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RESULTS FOR THE 3 AND 6 MONTHS ENDED JUNE 30, 2019

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RNS Number : 7025J
Galantas Gold Corporation
21 August 2019
 

GALANTAS GOLD CORPORATION

TSXV & AIM: Symbol GAL

 

 

GALANTAS REPORTS RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019

 

August 21, 2019:  Galantas Gold Corporation (the 'Company') is pleased to announce its financial results for the Three and Six Months ended June 30, 2019.

 

Financial Highlights

Highlights of the 2019 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

 

      2019                     2018

 

                Six Months Ended

                        June 30

 

      2019                           2018

Revenue

$      0

$       57,040

$       0

     $     57,040

Cost of Sales

$    (85,482)

$      (34,150)

$       (155,508)

$  (58,216)

(Loss)/income before the undernoted

$    (85,482)

$      22,890

$        (155,508)

 $  (1,176)

Depreciation

$      (99,085)

$      (77,980)

$      (186,490)

$   (142,229)

General administrative expenses 

$    (646,381)

$    (616,153)

$    (1,248,810)

$ (1,025,043)

Unrealized gain on fair value of derivative financial liability

   $                0

    $                 0

$        0

      $     10,000

Foreign exchange loss

$       (60,915)

$    (29,267)

$     (80,572)

$    (66,560)

Net Loss for the period

$  ( 891,863)

$     (700,510)

$  (1,671,380)

$ (1,225,008)

Working Capital Deficit

$ (4,753,840)

$ (5,252,685)

$ (4,753,840)

$(5,252,685)

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

$ (673,444)

$    (429,920)

$   (1,064,481)

$  (762,340)

Cash at June 30, 2018

$  1,314,113

    $    732,603

$  1,314,113

$ 732,603

 

The Net Loss for the three months ended June 30, 2019 amounted to CDN$ 891,863 (2018: CDN$ 700,510) and the cash loss from operating activities before changes in non-cash working capital for the second quarter of 2019 amounted to CDN$ 673,444 (2018 Q2: CDN$ 429,920). The Net Loss for the six months ended June 30, 2019 amounted to CDN $ 1,671,380 (2018:CDN$ 1,225,008) and the cash loss from operating activities before changes in non-cash working capital for the first six months of 2019 amounted to CDN$ 1,064,481 (2018: CDN$ 762,340).

 

Shipments of concentrate commenced during the second quarter of 2019 and provisional sales revenues totalled                 US$ 460,000 approximately. However, until the mine commences commercial production all development expenditures are capitalised with net proceeds from concentrate sales offset against Development assets.

 

The Company had cash balances of $ 1,314,113 at June 30, 2019 compared to $ 732,603 at June 30, 2018. The working capital deficit at June 30, 2019 amounted to $ 4,753,840 compared to a working capital deficit of $ 5,252,685 at June 30, 2018.

 

Property, plant and equipment expenditures for the three and six months ended June 30, 2019 amounted to $ 1,441,514 and $ 3,392,566 respectively. Expenditures incurred in both periods were mainly in connection with Development assets expenditure.

 

There were no financing activities during the first half of 2019. Subsequent to June 30, 2019 Galantas reported a proposed private placement of common shares. The placement is for a maximum of 23,529,412 shares, at an issue price of UK£0.0425 ($0.068) per share for maximum gross proceeds of UK£1,000,000 ($ 1,600,000).

 

 

 

 

 

Production/Mine Development

 

During the second quarter of 2019 the Omagh gold mine continued limited production of gold concentrate from feed produced in the development of the Kearney vein. The plant, which produces a gold & silver concentrate using a non-toxic, froth-flotation process, is running from a stockpile of underground vein material plus additional feed produced from on-vein development operations.

 

Underground development of the decline tunnel continued to be progressed during the second quarter of 2019 with further cross-cuts allowing access to lower levels of vein development which forms the development necessary to demarcate production panels. On-vein development continued on the 1084 (second) level and the 1072 (third) level. The vein on the 1072 (third) was reached early in the second quarter and on vein development has commenced. Development has continued southwards on the third (1072) level with gold grades within the expected range. The main decline tunnel reached the fourth (1060) level during the second quarter and an access drive to intersect the Kearney vein on this level commenced.

 

Subsequent to June 30, 2019 the Company reported that the access drive on the fourth (1060) level has intersected the Kearney vein ahead of schedule. The intersection shows strongly developed mineralization. The north and south faces of the vein were channel sampled. The average of the two channels was 8.35 g/t gold over an average true width of 2.65 metres. The vein intersection is expected to allow in-vein development both north and south on the fourth (1060) level. Development on the fourth level is anticipated to produce increased feed tonnage to the processing plant, which produces a concentrate sold under an off-take contract. The Company also reported that a drivage from the 1072 access has been taken northwards, in-vein, for approximately 40 metres. Mineralisation beyond the first 20 metres is currently excluded from the geological model, due to paucity of data. The mineralization was shown to be persistent and has been followed in an in-vein development. Two channel samples taken across the face as the drivage was developed at 24.1m and 27.6m into the third level (1072) north development showed a grade of 6.2g/t gold and 16.3 g/t gold respectively, each with a true width of 3 metres. The vein will continue to be followed northwards on the third (1072) level and increases the potential for additional mineralisation to be added to the resource model if discovered on the adjacent first (1096), second (1084) and fourth (1060) levels, which have not yet accessed this area. To June 30, 2019 approximately 1623 metres of drivage has been completed since underground development commenced. The in-vein portion of the development is designed to form lower and upper access to future stoping blocks for production. Detailed geological information collected during in-vein development allows the geotechnical design of the various blocks to be optimized and the geological model to be refined (See press release July 22, 2019).

 

The increased number of development headings is expected to provide an enhanced supply of mill feed.  For most of the rest of 2019, the increased quantities of processing feed will be sourced from multiple on-vein development headings.

