Galantas Gold Corp (LON:GAL) has told investors that it understands financial matters have now been mutually agreed in connection to a proposed increase in underground blasting at the Omagh mine in Northern Ireland.
The company’s ore mining is presently suspended until finance is available to expand the underground operation.
Production had been disrupted by police restrictions on the storage and use of explosives for mine blasting and in recent months it has focused on resolving the problem.
Whilst the company awaits resolution it is also actively reviewing its business.
“The company is seeking strategic alternatives including reviewing its licenses and operations; and considering the possibility of engaging in a sale, joint venture, partnership or other options with third parties and alternative financing structures,” Galantas said in a statement accompanying its quarterly results.
In terms of financial results, Galantas reported a US$680,315 loss for the quarter ended March 31, 2020.
The company noted that whilst it has not been in commercial-scale production proceeds from gold concentrate sales are offset against development assets. Concentrate sales amounted to US$186,000 for the quarter.
It ended March with US$936,560 of cash and reported a working capital deficit of US$7.29mln, widened from US$2.7mln at the end of 2019.
In June, the company agreed a share placing and last week that was increased to C$637,454, or £376,240. The net proceeds will be used to support mine operations and provide general working capital for the company.
Work to restart blasting
All blasting must be supervised by the Police Service of Northern Ireland (PSNI) and availability was not sufficient for the desired level of operations. Progress was made following substantive investment, though it was still awaiting final approvals to implement increased blasting protocols.
Due to the financial burden, and amid the coronavirus pandemic, the company suspended ore mining operations and reduced headcount to 21 from 46.
“Subsequent to March 31, 2020, Galantas reported that confirmation has been received from PSNI, in regard to their satisfaction of certain secure storage and handling protocols required for an increase in blasting to a commercial level subject to financial matters being agreed,” Galantas said.
“The company now understands that these financial matters have now been mutually agreed."