GALANTAS GOLD
CORPORATION
TSXV & AIM: Symbol
GAL
GALANTAS REPORT FINANCIAL
RESULTS FOR THE QUARTER ENDED September 30, 2024
November 27, 2024: Galantas
Gold Corporation (the 'Company') is pleased to announce its
unaudited financial results for the Quarter ended September 30,
2024.
Financial Highlights
Highlights of the third quarter 2024
results, which are expressed in Canadian Dollars, are summarized
below:
|
All
figures denominated in Canadian Dollars (CDN$)
|
Quarter
Ended
September
30
2024
2023
|
|
Revenue
|
$
0
|
$
0
|
|
Cost and expenses of
operations
|
$
(22,283)
|
$
(24,728)
|
|
Loss before the undernoted
|
$
(22,283)
|
$
(24,728)
|
|
Depreciation
|
$ (110,126)
|
$
(135,597)
|
|
General administrative
expenses
|
$ (1,174,156)
|
$
(858,600)
|
|
Foreign exchange gain
(loss)
|
$ (26,553)
|
$
(294,430)
|
|
Unrealized gain on derivative fair
value adjustment
|
$
592,489
|
$
0
|
|
Net (Loss) for the quarter
|
$ (740,629)
|
$
(1,313,355)
|
|
Working Capital Deficit
|
$ (14,098,845)
|
$
(14,010,771)
|
|
Cash gain/(loss) from operating
activities before changes in non-cash
working capital
|
$ 21,801
|
$
(1,088,096)
|
|
Cash at September 30, 2024
|
$ 383,011
|
$
609,047
|
Sales revenue for the quarter ended
September 30, 2024 amounted to $ Nil compared to revenue of $ Nil
for the quarter ended September 30, 2023. Shipments of concentrate
commenced during the third quarter of 2019. Concentrate sales
provisional revenues totalled US$ 197,000 for the third quarter of
2024 compared to US$ 333,000 for the third quarter of 2023. Until
the mine commences commercial production, the net proceeds from
concentrate sales are being offset against development
assets.
The Net Loss for the quarter ended
September 30, 2024 amounted to $ 740,629 (2023: $ 1,313,355) and
the cash inflow from operating activities before changes in
non-cash working capital for the quarter ended September 30, 2024
amounted to $21,801 (2023: cash outflow
$1,088,096).
The Company had a cash balance of $
383,011 at September 30, 2024 compared to $ 609,047 at September
30, 2023. The working capital deficit at September 30, 2024
amounted to $ 14,098,845 compared to a working capital deficit
of $ 14,010,771 at September 30, 2023.
Safety is a high priority for the
Company and we continue to invest in safety-related training and
infrastructure. The zero lost time accident rate since the start of
underground operations continues. Environmental monitoring
demonstrates a high level of regulatory compliance.
The detailed results and Management
Discussion and Analysis (MD&A) are available on
www.sedar.com and www.galantas.com and the highlights in this release should be read in
conjunction with the detailed results and MD&A. The MD&A
provides an analysis of comparisons with previous periods, trends
affecting the business and risk factors.
Click on, or paste the following
link into your web browser, to view the associated PDF
document.
http://www.rns-pdf.londonstockexchange.com/rns/7364N_1-2024-11-26.pdf
Qualified Person
The financial components of this
disclosure have been reviewed by Alan Buckley (Chief Financial
Officer) and the production and permitting components by Brendan
Morris (COO), qualified persons under the meaning of NI. 43-101.
The information is based upon local production and financial data
prepared under their supervision.
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 revenues and cost 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, the performance
or achievements to differ materially from those expressed or
implied by the forward looking statements or strategy, including:
gold price volatility; discrepancies between actual and estimated
production, actual and estimated metallurgical
recoveries and throughputs; mining operational risk, geological
uncertainties; regulatory restrictions, including environmental
regulatory restrictions and liability; risks of sovereign
involvement; speculative nature of gold exploration; dilution;
competition; loss of or availability of key employees; additional
funding requirements; uncertainties regarding planning and other
permitting issues; 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 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
Mario Stifano - CEO
Email: info@galantas.com
Website: www.galantas.com
Telephone: 001 416 453 8433
Grant Thornton UK LLP (Nomad)
Harrison Clarke, Elliot
Peters
Telephone: +44(0)20 7383
5100
SP Angel Corporate Finance LLP (AIM
Broker)
David Hignell, Charlie Bouverat
(Corporate Finance)
Grant Barker (Sales and
Broking)
Telephone: +44(0)20 3470
0470
GALANTAS GOLD
CORPORATION
Condensed Interim Consolidated Financial
Statements
(Expressed in Canadian Dollars)
(Unaudited)
Three and Nine Months Ended September 30,
2024
NOTICE TO READER
The accompanying unaudited condensed interim
consolidated financial statements of Galantas Gold Corporation (the
"Company") have been prepared by and are the responsibility of
management. The unaudited condensed interim consolidated financial
statements have not been reviewed by the Company's auditors.
Galantas Gold Corporation
Condensed Interim
Consolidated Statements of Financial Position
(Expressed in
Canadian Dollars)
(Unaudited)
|
|
|
As at
|
|
|
As at
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
383,011
|
|
$
|
2,593,265
|
|
|
Accounts receivable and
prepaid expenses (note 4)
|
|
1,321,219
|
|
|
1,596,880
|
|
|
Inventories (note
5)
|
|
-
|
|
|
18,184
|
|
|
Total current assets
|
|
1,704,230
|
|
|
4,208,329
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
Property, plant and
equipment (note 6)
|
|
25,650,366
|
|
|
23,094,171
|
|
|
Long-term deposit (note
8)
|
|
542,400
|
|
|
505,110
|
|
|
Exploration and
evaluation assets (note 7)
|
|
5,438,541
|
|
|
4,776,409
|
|
|
Total non-current assets
|
|
31,631,307
|
|
|
28,375,690
|
|
|
Total assets
|
$
|
33,335,537
|
|
$
|
32,584,019
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable and
other liabilities (notes 9 and 17)
|
$
|
3,380,616
|
|
$
|
3,662,842
|
|
|
Financing facilities
(note 10)
|
|
-
|
|
|
6,119,308
|
|
|
Due to related parties
(note 15)
|
|
12,422,459
|
|
|
5,838,256
|
|
|
Other liability (note
15)
|
|
-
|
|
|
1,187,437
|
|
|
Total current liabilities
|
|
15,803,075
|
|
|
16,807,843
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
Due to related parties
(note 15)
|
|
-
|
|
|
638,432
|
|
|
Decommissioning
liability (note 8)
|
|
665,158
|
|
|
611,452
|
|
|
Convertible debenture
(note 11)
|
|
6,235,957
|
|
|
1,923,509
|
|
|
Derivative liability
(note 11)
|
|
792,607
|
|
|
1,245,627
|
|
|
Total non-current liabilities
|
|
7,693,722
|
|
|
4,419,020
|
|
|
Total liabilities
|
|
23,496,797
|
|
|
21,226,863
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Share capital (note
12(a)(b))
|
|
71,782,203
|
|
|
71,809,999
|
|
|
Reserves
|
|
20,074,711
|
|
|
18,579,467
|
|
|
Deficit
|
|
(82,018,174
|
)
|
|
(79,032,310
|
)
|
|
Total equity
|
|
9,838,740
|
|
|
11,357,156
|
|
|
Total equity and liabilities
|
$
|
33,335,537
|
|
$
|
32,584,019
|
|
The notes to the unaudited condensed interim
consolidated financial statements are an integral part of these
statements.
