What can we glean from the latest set of quarterly results from Galantas Gold Corporation (LON:GAL)?
Not much, certainly from the financial figures themselves, which showed revenues at a low-key C$28,000 and net losses at a mild C$373,345, down from the C$415,000 reported in the corresponding quarter in 2015.
More significantly perhaps, for a company which isn’t currently producing, there was nearly C$570,000 in the kitty at the period end, which ought to be enough to see Galantas through the crucial period when the judicial review into its license at the Omagh gold property in Northern Ireland is due to take place.
How serious an obstacle to a re-start of production this judicial review is likely to be is hard to say, but a clear indication of the Galantas view can be gleaned from the level of activity on the ground at Omagh over the past couple of months.
“We’re very enthusiastic,” says chairman Roland Phelps. “We’re getting on with the job in a small way.”
Most significantly, a ramp down through the existing open pit to where the proposed portal to the underground mine will be has been completed.
But that’s not all.
“We’ve now done rehabilitation work on three tailings cells that have been completed,” continues Phelps.
“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.”
The message here is plain. In the event of a favourable result, Galantas will be ready to go. After all, the company still has the license at Omagh until a judge says it hasn’t.
In the meantime, as far as the investment case for Galantas is concerned, there’s the price of gold to consider, but with a twist.
“I’m not surprised that we’ve seen a little bit of weakness in gold lately,” says Phelps. “That often happens at this time of year.” But the dollar-sterling exchange rate effect mitigates that weakness almost entirely.
In the last couple of weeks the sterling gold price has been better than it has been for over two years, notwithstanding the pull-back in dollar terms.
That makes Galantas an interesting way to play gold in a time of dollar strength, which of course there may be more of as the Fed talks rate rises over the summer.
The one wild card will be Brexit. But the polls for now at least are discounting that.