 

Milling operations progressed during the second quarter of 2019 on an extended dayshift basis, as feed became available. As expected, a second shift was added early in the second quarter. Additional milling shifts are expected to be added in the fourth quarter, when training of additional personnel is complete. The processing plant, which was used formerly for open-pit operations, has had the benefit of a recent upgrade and further upgrades are planned. Recent analyses suggest that the product from the plant meets quality criteria and operates at a high efficiency. Shipments of concentrate to Ocean Partners UK Ltd commenced in the second quarter. Provisional revenues from concentrate totalled US$ 460,000 approximately for the quarter, representing approximately 154 tonnes of concentrate shipped. However, until the mine reaches the commencement of commercial production all development expenditures are capitalized with net proceeds from concentrate sales offset against Development assets.

 

Safety is a high priority and the company continues to invest in safety-related training and infra-structure. The zero lost time accident rate since the start of underground operations, continues. Environmental monitoring demonstrates a high level of regulatory compliance. Phased site restoration works continue with thousands of tree saplings planted this year.

 

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.

 

Click on, or paste the following link into your web browser, to view the associated PDF document.

 

http://www.rns-pdf.londonstockexchange.com/rns/7025J_1-2019-8-20.pdf

 

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.

Enquiries

Galantas Gold Corporation

Roland Phelps C.Eng - President & CEO
Email:
[email protected]
Website: www.galantas.com
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   

 

 

NOTICE TO READER

The accompanying unaudited condensed interim consolidated financial statements of Galantas Gold Corporation (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors.

 

 

Galantas Gold Corporation

Condensed Interim Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

(Unaudited)

 

 

 

As at

 

 

As at

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

$

 1,314,113

 

$

 6,188,554

 

Accounts receivable and prepaid expenses (note 4)

 

983,474

 

 

287,273

 

Inventories (note 5)

 

-

 

 

11,335

 

Total current assets

 

2,297,587

 

 

6,487,162

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Property, plant and equipment (note 6)

 

18,934,776

 

 

16,487,501

 

Long-term deposit (note 8)

 

498,720

 

 

523,170

 

Exploration and evaluation assets (note 7)

 

726,914

 

 

760,023

 

Total non-current assets

 

20,160,410

 

 

17,770,694

 

Total assets

$

 22,457,997

 

$

 24,257,856

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable and other liabilities (note 9)

$

 2,461,864

 

$

 2,257,329

 

Current portion of financing facilities (note 10)

 

398,212

 

 

382,974

 

Due to related parties (note 13)

 

4,191,351

 

 

4,119,642

 

Total current liabilities

 

7,051,427

 

 

6,759,945

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Non-current portion of financing facilities (note 10)

 

1,066,316

 

 

1,081,190

 

Decommissioning liability (note 8)

 

556,468

 

 

578,242

 

Total non-current liabilities

 

1,622,784

 

 

1,659,432

 

Total liabilities

 

8,674,211

 

 

8,419,377

 

 

 

 

 

 

 

 

Capital and reserves

 

 

 

 

 

 

Share capital (note 11(a)(b))

 

48,628,055

 

 

48,628,055

 

Reserves

 

8,579,850

 

 

8,963,163

 

Deficit

 

(43,424,119

)

 

(41,752,739

)

Total equity

 

13,783,786

 

 

15,838,479

 

Total equity and liabilities

$

 22,457,997

 

$

 24,257,856

 

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Going concern (note 1)
Contingency (note 15)

 

 

Galantas Gold Corporation

Condensed Interim Consolidated Statements of Loss

(Expressed in Canadian Dollars)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Gold sales

$

 -

 

$

 57,040

 

$

 -

 

$

 57,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost and expenses of operations

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

85,482

 

 

34,150

 

 

155,508

 

 

58,216

 

Depreciation (note 6)

 

99,085

 

 

77,980

 

 

186,490

 

 

142,229

 

 

 

184,567

 

 

112,130

 

 

341,998

 

 

200,445

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before general administrative and other expenses (income)

 

(184,567

)

 

(55,090

)

 

(341,998

)

 

(143,405

)

 

 

 

 

 

 

 

 

 

 

 

 

 

General administrative expenses

 

 

 

 

 

 

 

 

 

 

 

 

Management and administration wages (note 13)

 

255,618

 

 

216,565

 

 

447,306

 

 

373,417

 

Other operating expenses

 

37,054

 

 

57,081

 

 

82,280

 

 

104,177

 

Accounting and corporate

 

14,718

 

 

17,107

 

 

28,613

 

 

30,360

 

Legal and audit

 

25,872

 

 

17,452

 

 

41,446

 

 

64,203

 

Stock-based compensation

 

76,723

 

 

69,772

 

 

212,063

 

 

145,855

 

Shareholder communication and investor relations

 

62,836

 

 

66,312

 

 

110,969

 

 

105,630

 

Transfer agent

 

5,752

 

 

5,477

 

 

7,653

 

 

6,127

 

Director fees (note 13)

 

11,250

 

 

8,250

 

 

17,500

 

 

13,250

 

General office

 

3,663

 

 

2,041

 

 

6,262

 

 

4,422

 

Accretion expenses (notes 8 and 10)

 

61,983

 

 

77,618

 

 

119,029

 

 

80,397

 

Loan interest and bank charges less deposit interest (note 13)

 

90,912

 

 

78,478

 

 

175,689

 

 

97,205

 

 

 

646,381

 

 

616,153

 

 

1,248,810

 

 

1,025,043

 

Other expenses (income)

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on fair value of derivative financial liability

 

-

 

 

-

 

 

-

 

 

 (10,000

)

Foreign exchange loss

 

60,915

 

 

29,267

 

 

80,572

 

 

66,560

 

 

 

60,915

 

 

29,267

 

 

80,572

 