Going concern (note 1)
Incorporation and nature of operations (note 2)
Contingency (note 17)
Galantas Gold Corporation
Condensed Interim
Consolidated Statements of Loss
(Expressed in
Canadian Dollars)
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of concentrate
(note 14)
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
and expenses of operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
22,283
|
|
|
24,728
|
|
|
69,933
|
|
|
147,824
|
|
|
Depreciation (note
6)
|
|
110,126
|
|
|
135,597
|
|
|
323,633
|
|
|
390,691
|
|
|
|
|
132,409
|
|
|
160,325
|
|
|
393,566
|
|
|
538,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before general administrative and other income
|
|
(132,409
|
)
|
|
(160,325
|
)
|
|
(393,566
|
)
|
|
(538,515
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General administrative expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management and
administration wages (note 15)
|
|
179,955
|
|
|
136,117
|
|
|
440,937
|
|
|
421,076
|
|
|
Other operating
expenses
|
|
34,353
|
|
|
60,368
|
|
|
107,378
|
|
|
210,572
|
|
|
Accounting and
corporate
|
|
17,737
|
|
|
26,658
|
|
|
71,343
|
|
|
245,054
|
|
|
Legal and
audit
|
|
34,235
|
|
|
51,117
|
|
|
137,700
|
|
|
140,561
|
|
|
Stock-based
compensation (note 12(d))
|
|
73,061
|
|
|
29,277
|
|
|
358,929
|
|
|
329,658
|
|
|
Shareholder
communication and investor relations
|
|
43,750
|
|
|
63,126
|
|
|
245,283
|
|
|
444,808
|
|
|
Transfer
agent
|
|
16,618
|
|
|
10,614
|
|
|
77,669
|
|
|
61,670
|
|
|
Director fees (note
15)
|
|
-
|
|
|
35,000
|
|
|
70,000
|
|
|
105,000
|
|
|
General
office
|
|
14,523
|
|
|
7,724
|
|
|
48,258
|
|
|
74,203
|
|
|
Accretion expenses
(notes 8, 10, 11 and 15)
|
|
338,711
|
|
|
94,043
|
|
|
970,031
|
|
|
299,790
|
|
|
Loan interest and bank
charges less deposit
interest (notes 10, 11 and
15)
|
|
421,213
|
|
|
344,556
|
|
|
1,327,302
|
|
|
956,868
|
|
|
|
|
1,174,156
|
|
|
858,600
|
|
|
3,854,830
|
|
|
3,289,260
|
|
|
Other expense (income)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss
(gain)
|
|
26,553
|
|
|
294,430
|
|
|
(61,175
|
)
|
|
234,710
|
|
|
Unrealized gain on
derivative fair value
adjustment (note 11)
|
|
(592,489
|
)
|
|
-
|
|
|
(1,201,357
|
)
|
|
-
|
|
|
|
|
(565,936
|
)
|
|
294,430
|
|
|
(1,262,532
|
)
|
|
234,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
$
|
(740,629
|
)
|
$
|
(1,313,355
|
)
|
$
|
(2,985,864
|
)
|
$
|
(4,062,485
|
)
|
|
Basic and diluted net loss per share (note
13)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.03
|
)
|
$
|
(0.04
|
)
|
|
Weighted average number of common
shares
outstanding - basic and diluted (note 13)
|
|
114,770,587
|
|
|
114,841,403
|
|
|
114,725,407
|
|
|
110,976,336
|
|
The notes to the unaudited condensed interim
consolidated financial statements are an integral part of these
statements.
Galantas Gold Corporation
Condensed Interim
Consolidated Statements of Comprehensive Income (Loss)
(Expressed in
Canadian Dollars)
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
$
|
(740,629
|
)
|
$
|
(1,313,355
|
)
|
$
|
(2,985,864
|
)
|
$
|
(4,062,485
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that will be reclassified subsequently to profit or
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on
translating foreign operations
|
|
864,230
|
|
|
(154,630
|
)
|
|
1,136,315
|
|
|
471,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss)
|
$
|
123,601
|
|
$
|
(1,467,985
|
)
|
$
|
(1,849,549
|
)
|
$
|
(3,591,198
|
)
|
The notes to the unaudited condensed interim
consolidated financial statements are an integral part of these
statements.
Galantas Gold Corporation
Condensed Interim
Consolidated Statements of Cash Flows
(Expressed in
Canadian Dollars)
(Unaudited)
|
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
Net loss for the period
|
$
|
(2,985,864
|
)
|
$
|
(4,062,485
|
)
|
|
Adjustment for:
|
|
|
|
|
|
|
|
Depreciation (note
6)
|
|
323,633
|
|
|
390,691
|
|
|
Stock-based
compensation (note 12(d))
|
|
358,929
|
|
|
329,658
|
|
|
Accrued interest (notes
10, 11 and 15)
|
|
1,607,352
|
|
|
1,209,383
|
|
|
Foreign exchange
loss
|
|
949,077
|
|
|
744,867
|
|
|
Accretion expenses
(notes 8, 10, 11 and 15)
|
|
970,031
|
|
|
299,790
|
|
|
Gain on derivative fair
value adjustment (note 11)
|
|
(1,201,357
|
)
|
|
-
|
|
|
Non-cash working capital
items:
|
|
|
|
|
|
|
|
Accounts receivable and
prepaid expenses
|
|
295,238
|
|
|
439,346
|
|
|
Inventories
|
|
18,184
|
|
|
68,552
|
|
|
Accounts payable and
other liabilities
|
|
(474,672
|
)
|
|
1,171,840
|
|
|
Net
cash and cash equivalents (used in) provided by operating
activities
|
|
(139,449
|
)
|
|
591,642
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
Net purchase of property, plant and
equipment
|
|
(1,666,862
|
)
|
|
(2,301,514
|
)
|
|
Exploration and evaluation
assets
|
|
(422,865
|
)
|
|
(2,074,404
|
)
|
|
Net
cash and cash equivalents used in investing
activities
|
|
(2,089,727
|
)
|
|
(4,375,918
|
)
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
Proceeds of private placements (note
12(b)(i))
|
|
-
|
|
|
2,963,142
|
|
|
Share issue costs
|
|
-
|
|
|
(204,993
|
)
|
|
Proceeds from exercise of
warrants
|
|
-
|
|
|
31,200
|
|
|
Repayments to related
parties
|
|
-
|
|
|
(21,552
|
)
|
|
Proceeds from financing
facilities
|
|
-
|
|
|
580,392
|
|
|
Net
cash and cash equivalents provided by financing
activities
|
|
-
|
|
|
3,348,189
|
|
|
|
|
|
|
|
|
|
|
Net
change in cash and cash equivalents
|
|
(2,229,176
|
)
|
|
(436,087
|
)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on
cash held in foreign currencies
|
|
18,922
|
|
|
6,491
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents, beginning of period
|
|
2,593,265
|
|
|
1,038,643
|
|
|
Cash
and cash equivalents, end of period
|
$
|
383,011
|
|
$
|
609,047
|
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
383,011
|
|
$
|
609,047
|
|
|
Cash equivalents
|
|
-
|
|
|
-
|
|
|
Cash and cash equivalents
|
$
|
383,011
|
|
$
|
609,047
|
|
The notes to the unaudited condensed interim
consolidated financial statements are an integral part of these
statements.
