Galantas Gold Corp (LON:GAL, CVE:GAL) is to raise C$1.26mln by placing around 16mln shares.
The owner of the Omagh gold mine in Northern Ireland said it expects to place the shares at 7.875p each, while, subject to relevant approvals, Roland Phelps, president and chief executive officer of Galantas Gold, intends to take shares in the company at the same assumed price in lieu of repayment of a debt he made to the company.
In all, Phelps will exchange debt accruing to him, as of March 31, 2016, of up to C$935,852 for up to 11,883,835 shares.
The net proceeds raised by the placing are intended to be used for working capital purposes, to finance the company's legal commitments in regard to its underground planning consent, finance work on conditions precedent and progress exploration activities.
As is usually the case when a company issues shares at a discount, the share price of Galantas fell back, in this case to 10 cents from 10.5 cents. In London, the shares closed at 4.75p, down 0.375p on the day.