 

56,560

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period

$

 (891,863

)

$

 (700,510

)

$

 (1,671,380

)

$

 (1,225,008

)

Basic and diluted net loss per share (note 12)

$

 (0.00

)

$

 (0.00

)

$

 (0.01

)

$

 (0.01

)

Weighted average number of common shares outstanding - basic and diluted

 

299,686,805

 

 

187,549,186

 

 

299,686,805

 

 

187,549,186

 

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

 

Galantas Gold Corporation

Condensed Interim Consolidated Statements of Comprehensive Income (Loss)

(Expressed in Canadian Dollars)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period

$

(891,863

)

$

 (700,510

)

$

 (1,671,380

)

$

 (1,225,008

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

Items that will be reclassified subsequently to profit or loss

 

 

 

 

 

 

 

 

 

 

 

 

Exchange differences on translating foreign operations

 

(590,394

)

 

(391,688

)

 

(595,376

)

 

202,954

 

Total comprehensive loss

$

(1,482,257

)

$

 (1,092,198

)

$

 (2,266,756

)

$

 (1,022,054

)

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

 

Galantas Gold Corporation

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in Canadian Dollars)

(Unaudited)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

Net loss for the period

$

 (1,671,380

)

$

 (1,225,008

)

Adjustment for:

 

 

 

 

 

 

Depreciation (note 6)

 

186,490

 

 

142,229

 

Stock-based compensation

 

212,063

 

 

145,855

 

Interest expense (note 13)

 

180,717

 

 

93,063

 

Foreign exchange loss

 

(91,400

)

 

11,034

 

Accretion expenses (notes 8 and 10)

 

119,029

 

 

80,397

 

Unrealized loss on fair value of derivative financial liability

 

-

 

 

(10,000

)

Non-cash working capital items:

 

 

 

 

 

 

Accounts receivable and prepaid expenses

 

(743,079

)

 

54,505

 

Inventories

 

11,335

 

 

4,070

 

Accounts payable and other liabilities

 

318,134

 

 

453,412

 

Due to related parties

 

79,013

 

 

173,908

 

Net cash and cash equivalents used in operating activities

 

(1,399,078

)

 

(76,535

)

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Purchase of property, plant and equipment

 

(3,392,566

)

 

(602,009

)

Exploration and evaluation assets

 

-

 

 

(1,909,858

)

Net cash and cash equivalents used in investing activities

 

(3,392,566

)

 

(2,511,867

)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Advances from related parties

 

-

 

 

549,193

 

Proceeds from financing facilities (note 10)

 

-

 

 

2,021,280

 

Financing charges related to financing liabilities (note 10)

 

-

 

 

(41,806

)

Repayment of financing facilities (note 10)

 

(22,569

)

 

(3,022

)

Net cash and cash equivalents (used in) provided by financing activities

 

(22,569

)

 

2,525,645

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

(4,814,213

)

 

(62,757

)

 

 

 

 

 

 

 

Effect of exchange rate changes on cash held in foreign currencies

 

(60,228

)

 

15,602

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

6,188,554

 

 

779,758

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

$

 1,314,113

 

$

 732,603

 

 

 

 

 

 

 

 

Cash

$

 1,314,113

 

$

 732,603

 

Cash equivalents

 

-

 

 

-

 

Cash and cash equivalents

$

 1,314,113

 

$

 732,603

 

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

 

Galantas Gold Corporation

Condensed Interim Consolidated Statements of Changes in Equity

(Expressed in Canadian Dollars)

(Unaudited)

 

 

 

 

 

 

 

 

 

Reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity settled

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

share-based

 

 

currency

 

 

 

 

 

 

 

 

 

Share

 

 

Warrants

 

 

payments

 

 

translation

 

 

 

 

 

 

 

 

 

capital

 

 

reserve

 

 

reserve

 

 

reserve

 

 

Deficit

 

 

Total

 

Balance, December 31, 2017

$

 39,759,172

 

$

 -

 

$

 7,038,978

 

$

 619,209

 

$

(38,867,302

)

$

 8,550,057

 

Warrants issued (note 10(ii))

 

-

 

 

786,000

 

 

-

 

 

-

 

 

-

 

 

786,000

 

Stock-based compensation

 

-

 

 

-

 

 

145,855

 

 

-

 

 

-

 

 

145,855

 

Exchange differences on translating foreign operations

 

-

 

 

-

 

 

-

 

 

202,954

 

 

-

 

 

202,954

 

Net loss for the period

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,225,008

)

 

(1,225,008

)

Balance, June 30, 2018

$

 39,759,172

 

$

 786,000

 

$

 7,184,833

 

$

 822,163

 

$

(40,092,310

)

$

 8,459,858

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018

$

 48,628,055

 

$

 786,000

 

$

 7,264,147

 

$

 913,016

 

$

(41,752,739

)

$

 15,838,479

 

Stock-based compensation

 

-

 

 

-

 

 

212,063

 

 

-

 

 

-

 

 

212,063

 

Exchange differences on translating foreign operations

 

-

 

 

-

 

 

-

 

 

(595,376

)

 

-

 

 

(595,376

)

Net loss for the period

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,671,380

)

 

(1,671,380

)

Balance, June 30, 2019

$

 48,628,055

 

$

 786,000

 

$

 7,476,210

 

$

 317,640

 

$

(43,424,119

)

$

 13,783,786

 

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

 

Galantas Gold Corporation

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2019

(Expressed in Canadian Dollars)

(Unaudited)

1.        Going Concern

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which contemplates that Galantas Gold Corporation (the "Company") will be able to realize assets and discharge liabilities in the normal course of business. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of uncertainties related to events or conditions that may cast doubt on the Company's ability to continue as a going concern. The Company's future viability depends on the consolidated results of the Company's wholly-owned subsidiary Cavanacaw Corporation ("Cavanacaw"). Cavanacaw has a 100% shareholding in both Flintridge Resources Limited ("Flintridge") who are engaged in the acquisition, exploration and development of gold properties, mainly in Omagh, Northern Ireland and Omagh Minerals Limited ("Omagh") who are engaged in the exploration of gold properties, mainly in the Republic of Ireland. The Omagh mine has an open pit mine, which was in production until 2013 when production was suspended and is reported as property, plant and equipment and as an underground mine which having established technical feasibility and commercial viability in December 2018 has resulted in associated exploration and evaluation assets being reclassified as an intangible development asset and reported as property, plant and equipment.