Galantas Gold Corporation
Condensed Interim
Consolidated Statements of Changes in Equity
(Expressed in
Canadian Dollars)
(Unaudited)
|
|
|
|
|
|
Reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
settled
|
|
|
Foreign
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
share-based
|
|
|
currency
|
|
|
|
|
|
|
|
|
|
|
Share
|
|
|
Warrants
|
|
|
payments
|
|
|
translation
|
|
|
|
|
|
|
|
|
|
|
capital
|
|
|
reserve
|
|
|
reserve
|
|
|
reserve
|
|
|
Deficit
|
|
|
Total
|
|
|
Balance, December 31, 2022
|
$
|
69,664,056
|
|
$
|
3,903,004
|
|
$
|
11,887,678
|
|
$
|
(275,577
|
)
|
$
|
(70,464,170
|
)
|
$
|
14,714,991
|
|
|
Shares issued in private placement
(note 12(b)(i))
|
|
2,963,142
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,963,142
|
|
|
Shares issue for services
arrangement (note 12(b)(ii))
|
|
420,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
420,000
|
|
|
Shares issue for debt settlement
(note 12(b)(iii))
|
|
749,020
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
749,020
|
|
|
Warrants issued (note
12(b)(i)(iii))
|
|
(1,609,634
|
)
|
|
1,609,634
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Warrants issued
|
|
-
|
|
|
82,511
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
82,511
|
|
|
Share issue costs (note
12(b)(i))
|
|
(245,168
|
)
|
|
40,175
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(204,993
|
)
|
|
Stock-based compensation (note
12(d))
|
|
-
|
|
|
-
|
|
|
329,658
|
|
|
-
|
|
|
-
|
|
|
329,658
|
|
|
Exercise of warrants
|
|
40,733
|
|
|
(9,533
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
31,200
|
|
|
Warrants expired
|
|
-
|
|
|
(1,829,245
|
)
|
|
1,829,245
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Exchange differences on translating
foreign operations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
471,287
|
|
|
-
|
|
|
471,287
|
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(4,062,485
|
)
|
|
(4,062,485
|
)
|
|
Balance, September 30, 2023
|
$
|
71,982,149
|
|
$
|
3,796,546
|
|
$
|
14,046,581
|
|
$
|
195,710
|
|
$
|
(74,526,655
|
)
|
$
|
15,494,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
$
|
71,809,999
|
|
$
|
3,546,313
|
|
$
|
14,345,538
|
|
$
|
687,616
|
|
$
|
(79,032,310
|
)
|
$
|
11,357,156
|
|
|
Shares cancelled
|
|
(110,200
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(110,200
|
)
|
|
Convertible debenture converted
(note 11)
|
|
82,404
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
82,404
|
|
|
Stock-based compensation (note
12(d))
|
|
-
|
|
|
-
|
|
|
358,929
|
|
|
-
|
|
|
-
|
|
|
358,929
|
|
|
Warrants expired
|
|
-
|
|
|
(144,464
|
)
|
|
144,464
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Exchange differences on translating
foreign operations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,136,315
|
|
|
-
|
|
|
1,136,315
|
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2,985,864
|
)
|
|
(2,985,864
|
)
|
|
Balance, September 30, 2024
|
$
|
71,782,203
|
|
$
|
3,401,849
|
|
$
|
14,848,931
|
|
$
|
1,823,931
|
|
$
|
(82,018,174
|
)
|
$
|
9,838,740
|
|
The notes to the unaudited condensed interim
consolidated financial statements are an integral part of these
statements.
|
|
|
Galantas Gold Corporation
Notes to Condensed Interim
Consolidated Financial Statements
Three and Nine Months Ended
September 30, 2024
(Expressed in Canadian
Dollars)
(Unaudited)
|
1. Going Concern
These unaudited condensed interim consolidated
financial statements have been prepared on a going concern basis
which contemplates that Galantas Gold Corporation (the "Company")
will be able to realize assets and discharge liabilities in the
normal course of business. In assessing whether the going concern
assumption is appropriate, management takes into account all
available information about the future, which is at least, but is
not limited to, twelve months from the end of the reporting period.
Management is aware, in making its assessment, of uncertainties
related to events or conditions that may cast doubt on the
Company's ability to continue as a going concern. The Company's
future viability depends on the consolidated results of the
Company's wholly-owned subsidiaries Gairloch Resources Limited
("Gairloch") incorporated on November 16, 2023 and Cavanacaw
Corporation ("Cavanacaw"). Cavanacaw has a 100% shareholding in
Galántas Irish Gold Limited ("Galántas"), Flintridge Resources
Limited ("Flintridge") who are engaged in the acquisition,
exploration and development of gold properties, mainly in Omagh,
Northern Ireland and Omagh Minerals Limited ("Omagh") who are
engaged in the exploration of gold properties, mainly in the
Republic of Ireland. The Omagh mine has an open pit mine, which was
in production until 2013 when production was suspended and is
reported as property, plant and equipment and as an underground
mine which having established technical feasibility and commercial
viability in December 2018 has resulted in associated exploration
and evaluation assets being reclassified as an intangible
development asset and reported as property, plant and
equipment.
The going concern assumption is dependent on forecast
cash flows being met, further financing negotiations being
completed together. Management' assumptions in relation to future
financing, levels of production, gold prices and mine operating
costs are crucial to forecast cash flows being achieved. Should
production be significantly delayed, revenues fall short of
expectations or operating costs and capital costs increase
significantly, there may be insufficient cash flows to sustain day
to day operations without seeking further finance.
Based on the financial projections which have been
prepared for a five-year period and using assumptions which
management believes to be prudent, alongside ongoing negotiations
with both current and prospective investors and creditors,
management believes it is appropriate to prepare the unaudited
condensed interim consolidated financial statements on the going
concern basis.
Should the Company be unsuccessful in securing the
above, there would be significant uncertainty over the Company's
ability to continue as a going concern. The unaudited condensed
interim consolidated financial statements do not include any
adjustments that would result if forecast cash flows were not
achieved, if the existing creditors withdrew their support or if
further financing could not be raised from current or potential
investors.
During the year ended December 31, 2023, the Company
raised gross proceeds of $3M through the issuance of shares to
investors and $3.5M through the issuance of convertible
debentures.
As at September 30, 2024, the Company had a deficit
of $82,018,174 (December 31, 2023 - $79,032,310). Comprehensive
loss for the nine months ended September 30, 2024 was $1,849,549
(nine months ended September 30, 2023 - $3,591,198). These
conditions raise material uncertainties which may cast significant
doubt as to whether the Company will be able to continue as a going
concern. However, management believes that it will continue as a
going concern. However, this is subject to a number of factors
including market conditions. These unaudited condensed interim
consolidated financial statements do not reflect adjustments to the
carrying values of assets and liabilities, the reported expenses
and financial position classifications used that would be necessary
if the going concern assumption was not appropriate. These
adjustments could be material.
2. Incorporation and Nature of
Operations
The Company was formed on September 20, 1996 under
the name Montemor Resources Inc. on the amalgamation of 1169479
Ontario Inc. and Consolidated Deer Creek Resources Limited. The
name was changed to European Gold Resources Inc. by articles of
amendment dated July 25, 1997. On May 5, 2004, the Company changed
its name from European Gold Resources Inc. to Galantas Gold
Corporation. The Company was incorporated to explore for and
develop mineral resource properties, principally in Europe. In
1997, it purchased all of the shares of Omagh which owns a mineral
property in Northern Ireland, including a delineated gold deposit.
Omagh obtained full planning and environmental consents necessary
to bring its property into production.
The Company entered into an agreement on April 17,
2000, approved by shareholders on June 26, 2000, whereby Cavanacaw,
a private Ontario corporation, acquired Omagh. Cavanacaw has
established an open pit mine to extract the Company's gold deposit
near Omagh, Northern Ireland. Cavanacaw also has developed a
premium jewellery business founded on the gold produced under the
name Galántas. As at July 1, 2007, the Company's Omagh mine began
production and in 2013 production was suspended. On April 1, 2014,
Galántas amalgamated its jewelry business with Omagh.
