Galantas Gold Corporation (the Company) (TSX VENTURE:GAL)(AIM:GAL) is pleased to
announce its interim results for the nine months ended September 30th 2013 and
third quarter results for the three months ended September 30th 2013.
Financial Highlights
Highlights of the 2013 third quarter's and first nine months results, which are
expressed in Canadian Dollars, are:
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All figures Third Quarter Ended Nine Months Ended
denominated in September 30 September 30
Canadian Dollars
(CDN$) 2013 2012 2013 2012
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Revenue $ 473,668 $ 855,813 $ 1,362,200 $ 3,783,939
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Cost of Sales $ 437,995 $ 792,386 $ 1,347,416 $ 2,806,197
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Income before the
undernoted $ 35,673 $ 63,427 $ 14,784 $ 977,742
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Amortization $ 115,105 $ 155,078 $ 361,935 $ 526,267
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General
administrative
expenses $ 262,189 $ 374,078 $ 853,969 $ 1,241,038
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(Gain) on sale of
plant and
equipment $ (592) $ (1,147) $ (65,123) $ (15,593)
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(Gain) on debt
extinguishment $ 0 $ 0 $ 0 $ (190,624)
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Foreign exchange
loss $ 22,715 $ 31,078 $ 25,964 $ 11,969
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Net (Loss) for the
period $ (363,744) $ (495,660) $ (1,161,961) $ (595,315)
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Working Capital
(Deficit) $ (3,477,309) $ (1.672,628) $ (3,477,309) $ (1,672,628)
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Cash (loss) from
operating
activities before
changes in non-
cash working
capital $ (318,599) $ (289,853) $ (881,526) $ (36,850)
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Cash at September
30, 2013 $ 216,512 $ 2,021,513 $ 216,512 $ 2,021,513
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The Net Loss for the three months ended September 30, 2013, amounted to CDN$
363,744 (2012 Q3: Net Loss CDN$ 495,660) and the cash loss from operating
activities before changes in non-cash working capital in the third quarter of
2013 amounted to CDN$ 318,599 (2012 Q3:Cash loss CDN$ 289,853). The cash
generated from processing low grade material at the Omagh mine was positive on a
strict operational basis before the inclusion of administration costs and
overheads in the third quarter (Q3), following a reduction in costs.
Sales revenues for the nine months ended September 30, 2013 amounted to CDN$
1,362,200 (2012: CDN$ 3,783,939) with sales revenues for the three months ended
September 30, 2013 amounted to CDN$ 473,668 (Q3 2012: CDN$ 855,813). This
reduction in sales revenues is due to the lower level of metal produced and
shipped during both periods primarily due to the requirement to process ore from
the low grade stockpile at the Omagh mine as a result of difficulties in
accessing ore from the open pits. The gold price for the third quarter and first
nine months of 2013 was below the price that prevailed in 2012 which has also
adversely impacted sales revenues.
Cost of sales for the nine months ended September 30, 2013 amounted to CDN$
1,347,416 (2012: CDN$ 2,806,197). Cost of sales for the three months ended
September 30, 2013 amounted to CDN $ 437,995 (Q3 2012: CDN$ 792,386). There was
a decrease in various production costs at the Omagh mine during the third
quarter, including production wages reflecting the reduced number of personnel
arising from the rationalization programme, Oil and Fuel costs, Repairs and
servicing costs, Equipment hire and usage of Consumables which reductions were
primarily attributable to the reduced level of open pit mining during both
periods when compared with 2012.
The Net Loss for the nine months ended September 30, 2013, amounted to CDN$
1,161,961 (2012: Net Loss CDN$ 595,315). The cash loss from operating activities
before changes in non-cash working capital for the nine months of 2013 amounted
to CDN$ (881,526) (2012: Cash loss $ 36,850).