The going concern assumption is dependent upon forecast cash flows at the Omagh mine being met together with the continued support of both Cavanacaw Corporation and Galantas Gold Corporation. The directors assumptions in relation to future levels of production, gold prices and mine operating costs are crucial to forecast cash flows being achieved. Should production be significantly delayed, revenues fall short of expectations or operating costs and capital costs increase significantly, there may be insufficient cash flows to sustain day to day operations without seeking further finance.

As at June 30, 2019, the Company had a deficit of $43,424,119 (December 31, 2018 - $41,752,739). Comprehensive loss for the six months ended June 30, 2019 was $2,266,756 (six months ended June 30, 2018 - comprehensive loss of $1,022,054). These losses raise material uncertainties which cast significant doubt as to whether the Company will be able to continue as a going concern. Management is confident that it will continue as a going concern. However, this is subject to a number of factors including market conditions.

These unaudited condensed interim consolidated financial statements do not reflect adjustments to the carrying values of assets and liabilities, the reported expenses and financial position classifications used that would be necessary if the going concern assumption was not appropriate. These adjustments could be material.

2.        Incorporation and Nature of Operations

The Company was formed on September 20, 1996 under the name Montemor Resources Inc. on the amalgamation of 1169479 Ontario Inc. and Consolidated Deer Creek Resources Limited. The name was changed to European Gold Resources Inc. by articles of amendment dated July 25, 1997. On May 5, 2004, the Company changed its name from European Gold Resources Inc. to Galantas Gold Corporation. The Company was incorporated to explore for and develop mineral resource properties, principally in Europe. In 1997, it purchased all of the shares of Omagh which owns a mineral property in Northern Ireland, including a delineated gold deposit. Omagh obtained full planning and environmental consents necessary to bring its property into production.

The Company entered into an agreement on April 17, 2000, approved by shareholders on June 26, 2000, whereby Cavanacaw, a private Ontario corporation, acquired Omagh. Cavanacaw has established an open pit mine to extract the Company's gold deposit near Omagh, Northern Ireland. Cavanacaw also has developed a premium jewellery business founded on the gold produced under the name Galántas Irish Gold Limited ("Galántas"). As at July 1, 2007, the Company's Omagh mine began production and in 2013 production was suspended. On April 1, 2014, Galántas amalgamated its jewelry business with Omagh.

On April 8, 2014, Cavanacaw acquired Flintridge. Following a strategic review of its business by the Company during 2014 certain assets owned by Omagh were acquired by Flintridge.

The Company's operations include the consolidated results of Cavanacaw, and its wholly-owned subsidiaries Omagh, Galántas and Flintridge.

The Company's common shares are listed on the TSX Venture Exchange ("TSXV") and London Stock Exchange AIM under the symbol GAL. The primary office is located at The Canadian Venture Building, 82 Richmond Street East, Toronto, Ontario, Canada, M5C 1P1.

3.        Basis of Preparation

Statement of compliance

The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"). These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements.

The policies applied in these unaudited condensed interim consolidated financial statements are based on IFRSs issued and outstanding as of August 20, 2019 the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed interim consolidated financial statements as compared with the most recent annual consolidated financial statements as at and for the year ended December 31, 2018, except as noted below. Any subsequent changes to IFRS that are given effect in the Company's annual consolidated financial statements for the year ending December 31, 2019 could result in restatement of these unaudited condensed interim consolidated financial statements.

New accounting standards adopted

(i) On June 7, 2017, the IASB issued IFRIC 23 - Uncertainty Over Income Tax Treatments. The interpretation provides guidance on the accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over income tax treatments. The interpretation is applicable for annual periods beginning on or after January 1, 2019. At January 1, 2019, the Company adopted this standard and there was no material impact on the Company's unaudited condensed interim consolidated financial statements.

(ii) On January 13, 2016, the IASB issued IFRS 16 - Leases ("IFRS 16"). The new standard is effective for annual periods beginning on or after January 1, 2019. IFRS 16 will replace IAS 17 - Leases ("IAS 17"). This standard introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. IFRS 16 substantially carries forward the lessor accounting requirements of IAS 17, while requiring enhanced disclosures to be provided by lessors. Other areas of the lease accounting model have been impacted, including the definition of a lease. Transitional provisions have been provided. The Company adopted IFRS 16 in its unaudited condensed interim consolidated financial statements for the period beginning on January 1, 2019. As the Company has no material lease contracts that fall under IFRS 16, the adoption of this standard has not resulted in any material changes in the unaudited condensed interim consolidated financial statements.