On April 8, 2014, Cavanacaw acquired Flintridge.
Following a strategic review of its business by the Company during
2014 certain assets owned by Omagh were acquired by Flintridge.
On November 16, 2023, Gairloch was incorporated.
The Company's operations include the consolidated
results of Gairloch, Cavanacaw, and its wholly-owned subsidiaries
Omagh, Galántas and Flintridge.
The Company's common shares are listed on the TSX
Venture Exchange ("TSXV") and London Stock Exchange AIM under the
symbol GAL. On September 1, 2021, the Company's common shares
started trading under the symbol GALKF on the OTCQX in the United
States. The primary office is located at The Canadian Venture
Building, 82 Richmond Street East, Toronto, Ontario, Canada, M5C
1P1.
3. Basis of Preparation
Statement
of compliance
The Company applies International Financial Reporting
Standards ("IFRS") as issued by the International Accounting
Standards Board and interpretations issued by the International
Financial Reporting Interpretations Committee ("IFRIC").
These unaudited condensed interim consolidated financial statements
have been prepared in accordance with International Accounting
Standard 34 - Interim Financial Reporting. Accordingly, they do not
include all of the information required for full annual financial
statements.
The policies applied in these unaudited condensed
interim consolidated financial statements are based on IFRS issued
and outstanding as of November 22, 2024 the date the Board of
Directors approved the statements. The same accounting policies and
methods of computation are followed in these unaudited condensed
interim consolidated financial statements as compared with the most
recent annual consolidated financial statements as at and for the
year ended December 31, 2023. Any subsequent changes to IFRS that
are given effect in the Company's annual consolidated financial
statements for the year ending December 31, 2024 could result in
restatement of these unaudited condensed interim consolidated
financial statements.
4. Accounts Receivable and Prepaid
Expenses
|
|
|
As at
|
|
|
As at
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Sales tax receivable -
Canada
|
$
|
11,179
|
|
$
|
15,067
|
|
|
Valued added tax receivable -
Northern Ireland
|
|
149,838
|
|
|
9,959
|
|
|
Accounts receivable
|
|
43,303
|
|
|
83,266
|
|
|
Prepaid expenses
|
|
1,116,899
|
|
|
1,488,588
|
|
|
|
$
|
1,321,219
|
|
$
|
1,596,880
|
|
Prepaid expenses includes advances for consumables
and for construction of the passing bays in the Omagh mine. Prepaid
expenses includes also $1,000,000 pursuant to services agreement
for the underground development at the Omagh Gold Project.
The following is an aged analysis of receivables:
|
|
|
As at
|
|
|
As at
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Less than 3 months
|
$
|
164,112
|
|
$
|
50,614
|
|
|
3 to 12 months
|
|
21,163
|
|
|
45,330
|
|
|
More than 12 months
|
|
19,045
|
|
|
12,348
|
|
|
Total accounts receivable
|
$
|
204,320
|
|
$
|
108,292
|
|
5. Inventories
|
|
|
As at
|
|
|
As at
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Concentrate inventories
|
$
|
-
|
|
$
|
18,184
|
|
6. Property, Plant and Equipment
|
|
|
Freehold
|
|
|
Plant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
land and
|
|
|
and
|
|
|
Motor
|
|
|
Office
|
|
|
Development
|
|
|
Assets
under
|
|
|
|
|
|
Cost
|
|
buildings
|
|
|
machinery
|
|
|
vehicles
|
|
|
equipment
|
|
|
assets (i)
|
|
|
construction
|
|
|
Total
|
|
|
Balance, December 31, 2022
|
$
|
2,252,053
|
|
$
|
8,721,798
|
|
$
|
220,866
|
|
$
|
216,029
|
|
$
|
21,402,040
|
|
$
|
-
|
|
$
|
32,812,786
|
|
|
Additions
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,423,820
|
|
|
26,939
|
|
|
3,450,759
|
|
|
Cash receipts from concentrate
sales
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,491,453
|
)
|
|
-
|
|
|
(1,491,453
|
)
|
|
Impairment
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(3,353,077
|
)
|
|
-
|
|
|
(3,353,077
|
)
|
|
Foreign exchange
adjustment
|
|
71,058
|
|
|
274,128
|
|
|
6,969
|
|
|
6,816
|
|
|
658,736
|
|
|
-
|
|
|
1,017,707
|
|
|
Balance, December 31,
2023
|
|
2,323,111
|
|
|
8,995,926
|
|
|
227,835
|
|
|
222,845
|
|
|
20,640,066
|
|
|
26,939
|
|
|
32,436,722
|
|
|
Additions
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,926,569
|
|
|
-
|
|
|
1,926,569
|
|
|
Transfer
|
|
-
|
|
|
28,928
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(28,928
|
)
|
|
-
|
|
|
Cash receipts from concentrate sales
(note 14)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(712,747
|
)
|
|
-
|
|
|
(712,747
|
)
|
|
Foreign exchange
adjustment
|
|
171,505
|
|
|
661,628
|
|
|
16,820
|
|
|
16,451
|
|
|
1,510,289
|
|
|
1,989
|
|
|
2,378,682
|
|
|
Balance, September 30,
2024
|
$
|
2,494,616
|
|
$
|
9,686,482
|
|
$
|
244,655
|
|
$
|
239,296
|
|
$
|
23,364,177
|
|
$
|
-
|
|
$
|
36,029,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
$
|
1,876,242
|
|
$
|
6,378,013
|
|
$
|
158,615
|
|
$
|
144,067
|
|
$
|
-
|
|
$
|
-
|
|
$
|
8,556,937
|
|
|
Depreciation
|
|
3,954
|
|
|
482,088
|
|
|
17,864
|
|
|
11,097
|
|
|
-
|
|
|
-
|
|
|
515,003
|
|
|
Foreign exchange
adjustment
|
|
59,213
|
|
|
201,755
|
|
|
5,062
|
|
|
4,581
|
|
|
-
|
|
|
-
|
|
|
270,611
|
|
|
Balance, December 31, 2023
|
|
1,939,409
|
|
|
7,061,856
|
|
|
181,541
|
|
|
159,745
|
|
|
-
|
|
|
-
|
|
|
9,342,551
|
|
|
Depreciation
|
|
2,454
|
|
|
303,460
|
|
|
10,399
|
|
|
7,320
|
|
|
-
|
|
|
-
|
|
|
323,633
|
|
|
Foreign exchange
adjustment
|
|
155,405
|
|
|
531,346
|
|
|
13,830
|
|
|
12,095
|
|
|
-
|
|
|
-
|
|
|
712,676
|
|
|
Balance, September 30,
2024
|
$
|
2,097,268
|
|
$
|
7,896,662
|
|
$
|
205,770
|
|
$
|
179,160
|
|
$
|
-
|
|
$
|
-
|
|
$
|
10,378,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
|
383,702
|
|
$
|
1,934,070
|
|
$
|
46,294
|
|
$
|
63,100
|
|
$
|
20,640,066
|
|
$
|
26,939
|
|
$
|
23,094,171
|
|
|
Balance, September 30,
2024
|
$
|
397,348
|
|
$
|
1,789,820
|
|
$
|
38,885
|
|
$
|
60,136
|
|
$
|
23,364,177
|
|
$
|
-
|
|
$
|
25,650,366
|
|
(i) Development assets are expenditures for the
underground mining operations in Omagh.
