additional capital becomes available. The main underground decline has been driven at a size to accommodate 30 tonne mine
trucks, which would be required to service a larger production rate and minimise haulage costs.
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, tunnelling continued throughout the remainder of 2017 and 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 in mid 2018 at approximately a right angle and exposed the vein to be
approximately 2.8 metres wide at that point. A horizontal development tunnel was driven on vein, at this level, in both
directions during the third quarter, beneath a safety (Crown) pillar which resulted in limited feed to the mill during the third
quarter. While the decline continued to be progressed during the fourth quarter the main focus was on the construction and
completion of a second means of egress / escapeway. The decline continues to be progressed with further cross-cuts planned
to access to lower levels of vein development which will form the development necessary to demarcate production panels. The
increased number of development headings is expected to provide an enhanced supply of mill feed. As of March 26, 2019 the
company reported that operations have commenced on the third level (1072 level) of the mine.
The underground development, using drill and blast techniques, is being carried out by an in-house crew which is trained in
safety and operating procedures. An in-house, mines rescue team has also been trained and equipped.
New drilling equipment has been acquired on a rental basis, with options to purchase, and has led to a marked improvement in
advance rates. In addition, a new 3.6t capacity load-haul-dump unit has been acquired on a rental purchase basis which will
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. Further equipment purchases are under negotiation.
Environmental monitoring by the regulatory authorities continues to demonstrate compliance with the standards imposed.
Safety is a high priority and the zero lost time accident rate, since the start of underground operations, continues.
The mine processing plant commenced operating on limited feed from the development of in-vein drivages of the Kearney gold
vein. The processing plant, which was used formerly for open-pit operations, has recently had the benefit of a recent upgrade
to some sections and further upgrades are planned. Recent analyses suggest that the product from the plant meets quality
criteria and operates at a high efficiency. The plant is expected to operate part-time until the supply of mill feed increases.
Post year-end (26 th March 2019), the company announced that it expected to add a second milling shift late in the second
quarter of 2019 and additional shift in the third quarter to process anticipated increases in the supply of mill feed.
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.
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 and AIM Rules. 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
Jack Gunter P.Eng – Chairman
Roland Phelps C.Eng – President & CEO
Email: [email protected]
Website: www.galantas.com
Telephone: +44 (0) 2882 241100
Grant Thornton UK LLP (Nominated Adviser)
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