4.        Accounts Receivable and Prepaid Expenses

 

 

As at

 

 

As at

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales tax receivable - Canada

$

 5,675

 

$

 7,629

 

Valued added tax receivable - Northern Ireland

 

387,369

 

 

153,948

 

Accounts receivable

 

532,972

 

 

109,927

 

Prepaid expenses

 

57,458

 

 

15,769

 

 

$

 983,474

 

$

 287,273

 

The following is an aged analysis of receivables:

 

 

As at

 

 

As at

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Less than 3 months

$

 917,621

 

$

 268,995

 

3 to 12 months

 

6,003

 

 

-

 

More than 12 months

 

2,392

 

 

2,509

 

Total accounts receivable

$

 926,016

 

$

 271,504

 

5.        Inventories

 

 

As at

 

 

As at

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Concentrate inventories

$

 -

 

$

 11,335

 

6.        Property, Plant and Equipment

 

 

Freehold

 

 

Plant

 

 

 

 

 

 

 

 

Mine

 

 

 

 

 

 

 

 

 

land and

 

 

and

 

 

Motor

 

 

Office

 

 

development

 

 

Development

 

 

 

 

Cost

 

buildings

 

 

machinery

 

 

vehicles

 

 

equipment

 

 

costs

 

 

assets

 

 

Total

 

Balance, December 31, 2017

$

 2,340,221

 

$

 5,477,586

 

$

 141,364

 

$

 104,456

 

$

 15,340,722

 

$

 -

 

$

 23,404,349

 

Additions

 

-

 

 

557,607

 

 

21,014

 

 

46,996

 

 

-

 

 

4,266,806

 

 

4,892,423

 

Transfer (1)

 

-

 

 

-

 

 

-

 

 

-

 

 

(15,340,722

)

 

10,468,410

 

 

(4,872,312

)

Foreign exchange adjustment

 

65,953

 

 

153,418

 

 

3,984

 

 

2,944

 

 

-

 

 

(38,803

)

 

187,496

 

Balance, December 31, 2018

 

2,406,174

 

 

6,188,611

 

 

166,362

 

 

154,396

 

 

-

 

 

14,696,413

 

 

23,611,956

 

Additions

 

-

 

 

626,896

 

 

12,920

 

 

12,593

 

 

-

 

 

2,740,157

 

 

3,392,566

 

Foreign exchange adjustment

 

(112,451

)

 

(287,641

)

 

(7,775

)

 

(7,216

)

 

-

 

 

(682,086

)

 

(1,097,169

)

Balance, June 30, 2019

$

 2,293,723

 

$

 6,527,866

 

$

 171,507

 

$

 159,773

 

$

 -

 

$

 16,754,484

 

$

 25,907,353

 

 

 

 

Freehold

 

 

Plant

 

 

 

 

 

 

 

 

Mine

 

 

 

 

 

 

 

 

 

land and

 

 

and

 

 

Motor

 

 

Office

 

 

development

 

 

Development

 

 

 

 

Accumulated depreciation

 

buildings

 

 

machinery

 

 

vehicles

 

 

equipment

 

 

costs

 

 

assets

 

 

Total

 

Balance, December 31, 2017

$

 1,908,720

 

$

 4,496,935

 

$

 91,189

 

$

 88,977

 

$

 8,651,776

 

$

 -

 

$

 15,237,597

 

Depreciation

 

12,433

 

 

311,201

 

 

18,005

 

 

9,360

 

 

-

 

 

-

 

 

350,999

 

Transfer (1)

 

-

 

 

-

 

 

-

 

 

-

 

 

(8,651,776

)

 

-

 

 

(8,651,776

)

Foreign exchange adjustment

 

53,892

 

 

128,444

 

 

2,716

 

 

2,583

 

 

-

 

 

-

 

 

187,635

 

Balance, December 31, 2018

 

1,975,045

 

 

4,936,580

 

 

111,910

 

 

100,920

 

 

-

 

 

-

 

 

7,124,455

 

Depreciation

 

4,835

 

 

169,331

 

 

7,494

 

 

4,830

 

 

-

 

 

-

 

 

186,490

 

Foreign exchange adjustment

 

(92,479

)

 

(235,492

)

 

(5,504

)

 

(4,893

)

 

-

 

 

-

 

 

(338,368

)

Balance, June 30, 2019

$

 1,887,401

 

$

 4,870,419

 

$

 113,900

 

$

 100,857

 

$

 -

 

$

 -

 

$

 6,972,577

 

 

 

 

Freehold

 

 

Plant

 

 

 

 

 

 

 

 

Mine

 

 

 

 

 

 

 

 

 

land and

 

 

and

 

 

Motor

 

 

Office

 

 

development

 

 

Development

 

 

 

 

Carrying value

 

buildings

 

 

machinery

 

 

vehicles

 

 

equipment

 

 

costs

 

 

assets

 

 

Total

 

Balance, December 31, 2018

$

 431,129

 

$

 1,252,031

 

$

 54,452

 

$

 53,476

 

$

 -

 

$

 14,696,413

 

$

 16,487,501

 

Balance, June 30, 2019

$

 406,322

 

$

 1,657,447

 

$

 57,607

 

$

 58,916

 

$

 -

 

$

 16,754,484

 

$

 18,934,776

 

(1) During the year ended December 31, 2018, the Company transferred the cost of its Exploration and evaluation assets (note 7) to Development assets.

7.        Exploration and Evaluation Assets

Exploration and evaluation assets are expenditures for the underground mining operations in Omagh. Galantas had announced in December 2016 that it would commence the first phase of underground development and re-start concentrate shipments at its Omagh mine. Underground development of a decline tunnel, located at the base of the existing open pit, commenced in the first quarter 2017.

The granting of planning consent during the second quarter of 2015 for an underground operation at the Omagh site permits the continuation and expansion of gold mining. This planning consent was appealed by a third party in a judicial review hearing which commenced in September 2016 and was then adjourned to and completed in February 2017. Judgement was received in September 2017 whereby the third party's request for the quashing of the planning consent was denied. However, in November, Galantas reported that it had received notice of an application by the third party to the Court of Appeal in relation to the positive judicial review judgment. This appeal was completed in February 2018. In November 2018, the Company announced that the Court of Appeal has delivered its 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.