7. Exploration and Evaluation Assets
|
|
|
Acquisition
|
|
|
Exploration
|
|
|
|
|
|
Cost
|
|
costs
|
|
|
costs
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
$
|
-
|
|
$
|
2,665,313
|
|
$
|
2,665,313
|
|
|
Additions
|
|
1,140,115
|
|
|
1,162,710
|
|
|
2,302,825
|
|
|
Impairment
|
|
-
|
|
|
(282,493
|
)
|
|
(282,493
|
)
|
|
Foreign exchange
adjustment
|
|
-
|
|
|
90,764
|
|
|
90,764
|
|
|
Balance, December 31, 2023
|
|
1,140,115
|
|
|
3,636,294
|
|
|
4,776,409
|
|
|
Additions
|
|
-
|
|
|
422,865
|
|
|
422,865
|
|
|
Foreign exchange
adjustment
|
|
-
|
|
|
239,267
|
|
|
239,267
|
|
|
Balance, September 30,
2024
|
$
|
1,140,115
|
|
$
|
4,298,426
|
|
$
|
5,438,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
$
|
1,140,115
|
|
$
|
3,636,294
|
|
$
|
4,776,409
|
|
|
Balance, September 30,
2024
|
$
|
1,140,115
|
|
$
|
4,298,426
|
|
$
|
5,438,541
|
|
8. Decommissioning Liability
The Company's decommissioning liability is a result
of mining activities at the Omagh mine in Northern Ireland. The
Company estimated its decommissioning liability at September 30,
2024 based on a risk-free discount rate of 1% (December 31, 2023 -
1%) and an inflation rate of 1.50% (December 31, 2023 - 1.50%). The
expected undiscounted future obligations allowing for inflation are
GBP 330,000 and based on management's best estimate the
decommissioning is expected to occur over the next 5 to 10 years.
On September 30, 2024, the estimated fair value of the liability is
$665,158 (December 31, 2023 - $611,452). Changes in the provision
during the nine months ended September 30, 2024 are as follows:
|
|
|
As at
|
|
|
As at
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Decommissioning liability, beginning
of period
|
$
|
611,452
|
|
$
|
582,441
|
|
|
Accretion
|
|
8,226
|
|
|
10,601
|
|
|
Foreign exchange
|
|
45,480
|
|
|
18,410
|
|
|
Decommissioning liability, end of
period
|
$
|
665,158
|
|
$
|
611,452
|
|
As required by the Crown in Northern Ireland, the
Company is required to provide a bond for reclamation related to
the Omagh mine in the amount of GBP 300,000 (December 31, 2023 -
GBP 300,000), of which GBP 300,000 was funded as of September
30, 2024 (GBP 300,000 was funded as of December 31, 2023) and
reported as long-term deposit of $542,400 (December 31, 2023 -
$505,110).
9. Accounts Payable and Other
Liabilities
Accounts payable and other liabilities of the Company
are principally comprised of amounts outstanding for purchases
relating to exploration costs on exploration and evaluation assets,
general operating activities and professional fees activities.
|
|
|
As at
|
|
|
As at
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
2,106,262
|
|
$
|
2,131,257
|
|
|
Accrued liabilities
|
|
1,274,354
|
|
|
1,531,585
|
|
|
Total accounts payable and other
liabilities
|
$
|
3,380,616
|
|
$
|
3,662,842
|
|
The following is an aged analysis of the accounts
payable and other liabilities:
|
|
|
As at
|
|
|
As at
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Less than 3 months
|
$
|
566,979
|
|
$
|
1,672,744
|
|
|
3 to 12 months
|
|
1,102,367
|
|
|
807,338
|
|
|
12 to 24 months
|
|
896,142
|
|
|
474,290
|
|
|
More than 24 months (see also note
17)
|
|
815,128
|
|
|
708,470
|
|
|
Total accounts payable and other
liabilities
|
$
|
3,380,616
|
|
$
|
3,662,842
|
|
10.
Financing
Facilities
Amounts payable on the Company's financial facilities
are as follow:
|
|
|
As at
|
|
|
As at
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
G&F Phelps
|
|
|
|
|
|
|
|
Financing facility, beginning of
period
|
$
|
6,119,308
|
|
$
|
4,836,267
|
|
|
Financing facility transferred to due
to related parties (i)
|
|
(7,096,775
|
)
|
|
-
|
|
|
Accretion
|
|
-
|
|
|
259,354
|
|
|
Interest
|
|
633,566
|
|
|
961,722
|
|
|
Shares for debt settlement
|
|
-
|
|
|
(100,000
|
)
|
|
Foreign exchange
adjustment
|
|
343,901
|
|
|
161,965
|
|
|
|
|
-
|
|
|
6,119,308
|
|
|
Less
current portion
|
|
-
|
|
|
(6,119,308
|
)
|
|
Financing facilities - non-current portion
|
$
|
-
|
|
$
|
-
|
|
(i) During the nine months ended September 30, 2024,
the G&F Phelps loans were transferred to Ocean Partners with
the same terms.
11.
Convertible
Debentures
(i) On December 20, 2023, the Company closed a
$3,502,054 (US$ 2,627,000) convertible debenture. The convertible
debenture is unsecured, is for a term of three year commencing on
the date that it is issued, carries a coupon of 10% per annum and
is convertible into common shares of the Company. Each debenture
consists of US$1,000 principal amount of unsecured convertible
debentures. The convertible debentures have a term of 36 months
from the date of issuance with a conversion price of US$0.255 being
the equivalent of a conversion price of $0.35 per conversion share.
A four month hold period will apply to common shares converted
through the convertible debenture. The hold period expired on April
21, 2024.
In accordance with the terms of the convertible
debentures, if, at any time following the issuance of the
convertible debentures, the closing price of the common shares of
the Company on the TSXV equals or exceeds $0.70 per common share
for 10 consecutive trading days or more, the Company may elect to
convert all but not less than all of the outstanding principal
amount of the convertible debentures into conversion shares at the
conversion price, upon giving the holders of the convertible
debentures not less than 30 calendar days advance written notice.
On December 20, 2026, any outstanding principal amount of
convertible debentures plus any accrued and unpaid interest thereon
shall be repaid by the Company in cash.
Interest on the principal amount outstanding under
each convertible debenture shall accrue during the period
commencing on December 20, 2023 until December 20, 2026 and shall
be payable in cash on an annual basis on December 31st of each year
(each, an "Interest Payment Date"); provided, however, that the
first interest payment date shall be December 31, 2024. Each
convertible debenture shall bear interest at a minimum interest
rate of 10% per annum (the "Base Interest Rate"). During each
interest period (an "Interest Period"), being the period commencing
on December 20, 2023 to but excluding the first Interest Payment
Date and thereafter the period from and including an Interest
Payment Date to but excluding the next Interest Payment Date or
other applicable payment date, the Base Interest Rate will be
adjusted based on a gold price of US$2,000 per ounce, with the Base
Interest Rate being increased by 1% per annum for each US$100 in
which the average gold price for such Interest Period exceeds
US$2,000 per ounce, up to a maximum interest rate of 30% per annum;
provided, however, that, without the prior acceptance of the TSXV,
the average interest rate shall not exceed 24% per annum during the
term of the convertible debentures. Any adjustment to the Base
Interest Rate in respect of an Interest Period shall be calculated
based on the average gold price quoted by the London Bullion Market
Association, being the LBMA Gold Price PM, in respect of the
Interest Period ending on December 31, 2024, from December 20, 2023
to and including December 15, 2024, and for each subsequent
Interest Period, from January 1st to and including December 15th of
that year or 15 days prior to the applicable payment date.
Melquart, an insider and control person of the
Company (as defined by the TSXV), subscribed for US$875,000. Ocean
Partners, which has a common director with the Company, acquired
US$875,000 aggregate principal amount of convertible
debentures.
