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Galantas hopes to strike gold literally with Omagh mine

Shares in Galantas are up over 63% since the beginning of January
Galantas hopes to strike gold literally with Omagh mine
The Omagh mine is Ireland's only gold mine

Northern Ireland isn't exactly known for its gold mining industry but one small company hoping to change that is Toronto and London listed Galantas Gold Corp (LON:GAL,CVE:GAL).

A look at the recent share chart shows the momentum, with the shares are up over 63% since the beginning of January.

Further interest has been sparked by a positive cash call last month, which was oversubscribed and brought in almost C$1.466mln. 

Taking part was legendary mining financier and investor Ross Beatty, who acquired over 12.8mln shares for C$1.01mln and now owns over 28mln shares in the miner, or almost 21%.

Funds raised should clearly see the company through its main operational focus for the rest of 2016, which is centred on exploration and legal matters.

Ireland's only gold mine

Mining is suspended at the moment at the firm's Cavanacaw mine, on which the group is focused but the potential game-changer moment came last summer, when the firm received the long-awaited planning consent to build an underground mine on the site.

The open pit operations had only recently ceased at the mine, which lies three miles outside Omagh in County Tyrone and 1.5hrs drive west of Belfast.

The overall project area under licence has been expanded to 766.5 sq km.

It's not the only gold player in an area, gaining attention. Next door is the Curraghinalt project near Omagh and the village of Gortin, which is being developed by the much larger  Dalradian Resources Inc (LON:DALR, TSX:DNA), which is now moving towards a production decision.

Metallurgical tests, part of the feasibility study, showed that gold recoveries over 94% are achievable with a simply processing circuit.

The resource, of 2.1mln ounces in the measured and indicated category,  consists of 16 separate narrow veins

So what's on offer?

Galantas has previously revealed it has identified around 500,000 ounces of the yellow metal with around 32,000  ounces in the highest confidence measured category. The previous open pit mine generated about a tonne of gold.

The miner said it would be looking to develop a "small" underground mine initially, before expanding at the site, which is said to have a long term 15 year life span.

There is also an opportunity to expand the resources as exploration has shown.

Capital costs are kept low by the fact there is already a processing facility, offtake contracts and tailings facility in place.

The initial investment to get the underground mine up and running has been put at £10mln and the firm said last summer it was working on financing options now, said Phelps, adding it was likely to consist of bank financing and an equity portion.

A judicial spanner in the works?

In a blib in the landscape, in  March this year, the firm reported that a judicial review would be heard into the planning consent it received in 2015.

The firm has said an individual has obtained leave from Belfast High Court to bring the review, which is expected to be heard between September 27 and September 29. 

They plan to challenge the actions of the Department of Environment Northern Ireland (DOENI) in granting planning for underground mining beneath the existing open pit.

The firm has not said a great deal about this as the case proceeds other than it will lay to rest any dispute regarding the status of the consent.

Significantly perhaps, it certainly hasn't stopped some work proceeding and the firm has progressed some restoration and some advance works related to underground development, including a ramp down through the existing open pit.

Chairman Roland Phelps has said: "We’ve now done rehabilitation work on three tailings cells that have been completed.

"They’re nicely grassed now. We’ve also made the pit wall safe where we’re going to put the portal. And we’ve met the licence preconditions on dust-monitoring and sound-monitoring."

On August 9, the firm also said it had bought two refurbished units -a  scoop and a drill jumbo - and will train local employees ahead of its main purchase of equipment when it has secured project financing.

Exploration also showing further potential

In the three months to March 30 this year, 1,298 metres  were drilled, bringing the total number of metres for the programme to 3,602m and in January, the firm identified the largest accumulation of gold discovered so far.

That was a 13 metre intersection at the Joshua vein showing gold grades of 9.9 g/t (grams per tonne), 30.3 g/t silver and 0.6% lead, at an estimated vertical depth of 117.2 metres.

Also the firm found new high grade vein called 'Kestrel' in an under-explored area of the formerly producing property.

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Galantas Gold Corp Timeline

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