 

 

Exploration

 

 

 

and

 

 

 

evaluation

 

Cost

 

assets

 

 

 

 

 

Balance, December 31, 2017

$

 3,948,452

 

Additions

 

254,140

 

Transfer (i)

 

(3,624,624

)

Foreign exchange adjustment

 

182,055

 

Balance, December 31, 2018

 

760,023

 

Foreign exchange adjustment

 

(33,109

)

Balance, June 30, 2019

$

 726,914

 

 

 

 

Exploration

 

 

 

and

 

 

 

evaluation

 

Carrying value

 

assets

 

 

 

 

 

Balance, December 31, 2018

$

 760,023

 

Balance, June 30, 2019

$

 726,914

 

(i) During the year ended December 31, 2018, the Company transferred the cost of its Exploration and evaluation assets (note 6) to Development assets.

8.        Decommissioning Liability

The Company's decommissioning liability is a result of mining activities at the Omagh mine in Northern Ireland. The Company estimated its decommissioning liability at June 30, 2019 based on a risk-free discount rate of 1% (December 31, 2018 - 1%) and an inflation rate of 1.50% (December 31, 2018 - 1.50%). The expected undiscounted future obligations allowing for inflation are GBP 330,000 and based on management's best estimate the decommissioning is expected to occur over the next 5 to 10 years. On June 30, 2019, the estimated fair value of the liability is $556,468 (December 31, 2018 - $578,242). Changes in the provision during the six months ended June 30, 2019 are as follows:

 

 

As at

 

 

As at

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Decommissioning liability, beginning of period

$

 578,242

 

$

 551,680

 

Accretion

 

5,449

 

 

10,925

 

Foreign exchange

 

(27,223

)

 

15,637

 

Decommissioning liability, end of period

$

 556,468

 

$

 578,242

 

As required by the Crown in Northern Ireland, the Company is required to provide a bond for reclamation related to the Omagh mine in the amount of GBP 300,000 (December 31, 2018 - GBP 300,000), of which GBP 300,000 was funded as of June 30, 2019 (GBP 300,000 was funded as of December 31, 2018) and reported as long-term deposit of $498,720 (December 31, 2018 - $523,170).

9.        Accounts Payable and Other Liabilities

Accounts payable and other liabilities of the Company are principally comprised of amounts outstanding for purchases relating to exploration costs on exploration and evaluation assets, general operating activities and professional fees activities.

 

 

As at

 

 

As at

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Accounts payable

$

 1,540,457

 

$

 1,017,939

 

Accrued liabilities

 

921,407

 

 

1,239,390

 

Total accounts payable and other liabilities

$

 2,461,864

 

$

 2,257,329

 

The following is an aged analysis of the accounts payable and other liabilities:

 

 

As at

 

 

As at

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Less than 3 months

$

 1,573,645

 

$

 1,066,881

 

3 to 12 months

 

553,735

 

 

775,693

 

12 to 24 months

 

-

 

 

71,394

 

More than 24 months

 

334,484

 

 

343,361

 

Total accounts payable and other liabilities

$

 2,461,864

 

$

 2,257,329

 

10.      Financing Facilities

Amounts payable on the long-term debts are as follow:

 

 

As at

 

 

As at

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Financing facilities, beginning of period

$

 1,081,190

 

$

 19,689

 

Financing facility received (US$1,600,000) (ii)

 

-

 

 

2,021,280

 

Less bonus warrants issued (ii)

 

-

 

 

(786,000

)

Less financing costs (ii)

 

-

 

 

(41,674

)

Less current portion

 

(398,212

)

 

(382,974

)

Repayment of financing facilities

 

(22,569

)

 

(6,357

)

Accretion

 

113,580

 

 

240,621

 

Foreign exchange adjustment

 

292,327

 

 

16,605

 

Financing facilities - long term portion

$

 1,066,316

 

$

 1,081,190

 

(i) In June 2015, the Company obtained financing in the amount of GBP 19,900 for the purchase of a vehicle. The financing is for three years at interest of 6.79% per annum with monthly principal and interest payments of GBP 377 together with a final payment in August 2019 of GBP 9,540. The financing was secured on the vehicle.

(ii) In April 2018, the Company signed a concentrate pre-payment agreement and loan facility for US$1.6 million with a United Kingdom based company (the "Lender"), with a maturity date of December 31, 2020. The interest is set at USD 12 month LIBOR + 8.75% and payable monthly. No interest shall be charged for 6 months and repayments shall commence against deliveries in 2019. There was a US$25,000 arrangement fee.

In respect of the loan facility, a fixed and floating security, subordinated to an existing security to G&F Phelps Ltd. ("G&F Phelps"), is being put in place over Flintridge assets. G&F Phelps has a first charge on Flintridge assets in respect of its loan facility and the Lender required an intercreditor agreement between G&F Phelps and the Lender.

As consideration for the loan facility, the United Kingdom based company received 15,000,000 bonus warrants of Galantas. Each bonus warrant is exercisable into one common share of Galantas and is subject to an initial four months plus one day hold period from the date of issuance of the bonus warrants. The bonus warrants have a maximum life of two years (the "Expiry Time"). On April 19, 2018, the 15,000,000 bonus warrants were granted. In the event that the weighted average closing price per common share of the Company is more than $0.20 per share for more than five consecutive trading days, the Company shall be entitled to accelerate the Expiry Time to a date that is 30 days from the date on which the Company announces the accelerated Expiry Time by press release.

The fair value of the 15,000,000 bonus warrants was estimated at $786,000 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 113.55%, risk-free interest rate - 1.91% and an expected average life of 2 years.

During the three and six months ended June 30, 2019, the Company recorded accretion expense of $59,268 and $113,580, respectively in the unaudited condensed interim consolidated statements of loss in regards with this loan facility (year ended December 31, 2018 - $240,621).

During the three and six months ended June 30, 2019, the Company recorded a repayment of $19,131 (GBP 11,508) in regards with this loan facility (year ended December 31, 2018 - $nil).