Production
Production for comparative periods are summarized below:
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Three Months to Three Months to Nine Months to Nine Months to
September 30 September 30 September 30 September 30
2013 2012 2013 2012
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Tonnes Milled 12,180 11,292 35,951 35,748
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Average Grade
g/t gold 1.37 1.9 1.32 2.4
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Concentrate
Dry Tonnes 173.3 226.7 463.3 849.7
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Concentrate
Gold Grade
g/t 82.4 95.2 87.2 101.6
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Gold Produced
(oz) 459 696 1,297.7 2,780
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Gold Produced
(kg) 14.3 21.6 40.4 86.4
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Concentrate
Silver Grade
g/t 185.7 117.3 169.8 238
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Silver
Produced (oz) 1,035 856 2,530 6,498
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Silver
Produced (kg) 32.2 26.6 78.7 202
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Lead Produced
tonnes 15.5 10.1 37.5 58.4
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Gold
Equivalent
(oz) 500 722 1,380 2,973
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Concentrate production at the Omagh mine during the three and nine months ended
September 30, 2013 was significantly below production levels of the
corresponding periods of 2012 due primarily to the to the requirement to process
lower grade ore from the stockpile as a result of difficulties in accessing ore
from the open pits.
The main production focus during the third quarter has been on the processing of
ore from the low grade stockpile. Earlier in the year there had been some
limited open pit mining on the Kerr vein which ceased later in the first quarter
when the pit met its planned design limit. From the second half of 2012 mining
from the Kearney pit had become totally restricted as a result of the surplus
rock stockpile on the site reaching capacity levels. This surplus rock was due
to be transported from the site in 2012 with the Omagh mine having completed
construction of public road improvements, at its own cost, to comply with the
conditions of the planning consent. However, following a judicial review brought
by a private individual on the grounds of procedural failings by Planning
Service, the planning consent was quashed with the surplus rock remaining on
site. This ongoing limitation will result in future production continuing to be
from low grade sources. To generate cash from its operations going forward, the
Company continued to improve efficiencies and cut costs during the third
quarter.
During the three and nine months ended September 30, 2013 the mill was fed with
the lower grade ore and production continued to be hampered by both the ongoing
variations in the metallurgy due to the inconsistent grade of ore being milled
and the clay content of stocked material. The concentrate gold grade fell during
the third quarter and subsequent to September 30, 2013 the gold grade has
weakened further. This has resulted in the Company commencing a review regarding
the economics of continuing in production. In the meantime, further cost
reduction measures are being implemented.
The 2013 production figures and metal contents are provisional and subject to
averaging or umpiring provisions under the concentrate off - take agreement
detailed in a press release dated October 3, 2007.
Exploration
The major focus of exploration activities in 2012 and the first nine months of
2013 has been the continuation of the successful drilling program. In total,
17,348 metres have been drilled since the program commenced in March 2011 with
significant gold intersects being reported.
The drilling programme began in 2011 with the objective of extending the depth
and extent of the Joshua vein and providing data for a potential underground
operation based upon the Joshua and Kearney veins. During 2011 and 2012 ninety
five holes were drilled totaling 16,704 metres. Channel sampling was also
carried out, during this period, on the Joshua, Kearney and Kerr vein systems.
On Joshua, a total strike length of 213 metres was sampled. On Kerr, an increase
in average vein width and gold grade was identified within depth over a 30 metre
strike length.
The exploration programme had expanded considerably in 2012 with six drills
operational during the first half of the year. The second half of the year saw
the number of rigs progressively reduce with one rig, owned by the Company,
remaining in operation by the end of 2012. The two principal objectives of the
drilling programme were to complete the deeper holes on Kearney in order to gain
a more accurate picture of the zone of mineralization for the purpose of the
underground mine plan and to extend the strike of Joshua to the north and the
south, and begin to target deeper sections of the vein. Drilling continued at a
reduced rate in 2013 but this work has now been suspended, pending the
availability of cash for further exploration. Following the scale back of
drilling in 2013, more time was dedicated to logging remaining drill cores, the
sealing off of all accessible drill holes, updating databases and progressing
towards a resource estimate using the Micromine geological modelling computer
program.
Assay results released to date from both the drilling and channel sampling
programme have been encouraging with significant gold intersections being
identified. The updated resource estimate (Technical Report July 2013) contains
all material data related to the program (with the exception of one hole
detailed in a disclosure dated 27th August 2013). Results to date have been
positive, in particular the assays from the ten drill holes on Joshua released
in January 2013 with thirteen significant mineral intersects. During the quarter
Galantas reported positive assay results from the first drill hole completed on
the Joshua vein during the third quarter. This drill hole is the second deepest
intersect yet drilled on Joshua Vein and averaged 12.4 g/t gold, over a true
width of vein of 2.8 metres. The top of the mineralised intersect is estimated
to be at a vertical depth of 137.2 metres. The hole was terminated at a
down-hole length of 171.8 metres (see press release dated August 27, 2013).
