Well-known mining broker SP Angel has initiated coverage on Galantas Gold Corp (AIM:GAL, TSX-V:GAL, OTC:GALKF), the operator of Cavanacaw mine in Northern Ireland.
Galantas has completed approximately 2,500 metres of development work on the Kearney vein at Cavancaw and is now ready to begin production.
The mine was previously operated successfully as an open pit for a number of years.
“We expect Galantas to begin the commercial production of gold concentrate in the final quarter of 2022, followed by a ramp up in operations to reach around a 23,000 ounce run rate in 2025,” said SP Angel.
“Applying the discount rate to the derived net present value, we initiate coverage and arrive at an attributable net asset value of £70mln or 54p per share.”
The broker also noted Galantas’s healthy cash position, following C$6.9mln raise in August 2022.
The Kearney vein is known to contain a measured and indicated resource of more than 100,000 ounces of gold. This vein will be the initial focus for Galantas, following the successful development of a shotcrete-supported decline from the bottom of the Kearney open pit to access the vein from underground workings.
Four working levels have been developed or partly developed on the Kearney vein to date.