The Company paid a cash finder's fee of US$40,500
(CAD$53,990) and issued 158,823 non-transferable finder's warrants
to Canaccord Genuity Corp. in consideration for providing certain
finder services to the Company under the offering. Each finder
warrant is exercisable to acquire one common share in the capital
of the Company at an exercise price of $0.35 per common share at
any time on or before December 20, 2026. The fair value of the
158,823 finder warrants was estimated at $24,670 using the
Black-Scholes option pricing model with the following assumptions:
expected dividend yield - 0%, expected volatility - 107.02%,
risk-free interest rate - 3.71% and an expected average life of 3
years.
The debentures consist of the liability component and
conversion feature. Due to the convertible debenture being
denominated in US$, the conversion feature has been presented as a
non-cash derivative liability.
On the date of issuance, the fair value of the
derivative liability was estimated to be $1,495,208 using the
Black-Scholes option pricing model with the following assumptions:
expected dividend yield - 0%, expected volatility - 95.0%,
risk-free interest rate - 3.94% and an expected average life of 3
years.
As at December 31, 2023, the fair value of the
derivative liability was revalued at $1,245,627 using the
Black-Scholes option pricing model with the following assumptions:
expected dividend yield - 0%, expected volatility - 94.9%,
risk-free interest rate - 3.91% and an expected average life of
2.97 years.
On issuance the fair value of the liability component
was recorded at $2,006,846, discounted at an effective interest
rate of 37%.
The Company incurred transaction costs of $153,481
which was allocated pro-rata on the value of the conversion feature
and the liability component.
During the year ended December 31, 2023, the Company
recorded accretion expense of $33,265 and interest expense of
$29,184 as loan interest and bank charges less deposit interest in
the consolidated statement of loss.
As at September 30, 2024, the fair value of the
derivative liability was revalued at $385,491 using the
Black-Scholes option pricing model with the following assumptions:
expected dividend yield - 0%, expected volatility - 100%, risk-free
interest rate - 2.94% and an expected average life of 2.22
years.
During the three and nine months ended September 30,
2024, the Company recorded accretion expense of $185,128 and
$553,850, respectively and interest expense of $89,587 and
$268,019, respectively as loan interest and bank charges less
deposit interest in the unaudited condensed interim consolidated
statement of loss.
During the nine month ended September 30, 2024,
$82,404 (US$60,000) of convertible debenture was converted into
235,294 common shares of the Company.
(ii) On February 5, 2024, the Company announced that
it closed a debt settlement transaction, pursuant to which the
Company settled US$2,711,000 of indebtedness owing to Ocean
Partners through the issuance of US$2,711,000 aggregate principal
amount of unsecured convertible debentures of the Company.
The convertible debenture issued in connection with
the debt settlement were issued on substantially the same terms as
the unsecured convertible debentures closed on December 20, 2023.
The convertible debentures issued pursuant to the debt settlement
are subject to a four-month hold period which will expire on June
6, 2024.
The debentures consist of the liability component and
conversion feature. Due to the convertible debenture being
denominated in US$, the conversion feature has been presented as a
non-cash derivative liability.
On the date of issuance, the fair value of the
derivative liability was estimated to be $748,337 using the
Black-Scholes option pricing model with the following assumptions:
expected dividend yield - 0%, expected volatility - 95.0%,
risk-free interest rate - 4.28% and an expected average life of
2.87 years.
The fair value of the liability component was
recorded at $2,918,833, discounted at an effective interest rate of
20%.
As at September 30, 2024, the fair value of the
derivative liability was revalued at $407,116 using the
Black-Scholes option pricing model with the following assumptions:
expected dividend yield - 0%, expected volatility - 100%, risk-free
interest rate - 2.94% and an expected average life of 2.22
years.
During the three and nine months ended September 30,
2024, the Company recorded accretion expense of $148,660 and
$401,585, respectively and interest expense of $93,495 and
$252,565, respectively as loan interest and bank charges less
deposit interest in the unaudited condensed interim consolidated
statement of loss.
|
|
|
Convertible
|
|
|
Derivative
|
|
|
|
|
debenture
|
|
|
liability
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
$
|
-
|
|
$
|
-
|
|
|
Principal amount (i)
|
|
3,502,054
|
|
|
-
|
|
|
Derivative liability component
(i)
|
|
(1,495,208
|
)
|
|
1,495,208
|
|
|
Transaction costs (i)
|
|
(153,481
|
)
|
|
-
|
|
|
Transaction costs allocated to
derivative liability component (i)
|
|
7,695
|
|
|
(7,695
|
)
|
|
Interest expense (i)
|
|
29,184
|
|
|
-
|
|
|
Accretion expense (i)
|
|
33,265
|
|
|
-
|
|
|
Change in fair value (i)
|
|
-
|
|
|
(241,886
|
)
|
|
Balance, December 31, 2023
|
|
1,923,509
|
|
|
1,245,627
|
|
|
Principal amount (ii)
|
|
3,667,170
|
|
|
-
|
|
|
Derivative liability component
(ii)
|
|
(748,337
|
)
|
|
748,337
|
|
|
Convertible debenture converted
(i)
|
|
(82,404
|
)
|
|
-
|
|
|
Interest expense (i)(ii)
|
|
520,584
|
|
|
-
|
|
|
Accretion expense (i)(ii)
|
|
955,435
|
|
|
-
|
|
|
Change in fair value
(i)(ii)
|
|
-
|
|
|
(1,201,357
|
)
|
|
Balance, September 30, 2024
|
$
|
6,235,957
|
|
$
|
792,607
|
|
12.
Share Capital and
Reserves
a) Authorized share capital
At September 30, 2024, the authorized share capital
consisted of an unlimited number of common and preference shares
issuable in Series.
The common shares do not have a par value. All issued
shares are fully paid.
No preference shares have been issued. The preference
shares do not have a par value.
b)
Common shares
issued
At September 30, 2024, the issued share capital
amounted to $71,782,203. The continuity of issued share capital for
the periods presented is as follows:
|
|
|
Number of
|
|
|
|
|
|
|
|
common
|
|
|
|
|
|
|
|
shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
|
103,518,509
|
|
$
|
69,664,056
|
|
|
Shares issued in private placement
(i)
|
|
8,230,951
|
|
|
2,963,142
|
|
|
Shares issued for services
arrangement (ii)
|
|
933,334
|
|
|
420,000
|
|
|
Shares issued for debt settlement
(iii)
|
|
2,080,609
|
|
|
749,020
|
|
|
Warrants issued (i)(iii)
|
|
-
|
|
|
(1,609,634
|
)
|
|
Share issue costs (i)
|
|
-
|
|
|
(245,168
|
)
|
|
Exercise of warrants
|
|
78,000
|
|
|
40,733
|
|
|
Balance, September 30, 2023
|
|
114,841,403
|
|
$
|
71,982,149
|
|
|
|
|
Number of
common
shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
|
114,841,403
|
|
$
|
71,809,999
|
|
|
Shares cancelled
|
|
(306,110
|
)
|
|
(110,200
|
)
|
|
Convertible debenture converted (note
11(i))
|
|
235,294
|
|
|
82,404
|
|
|
Balance, September 30, 2024
|
|
114,770,587
|
|
$
|
71,782,203
|
|
(i) On March 27, 2023, the Company closed a
non-brokered private placement of 8,230,951 units at a price of
$0.36 per unit for gross proceeds of $2,963,142. Each unit consists
of one common share of the Company and one common share purchase
warrant, with each warrant entitling the holder to purchase an
additional common share at a price of $0.55 per share until March
27, 2028. The fair value of the 8,230,951 warrants was estimated at
$1,284,806 using the Black-Scholes option pricing model with the
following assumptions: expected dividend yield - 0%, expected
volatility - 126.22%, risk-free interest rate - 2.96% and an
expected average life of 5 years.
