Galantas Gold Corp - GALANTAS REPORTS ESTIMATED PAYBACK 2.7 YEARS
GALANTAS GOLD CORPORATION TSX Venture Exchange: GAL London Stock Exchange AIM: GAL 18th July 2008 GALANTAS REPORTS ESTIMATED PAYBACK 2.7 YEARS Galantas Gold Corporation (Galantas), which has a 100% interest in Ireland's only gold mine, today filed a report by independent consultants ACA Howe International Ltd.(Howe). The report, entitled 'Technical Report on the Omagh Gold Project', is dated 28th May 2008 and will be published on www.sedar.com and www.galantas.com . Authors are G. White FGS MAusIMM, J. Bennett C.Eng MIMMM and N. Holloway C.Eng MIMMM. The operational open pit mine is situated near Omagh, County Tyrone, Northern Ireland and is engaged in increasing mine ore production to a target of 1400 tonnes per week. The mine produces a flotation concentrate containing gold, silver and lead, which is exported and sold to a Canadian smelter. Resource calculations as press released on 12th June 2008 are detailed by the report. Additional data on production economics are also included. The report contains the following mine budget details for 2008, which are expressed in UK# sterling :- ' Howe has reviewed the Galantas Gold budget for 2008. The Galantas budget is summarised in the following table; Table 1 - Galantas Budget Summary Q1 Q2 Q3 Q4 Total Ore production Tonnes 4,419 10,641 18,200 23,400 56,660 diluted grade(gold) g/t 6.11 7.70 9.54 7.32 8.01 Concentrate production Tonnes 263 657 1,331 1,184 3,436 grade (gold) g/t 85 105 120 119 119 value #stg 247,548 736,414 1,684,236 1,660,757 4,328,955 Revenues #stg Revenue from Xstrata 323,198 736,414 1,684,236 1,660,757 4,404,605 Other revenues 45,000 45,000 0 0 90,000 Total revenues 368,198 781,414 1,684,236 1,660,757 4,494,605 Operating costs #stg Salaries 245,490 253,978 265,673 265,673 1,030,815 Cash commitments 524,707 524,707 Finance charges 147,250 162,918 162,918 162,918 636,005 Licences, other fees 16,400 2,400 12,400 28,275 59,475 Administration 34,044 38,602 38,602 38,596 149,844 Mill operations 170,850 170,850 170,850 170,850 683,400 Open pit operations 178,985 52,585 52,585 152,585 436,740 Laboratory 1,000 1,000 1,000 1,000 1,000 Geology 9,958 66,086 66,086 66,086 208,216 Total direct operating costs #stg 1,328,685 748,419 770,115 885,984 3,733,202 Note: 1. production is stated for February and March 2008 only 2. Revenue and operating costs are for the full quarter in each case 3. Open pit operations include #126,400 for overburden removal by contractor in Jan 08 and #100,000 for tailings cell development in October 08 4. The following prices have been used by Howe to estimate revenue: gold $900 per oz, silver $14 per oz, lead $1.18 per lb. These give similar values to the Galantas revenue ACA Howe notes as follows. (a) The production of ore is ramped up significantly. This is due to the ability of Galantas to remove larger quantities of overburden through their arrangement with the contractor as described. Galantas also plan to commence operations in the Kerr vein towards the end of the year. Howe believe it is within the capability of Galantas to produce at these rates, but believe that the monthly costs will increase as a result, due to higher wear rates on the equipment. (b) Ore grade is higher than the block resource model. This is attributed by Galantas to the higher grade areas that they are planning to mine in the middle of 2008. It is probable therefore that grades mined in the subsequent periods will reduce to the overall resource average. Also, if Galantas mine only the higher grade zones, and stockpile the lower grade zones, there will come a time when there will be a stockpiled resource of the lower grade material., which may or may not be economic to process. As the tonnage produced in the pit increases, therefore, the tonnage through the plant will increase. Additional processing plant is being acquired to allow this increase in plant throughput, but Howe note that operating costs per quarter do not change commensurately. (c) Galantas state that the concentrate grade will improve as a result of plant improvements. These improvements will need significant management to achieve. (d) Other revenues include VAT refunds (e) The increase in geology costs later in the year is as a result of additional drilling.' Howe's comments regarding pay-back are as follows :- 'The current assets figure, as of 31st March 2008, is reported by Galantas as C$16.997M. The sterling equivalent of this, using a June 2008 midpoint rate of C$2.02 = #1, is #8.404M. Once in full production, the annualised sales, based on the final quarter of 2008, are expected to be #6.643M. The annualised costs, on the same basis, are expected to be #3.544M. This indicates an annual surplus of #3.099M. On this basis, the pay-back period is estimated as 2.7 years. ' This disclosure has been authorised by G.White FGS MAusIMM, (Senior Geologist - Resources) of ACA Howe International Ltd, who is a Qualified Person for this purpose. Verification detail is as previously disclosed on 12th June 2008. Galantas Gold Corporation Issued and Outstanding Shares total 175,675,855. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release. 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: statements relating to the estimated reserves and resources at the Omagh Gold project; anticipated results of drilling programs, feasibility studies or other analyses; and cost and production 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, performance or achievements to differ materially from those expressed or implied by the forward looking statements, including: gold price volatility; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimated production, between actual and estimated reserves, and between actual and estimated metallurgical recoveries; mining operational risk; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign involvement; speculative nature of gold exploration; dilution; competition; loss of key employees; additional funding requirements; 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 for the year ended December 31, 2007 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. Enquiries: Galantas Gold Corporation Jack Gunter P.Eng - Chairman Roland Phelps C.Eng - President and CEO Email : [email protected] Website : www.galantas.com Telephone : +44 (0) 2882 241100 Blomfield Corporate Finance Limited Nick Harriss Telephone : +44 (0) 207 489 4500 Lewis Charles Securities Limited Kealan Doyle & Nicholas Nicolaides Telephone : +44 (0) 207 456 9100
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