11.      Share Capital and Reserves

a)         Authorized share capital

At June 30, 2019, the authorized share capital consisted of an unlimited number of common and preference shares issuable in Series.

The common shares do not have a par value. All issued shares are fully paid.

No preference shares have been issued. The preference shares do not have a par value.

b)         Common shares issued

At June 30, 2019, the issued share capital amounted to $48,628,055. The change in issued share capital for the periods presented is as follows:

 

 

Number of

 

 

 

 

 

 

common

 

 

 

 

 

 

shares

 

 

Amount

 

 

 

 

 

 

 

 

Balance, December 31, 2017 and June 30, 2018

 

187,549,186

 

$

 39,759,172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018 and June 30, 2019

 

299,686,805

 

$

 48,628,055

 

c)      Warrant reserve

The following table shows the continuity of warrants for the periods presented:

 

 

 

 

 

Weighted

 

 

 

 

 

 

average

 

 

 

Number of

 

 

exercise

 

 

 

warrants

 

 

price

 

 

 

 

 

 

 

 

Balance, December 31, 2017

 

636,000

 

$

 0.07

 

Issued (note 10(ii))

 

15,000,000

 

 

0.16

 

Expired

 

(636,000

)

 

0.07

 

Balance, June 30, 2018

 

15,000,000

 

$

 0.16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018 and June 30, 2019

 

15,000,000

 

$

 0.16

 

The following table reflects the actual warrants issued and outstanding as of June 30, 2019:

 

 

Grant date

Exercise

 

Number

fair value

price

Expiry date

of warrants

($)

($)

 

 

 

 

April 19, 2020

15,000,000

786,000

0.1575

d)        Stock options

The following table shows the continuity of stock options for the periods presented:

 

 

 

 

 

Weighted

 

 

 

 

 

 

average

 

 

 

Number of

 

 

exercise

 

 

 

options

 

 

price

 

 

 

 

 

 

 

 

Balance, December 31, 2017

 

8,600,000

 

$

 0.12

 

Granted (i)

 

1,000,000

 

 

0.11

 

Expired

 

(750,000

)

 

0.14

 

Balance, June 30, 2018

 

8,850,000

 

$

 0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018

 

8,850,000

 

$

 0.12

 

Granted (ii)(iii)

 

5,400,000

 

 

0.09

 

Expired

 

(133,333

)

 

0.09

 

Balance, June 30, 2019

 

14,116,667

 

$

 0.09

 

(i) On April 19, 2018, 1,000,000 stock options were granted to key employees and consultants of the Company to purchase common shares at a price of $0.11 per share until April 19, 2023. The options will vest as to one third on April 19, 2018 and one third on each of the following two anniversaries. The fair value attributed to these options was $99,400 and was expensed in the unaudited condensed interim consolidated statements of loss and credited to equity settled share-based payments reserve. During the three and six months ended June 30, 2019, included in stock-based compensation is $5,855 and $18,110, respectively (three and six months ended June 30, 2018 - $42,937) related to the vested portion of these options.

The fair value of the options was estimated using the Black-Scholes option pricing model with the following assumptions: dividend yield - 0%; volatility - 172%; risk-free interest rate - 2.16% and an expected life of 5 years.

(ii) On February 13, 2019, 3,200,000 stock options were granted to directors, officers, consultants and employees of the Company to purchase common shares at a price of $0.09 per share until February 13, 2024. The options will vest as to one third on February 13, 2019 and one third on each of the following two anniversaries. The fair value attributed to these options was $247,360 and was expensed in the unaudited condensed interim consolidated statements of loss and credited to equity settled share-based payments reserve. During the three and six months ended June 30, 2019, included in stock-based compensation is $27,934 and $125,974, respectively related to the vested portion of these options.

The fair value of the options was estimated using the Black-Scholes option pricing model with the following assumptions: dividend yield - 0%; volatility - 129%; risk-free interest rate - 1.84% and an expected life of 5 years.

(iii) On June 27, 2019, 2,200,000 stock options were granted to directors and employees of the Company to purchase common shares at a price of $0.09 per share until June 27, 2024. The options will vest as to one third on June 27, 2019 and one third on each of the following two anniversaries. The fair value attributed to these options was $128,040 and was expensed in the unaudited condensed interim consolidated statements of loss and credited to equity settled share-based payments reserve. During the three and six months ended June 30, 2019, included in stock-based compensation is $43,206 related to the vested portion of these options.

The fair value of the options was estimated using the Black-Scholes option pricing model with the following assumptions: dividend yield - 0%; volatility - 128%; risk-free interest rate - 1.37% and an expected life of 5 years.

The following table reflects the actual stock options issued and outstanding as of June 30, 2019:

 

 

Weighted average

 

Number of

 

 

 

remaining

Number of

options

Number of

 

Exercise

contractual

options

vested

options

Expiry date

price ($)

life (years)

outstanding

(exercisable)

unvested

June 1, 2020

0.105

0.92

3,550,000

3,550,000

-

June 12, 2020

0.105

0.96

150,000

150,000

-

March 25, 2022

0.135

2.74

4,150,000

4,150,000

-

April 19, 2023

0.110

3.81

1,000,000

1,000,000

-

February 13, 2024

0.090

4.63

3,066,667

1,066,667

2,000,000

June 27, 2024

0.090

5.00

2,200,000

733,333

1,466,667

 

0.095

2.32

14,116,667

10,650,000

3,466,667

12.      Net Loss per Common Share

The calculation of basic and diluted loss per share for the three and six months ended June 30, 2019 was based on the loss attributable to common shareholders of $891,863 and $1,671,380, respectively (three and six months ended June 30, 2018 - $700,510 and $1,225,008, respectively) and the weighted average number of common shares outstanding of 299,686,805 (three and six months ended June 30, 2018 - 187,549,186) for basic and diluted loss per share. Diluted loss did not include the effect of 15,000,000 warrants (three and six months ended June 30, 2018 - 15,000,000) and 14,116,667 options (three and six months ended June 30, 2018 - 8,850,000) for the three and six months ended June 30, 2019, as they are anti-dilutive.