The Company paid the agents a cash commission equal
to $130,966 and issued 237,162 non-transferable broker warrants of
the Company. Each broker warrant is exercisable to acquire one
common share at an exercise price of $0.36 until March 27, 2025.
The fair value of the 237,162 warrants was estimated at $40,175
using the Black-Scholes option pricing model with the following
assumptions: expected dividend yield - 0%, expected volatility -
99.18%, risk-free interest rate - 3.61% and an expected average
life of 2 years.
Ocean Partners acquired 691,666 units for
consideration of $249,000 and Brendan Morris, an officer of the
Company, acquired 468,416 units for consideration of $168,630.
(ii) The Company has entered into an agreement to
acquire the historical Gairloch drill and exploration database for
(i) a payment of $420,000 (approximately GBP 252,153), to be
satisfied through the issuance of common shares of the Company
based on the 5-day volume weighted average price at the time of
signing (subject to the approval of the TSXV) and (ii) GBP 50,000
in cash. On April 13, 2023, the Company issued 933,334 common
shares per terms of the agreement.
(iii) On April 26, 2023, the Company agreed to the
terms of a proposed shares-for-debt transaction with several arm's
length creditors of the Company and agreed to settle a total of
approximately $749,020 of indebtedness through the issuance of an
aggregate of 2,080,609 units a deemed price of $0.36 per unit. Each
unit consists of one common share of the Company and one common
share purchase warrant, with each warrant entitling the holder to
purchase an additional common share at a price of $0.55 per share
until April 26, 2028. The fair value of the 2,080,609 warrants was
estimated at $324,828 using the Black-Scholes option pricing model
with the following assumptions: expected dividend yield - 0%,
expected volatility - 126.25%, risk-free interest rate - 2.98% and
an expected average life of 5 years.
c)
Warrant reserve
The following table shows the continuity of warrants
for the periods presented:
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
average
|
|
|
|
|
Number of
|
|
|
exercise
|
|
|
|
|
warrants
|
|
|
price
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
|
24,051,900
|
|
$
|
0.45
|
|
|
Issued (notes 12(b)(i)(iii) and
15(a)(vi))
|
|
11,148,722
|
|
|
0.54
|
|
|
Exercised
|
|
(78,000
|
)
|
|
0.40
|
|
|
Expired
|
|
(14,707,231
|
)
|
|
0.40
|
|
|
Balance, September 30, 2023
|
|
20,415,391
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
|
19,658,904
|
|
$
|
0.54
|
|
|
Expired
|
|
(820,000
|
)
|
|
0.45
|
|
|
Balance, September 30, 2024
|
|
18,838,904
|
|
$
|
0.54
|
|
The following table reflects the actual warrants
issued and outstanding as of September 30, 2024:
|
|
|
|
|
|
Grant date
|
|
|
Exercise
|
|
|
|
|
Number
|
|
|
fair value
|
|
|
price
|
|
|
Expiry date
|
|
of warrants
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31, 2025
|
|
500,000
|
|
|
65,527
|
|
|
0.55
|
|
|
February 13, 2025
|
|
100,000
|
|
|
16,984
|
|
|
0.41
|
|
|
February 28, 2025
|
|
7,666,669
|
|
|
1,644,859
|
|
|
0.55
|
|
|
March 27, 2025
|
|
407,962
|
|
|
40,175
|
|
|
0.36
|
|
|
December 20, 2026
|
|
158,823
|
|
|
24,670
|
|
|
0.35
|
|
|
March 27, 2028
|
|
7,924,841
|
|
|
1,284,806
|
|
|
0.55
|
|
|
April 26, 2028
|
|
2,080,609
|
|
|
324,828
|
|
|
0.55
|
|
|
|
|
18,838,904
|
|
|
3,401,849
|
|
|
0.54
|
|
d) Stock options
The following table shows the continuity of stock
options for the periods presented:
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
average
|
|
|
|
|
Number of
|
|
|
exercise
|
|
|
|
|
options
|
|
|
price
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
|
6,152,500
|
|
$
|
0.78
|
|
|
Expired
|
|
(25,000
|
)
|
|
1.10
|
|
|
Cancelled (i)
|
|
(340,000
|
)
|
|
0.76
|
|
|
Balance, September 30, 2023
|
|
5,787,500
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
|
5,862,500
|
|
$
|
0.78
|
|
|
Granted (ii)
|
|
3,175,000
|
|
|
0.23
|
|
|
Expired
|
|
(185,000
|
)
|
|
0.90
|
|
|
Cancelled (i)
|
|
(162,500
|
)
|
|
0.61
|
|
|
Balance, September 30, 2024
|
|
8,690,000
|
|
$
|
0.58
|
|
(i) The portion of the estimated fair value of
options granted in the current and prior periods and vested during
the three and nine months ended September 30, 2024, amounted to
$73,061 and $358,929, respectively (three and nine months ended
September 30, 2023 - $29,277 and $329,658, respectively). In
addition, during the three and nine months ended September 30,
2024, nil and 162,500 options granted in the current and prior
years were cancelled (three and nine months ended September 30,
2023 - nil and 340,000 options cancelled).
(ii) On April 29, 2024, the Company granted 3,175,000
stock options to directors, officers, employees and consultants of
the Company to purchase common shares at $0.23 per share until
April 29, 2029. The options will vest as to one third immediately
and one third on each of April 29, 2025 and April 29, 2026. The
fair value attributed to these options was $589,000 and the vested
portion was expensed in the unaudited condensed interim
consolidated statements of loss and credited to equity settled
share-based payments reserve.
The following table reflects the actual stock options
issued and outstanding as of September 30, 2024:
|
|
|
|
|
|
Weighted
average
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
remaining
|
|
|
Number of
|
|
|
options
|
|
|
Number of
|
|
|
|
|
Exercise
|
|
|
contractual
|
|
|
options
|
|
|
vested
|
|
|
options
|
|
|
Expiry date
|
|
price ($)
|
|
|
life
(years)
|
|
|
outstanding
|
|
|
(exercisable)
|
|
|
unvested
|
|
|
May 19, 2026
|
|
0.86
|
|
|
1.63
|
|
|
3,560,000
|
|
|
3,560,000
|
|
|
-
|
|
|
June 21, 2026
|
|
0.73
|
|
|
1.72
|
|
|
425,000
|
|
|
425,000
|
|
|
-
|
|
|
August 27, 2026
|
|
0.86
|
|
|
1.91
|
|
|
20,000
|
|
|
20,000
|
|
|
-
|
|
|
May 3, 2027
|
|
0.60
|
|
|
2.59
|
|
|
1,560,000
|
|
|
1,560,000
|
|
|
-
|
|
|
April 29, 2029
|
|
0.23
|
|
|
4.58
|
|
|
3,125,000
|
|
|
1,041,667
|
|
|
2,083,333
|
|
|
|
|
0.58
|
|
|
2.87
|
|
|
8,690,000
|
|
|
6,606,667
|
|
|
2,083,333
|
|
13. Net Loss per Common Share
The calculation of basic and diluted loss per share
for the three and nine months ended September 30, 2024 was based on
the loss attributable to common shareholders of $740,629 and
$2,985,864, respectively (three and nine months ended September 30,
2023 - $1,313,355 and $4,062,485, respectively) and the weighted
average number of common shares outstanding of 114,770,587 and
114,725,407, respectively (three and nine months ended September
30, 2023 - 114,841,403 and 110,976,336, respectively) for basic and
diluted loss per share. Diluted loss did not include the effect of
18,838,904 warrants (three and nine months ended September 30, 2023
- 20,415,391) and 8,690,000 options (three and nine months ended
September 30, 2023 - 5,787,500) for the three and nine months ended
September 30, 2024, as they are anti-dilutive.