Once additional funding becomes available this drilling programme will continue.
Up to a further 1,000 metres of drilling are planned, following up the recently
reported gold intersects on the Joshua vein.
During 2012 the Company ACA Howe International Ltd (Howe UK) completed an
Interim Resource Estimate to Canadian National Instrument NI 43-101 compliant
mineral resource estimate and a Preliminary Economic Assessment for the Omagh
Gold Project (see press release dated July 3, 2012) This report, which was based
on drilling results and analyses received to June 8, 2012, identified all
resources discovered at that date. The Company subsequently filed a complete
Technical Report on SEDAR in August 2012. An updated resource estimate was
prepared by the Company during the second quarter based on drilling results
received to May 5, 2013 (see press release dated June 12, 2013). The drilling
program, subsequent to June 2012, was targeted to increase the amount of
measured and indicated resources related to the potential development of an
underground mine. There has been an 50% increase in resources classified as
measured and indicated from a total of 95,300 troy ounces gold (2012) to 142,533
troy ounces gold and a 28% increase in Resources classified as inferred, from
231,000 troy ounces gold (2012) to 295,599 troy ounces gold (2013). The overall
increase is 34%. Subsequent to June 30, 2013 Galantas filed an updated Technical
Report on SEDAR in July 2013.
Limited exploration outside the mine licence area continued during the first
half of 2013. With regards to the seven licenses held in the Republic of
Ireland, geochemical soil sampling and geophysical data generated by the Tellus
Border Project, a cross border initiative funded by the EU regional development
fund, was released earlier in the year. The data revealed the continuation of a
trend established on licence OM4 with anomalously high concentrations of gold
pathfinder elements. This data has assisted in the design of a field programme
which was carried out during the third quarter. Earlier in the year Omagh
Minerals were awarded a grant to complete a project which will determine the
prospectivity potential of the Tellus border zone as a whole. This research is
supported by the EU INTERREG IVA-funded Tellus Border project, a cross border
initiative financed by the EU regional development fund. It is based around the
new Tellus Border data and the associated fieldwork was carried out during the
third quarter. Application has been made for a further two prospecting licenses
in the Republic of Ireland which were acknowledged during the quarter and are
now awaiting a final decision.
Planning
Discussions continued with the planning services in Northern Ireland during the
third quarter of 2013 with regards to the planning application for an
underground mine plan and accompanying Environmental Statement which were
submitted to the Planning Services in 2012. Consultations with statutory
consultees continues to progress, with additional information requested now
filed with the Planning Service for consideration by consulteees.
Roland Phelps, President & CEO, Galantas Gold Corporation, commented, "The
Company continues to work with Planning Service and consultees to achieve
underground planning consent. The Company has been advised by its consultants
that the time-line for planning determination will likely now slip into Q1 2014
although the date is undefined because it is in the hands of other parties.
Further cost reductions are being made and we look forward to updating
shareholders in due course."
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. Some of the production and metal figures are provisional and
subject to averaging or umpiring provisions under the concentrate off-take
contract with Xstrata Corporation (now Glencore Canada Corporation) detailed in
a press release dated 3rd October 2007.
The financial disclosure has been reviewed by Leo O' Shaughnessy (Chief
Financial Officer) and other disclosure by Roland Phelps (President & CEO),
qualified persons under the meaning of NI. 43-101. The information is based upon
financial and other 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; mining operational
risk; regulatory restrictions, including environmental regulatory restrictions
and liability; risks of sovereign involvement; speculative nature of gold
exploration; dilution; competition; loss of key employees; additional funding
requirements; 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.
Galantas Gold Corporation Issued and Outstanding Shares total 256,210,395.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Galantas Gold Corporation
Jack Gunter P.Eng
Chairman
+44 (0) 2882 241100
Galantas Gold Corporation
Roland Phelps C.Eng
President & CEO
+44 (0) 2882 241100
info@galantas.com
www.galantas.com
Charles Stanley Securities (Nominated Adviser)
Mark Taylor
Telephone +44 (0)20 7149 6000
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