13.      Related Party Disclosures

Related parties include the Board of Directors, close family members, other key management individuals and enterprises that are controlled by these individuals as well as certain persons performing similar functions.

Related party transactions conducted in the normal course of operations are measured at the fair value and approved by the Board of Directors in strict adherence to conflict of interest laws and regulations.

(a) The Company entered into the following transactions with related parties:

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

 

 

June 30,

 

 

June 30,

 

 

 

Note

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Interest on related party loans

 

(i)

 

$

 90,553

 

$

76,934

 

$

 180,717

 

$

94,269

 

(i) G&F Phelps, a company controlled by a director of the Company, had amalgamated loans to the Company of $3,033,492 (GBP 1,824,764) (December 31, 2018 - $3,182,205 - GBP 1,824,764) included with due to related parties bearing interest at 2% above UK base rates, repayable on demand and secured by a mortgage debenture on all the Company's assets. In April 2018, the interest increased to 6.75% + USD 12 month LIBOR. Interest accrued on related party loans is included with due to related parties. As at June 30, 2019, the amount of interest accrued is $801,669 (GBP 482,236) (December 31, 2018 - $658,338 - GBP 377,509).

(b) Remuneration of officer and directors of the Company was as follows:

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

   Salaries and benefits (1)

$

 116,176

 

$

 115,996

 

$

 227,875

 

$

228,106

 

Stock-based compensation

 

17,616

 

 

6,572

 

 

57,383

 

 

25,205

 

 

$

 133,792

 

$

 122,568

 

$

 285,258

 

$

253,311

 

(1) Salaries and benefits include director fees. As at June 30, 2019, due to directors for fees amounted to $100,500 (December 31, 2018 - $166,000) and due to officers, mainly for salaries and benefits accrued amounted to $255,690 (GBP 153,808) (December 31, 2018 - $113,099 - GBP 64,854), and is included with due to related parties.

(c) As of June 30, 2019, Ross Beaty owns 37,447,478 common shares of the Company or approximately 12.50% of the outstanding common shares. Roland Phelps, CEO and director, owns, directly and indirectly, 49,338,167 common shares of the Company or approximately 16.46% of the outstanding common shares of the Company. Miton owns 50,000,000 common shares of the Company or approximately 16.68%. Melquart owns, directly and indirectly, 62,224,545 common shares of the Company or approximately 20.76% of the outstanding common shares of the Company. The remaining 33.60% of the shares are widely held, which includes various small holdings which are owned by directors of the Company. These holdings can change at anytime at the discretion of the owner.

The Company is not aware of any arrangements that may at a subsequent date result in a change in control of the Company.

14.      Segment Disclosure

The Company has determined that it has one reportable segment. The Company's operations are substantially all related to its investment in Cavanacaw and its subsidiaries, Omagh and Flintridge. Substantially all of the Company's revenues, costs and assets of the business that support these operations are derived or located in Northern Ireland. Segmented information on a geographic basis is as follows:

June 30, 2019

 

United Kingdom

 

 

Canada

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

Current assets

$

 1,373,101

 

$

 924,486

 

$

 2,297,587

 

Non-current assets

 

20,102,562

 

 

57,848

 

 

20,160,410

 

 

December 31, 2018

 

United Kingdom

 

 

Canada

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

Current assets

$

 794,772

 

$

 5,692,390

 

$

 6,487,162

 

Non-current assets

 

17,706,643

 

 

64,051

 

 

17,770,694

 

15.      Contingency

During the year ended December 31, 2010, the Company's subsidiary Omagh Minerals Limited received a payment demand from Her Majesty's Revenue and Customs ("HMRC") in the amount of $505,852 (GBP 304,290) in connection with an aggregate levy arising from the removal of waste rock from the mine site during 2008 and early 2009. Omagh Minerals believed this claim to be without merit. An appeal was lodged with the tax Tribunals Service and the hearing started at the beginning of March 2017 and following a number of adjournments was completed in August 2018. During the six months ended June 30, 2019, the Tax Tribunals Service issued their judgement dismissing the appeal by Omagh in respect of the assessments. A provision has now been included in the unaudited condensed interim consolidated financial statements in respect of the aggregates levy plus interest and penalty.

There is a contingent liability in respect of potential additional interest which may be applied in respect of the aggregates levy dispute. Omagh Minerals Limited is unable to make a reliable estimate of the amount of the potential additional interest that may be applied by HMRC.

16.      Event After the Reporting Period

On August 5, 2019, the Company announced a proposed private placement of common shares (the "Private Placement"). The net proceeds to be realised by the Private Placement are intended to be used to implement recently identified optimisation initiatives at the Omagh gold mine, including increased mechanisation and improved underground infrastructure, as well as for general working capital of the Company.

The Private Placement is expected to include funds raised in both the UK and Canadian currency and is for a maximum of 23,529,412 shares, at an issue price of $0.068 (GBP 0.0425) per share for maximum gross proceeds of $1,600,000 (GBP 1,000,000). A four month plus one day hold period will apply to the shares and the shares will rank pari passu with the existing shares in issue of the Company. The Private Placement will be part brokered. Insiders are expected to participate in the placing.

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
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Quick facts: Galantas Gold Corp

Price: 1.625

Market: AIM
Market Cap: £5.25 m
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Full interview: Galantas Gold temporarily suspends blasting at Omagh mine

Galantas Gold Corporation's (LON:GAL) Roland Phelps tells Proactive London's Andrew Scott they've temporarily suspended blasting operations at their Omagh gold mine, Northern Ireland. Phelps says blasting operations are currently limited, since all blasting must be supervised by the Police...

on 29/10/19