14. Revenues
Shipments of concentrate under the off-take
arrangements commenced during the second quarter of 2019.
Concentrate sales provisional revenues during the three and nine
months ended September 30, 2024 totalled approximately US$197,000
(CAD$265,930) and US$528,000 (CAD$712,747), respectively (three and
nine months ended September 30, 2023 - US$333,000 (CAD$450,000) and
US$849,000 (CAD$1,148,000), respectively. However, until the mine
reaches the commencement of commercial production, the net proceeds
from concentrate sales will be offset against Development
assets.
15. Related Party Disclosures
Related parties pursuant to IFRS include the Board of
Directors, close family members, other key management individuals
and enterprises that are controlled by these individuals as well as
certain persons performing similar functions.
Related party transactions conducted in the normal
course of operations are measured at the exchange amount and
approved by the Board of Directors in strict adherence to conflict
of interest laws and regulations.
(a) The Company entered into the following
transactions with related parties:
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Interest on related party
loans
|
(i)
|
$
|
156,096
|
|
$
|
179,062
|
|
$
|
453,202
|
|
$
|
528,233
|
|
(i) Refer to note 15(a)(iv)(vi).
(ii) Refer to note 12(b).
(iii) Refer to note 11.
(iv) As at September 30, 2024, the Company owes Ocean
Partners $11,385,141 (December 31, 2023 - $5,673,150) which is
recorded as due to related parties on the unaudited condensed
interim consolidated statement of financial position.
|
|
|
September 30, December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
Balance, beginning of
period
|
$
|
5,673,150
|
|
$
|
4,978,069
|
|
|
Converted to convertible debentures
(note 11)
|
|
(2,575,382
|
)
|
|
-
|
|
|
Loans transferred to Ocean Partners
(note 10)
|
|
7,096,775
|
|
|
-
|
|
|
Repayment
|
|
-
|
|
|
(24,735
|
)
|
|
Accretion
|
|
-
|
|
|
116,569
|
|
|
Interest
|
|
390,042
|
|
|
729,033
|
|
|
Foreign exchange
adjustment
|
|
800,556
|
|
|
(125,786
|
)
|
|
Balance, end of period
|
|
11,385,141
|
|
|
5,673,150
|
|
|
Less
current balance
|
|
(11,385,141
|
)
|
|
(5,673,150
|
)
|
|
Due
to related parties - non-current balance
|
$
|
-
|
|
$
|
-
|
|
(v) In February 2024, the loan balance due to Ocean
Partner was converted to convertible debentures. Refer to note 11.
As at September 30, 2024, balance related to the loan is recorded
as other liability on the unaudited condensed interim consolidated
statement of financial position is $nil (December 31, 2023 -
$1,187,437).
(vi)
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
Melquart Limited
|
|
|
|
|
|
|
|
Financing facilities, beginning of
period
|
$
|
638,432
|
|
$
|
-
|
|
|
Financing facility
received
|
|
-
|
|
|
580,392
|
|
|
Less bonus warrants issued
|
|
-
|
|
|
(16,984
|
)
|
|
Accretion
|
|
6,370
|
|
|
7,077
|
|
|
Interest
|
|
63,160
|
|
|
64,095
|
|
|
Foreign exchange
adjustment
|
|
49,927
|
|
|
3,852
|
|
|
Balance, end of period
|
|
757,889
|
|
|
638,432
|
|
|
Less
current portion
|
|
(757,889
|
)
|
|
-
|
|
|
Due
to related parties - non-current balance
|
$
|
-
|
|
$
|
638,432
|
|
(b) Remuneration of officer and directors of the
Company was as follows:
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Salaries and
benefits (1)
|
$
|
88,695
|
|
$
|
115,413
|
|
$
|
309,009
|
|
$
|
340,062
|
|
|
Stock-based compensation
|
|
50,266
|
|
|
20,992
|
|
|
245,962
|
|
|
242,340
|
|
|
|
$
|
138,961
|
|
$
|
136,405
|
|
$
|
554,971
|
|
$
|
582,402
|
|
(1) Salaries and benefits include director
fees. As at September 30, 2024, due to directors for fees amounted
to $140,000 (December 31, 2023 - $140,000) and due to officers,
mainly for salaries and benefits accrued amounted to $139,429
(December 31, 2023 - $25,106), and is included with due to related
parties.
(c) As at September 30, 2024, the issued shares of
Galantas total 114,841,403. Ross Beaty owns 3,744,747 common shares
of the Company or approximately 3.3% of the outstanding common
shares. Premier Miton owns 4,848,243 common shares of the Company
or approximately 4.2%. Melquart owns, directly and indirectly,
28,140,195 common shares of the Company or approximately 24.5% of
the outstanding common shares of the Company. G&F Phelps owns
5,353,818 common shares of the Company or approximately 4.7%. Eric
Sprott owns 10,166,667 common shares of the Company or
approximately 8.9%. Mike Gentile owns 6,217,222 common shares of
the Company or approximately 5.4%.
Excluding the Melquart Ltd, Premier Miton, Mr. Beaty,
Mr. Phelps, Mr. Sprott and Mr. Gentile shareholdings discussed
above, the remaining 49% of the shares are widely held, which
includes various small holdings which are owned by directors of the
Company. These holdings can change at anytime at the discretion of
the of the owner.
The Company is not aware of any arrangements that may
at a subsequent date result in a change in control of the
Company.
16. Segment Disclosure
The Company has determined that it has one reportable
segment. The Company's operations are substantially all related to
its investment in Cavanacaw and its subsidiaries, Omagh and
Flintridge. Substantially all of the Company's revenues, costs and
assets of the business that support these operations are derived or
located in Northern Ireland. Segmented information on a geographic
basis is as follows:
|
September 30, 2024
|
|
United
Kingdom
|
|
|
Canada
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
$
|
551,033
|
|
$
|
1,153,197
|
|
$
|
1,704,230
|
|
|
Non-current assets
|
$
|
29,789,956
|
|
$
|
1,841,351
|
|
$
|
31,631,307
|
|
|
Revenues
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023
|
|
United
Kingdom
|
|
|
Canada
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
$
|
1,831,473
|
|
$
|
2,376,856
|
|
$
|
4,208,329
|
|
|
Non-current assets
|
$
|
26,702,212
|
|
$
|
1,673,478
|
|
$
|
28,375,690
|
|
|
Revenues
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
17. Contingency
During the year ended December 31, 2010, the
Company's subsidiary Omagh received a payment demand from Her
Majesty's Revenue and Customs ("HMRC") in the amount of $550,156
(GBP 304,290) in connection with an aggregate levy arising from the
removal of waste rock from the mine site during 2008 and early
2009. Omagh believed this claim to be without merit. An appeal was
lodged with the Tax Tribunals Service and the hearing started at
the beginning of March 2017 and following a number of adjournments
was completed in August 2018. During the year ended December 31,
2019, the Tax Tribunals Service issued their judgement dismissing
the appeal by Omagh in respect of the assessments. A provision has
now been included in the unaudited condensed interim consolidated
financial statements in respect of the aggregates levy plus
interest and penalty.
There is a contingent liability in respect of
potential additional interest which may be applied in respect of
the aggregates levy dispute. Omagh is unable to make a reliable
estimate of the amount of the potential additional interest that
may be applied by HMRC.