TIDMGAL
RNS Number : 9268H
Galantas Gold Corporation
24 August 2016
GALANTAS GOLD CORPORATION
TSXV & AIM : Symbol GAL
GALANTAS REPORTS RESULTS FOR THE THREE AND SIX MONTHSED JUNE 30,
2016
August 24, 2016: Galantas Gold Corporation (the 'Company') is
pleased to announce its financial results for the three and six
months ended June 30, 2016.
Financial Highlights
Highlights of the 2016 second quarter's and first six months
results, which are expressed in Canadian Dollars, are summarized
below:
All figures denominated in Canadian Dollars (CDN$)
Second Quarter Ended Six Months Ended
June 30 June 30
2016 2015 2016 2015
-------------------------------------------------------- ---------------------------- ------------------------------
Revenue $ 1,648 $ 13,774 $ 29,721 $ 14,897
-------------------------------------------------------- ------------- ------------- --------------- -------------
Cost of Sales $ (88,572) $ (114,656) $ (210,103) $ (184,653)
-------------------------------------------------------- ------------- ------------- --------------- -------------
Loss before the undernoted $ (86,924) $ (100,882) $ (180,382) $ (169,756)
-------------------------------------------------------- ------------- ------------- --------------- -------------
Depreciation $ (42,732) $ (49,881) $ (90,283) $ (102,174)
-------------------------------------------------------- ------------- ------------- --------------- -------------
General administrative expenses $ (419,506) $ (624,852) $ (755,617) $ (886,384)
-------------------------------------------------------- ------------- ------------- --------------- -------------
Gain on sale of property, plant and equipment $ 5,479 $ 0 $ 5,479 $ 0
-------------------------------------------------------- ------------- ------------- --------------- -------------
Unrealized gain on fair value of derivative financial
liability $ 1,000 $ 95,000 $ 80,000 $ 103,000
-------------------------------------------------------- ------------- ------------- --------------- -------------
Foreign exchange loss $ (103,146) $ (28,142) $ (78,371) $ (67,542)
-------------------------------------------------------- ------------- ------------- --------------- -------------
Net Loss for the period $ ( 645,829) $ (708,757) $ (1,019,174) $ (1,122,856)
-------------------------------------------------------- ------------- ------------- --------------- -------------
Working Capital Deficit $ (2,068,440) $ (4,273,046) $ (2,068,440) $(4,273,046)
-------------------------------------------------------- ------------- ------------- --------------- -------------
Cash loss from operating activities before changes in
non-cash working capital $ (300,796) $ (457,670) $ (337,823) $ (958,758)
-------------------------------------------------------- ------------- ------------- --------------- -------------
Cash at June 30, 2016 $ 1,312,989 $ 198,696 $ 1,312,989 $ 198,696
-------------------------------------------------------- ------------- ------------- --------------- -------------
The Net Loss for the three months ended June 30, 2016 amounted
to CDN$ 645,829 (2015:CDN$ 708,757) and the cash loss from
operating activities before changes in non-cash working capital for
the second quarter of 2016 amounted to CDN$ 300,796 (2015 Q2: CDN$
457,670). The Net Loss for the six months ended June 30, 2016
amounted to CDN$ 1,019,174 (2015:CDN$ 1,122,856) and the cash loss
from operating activities before changes in non-cash working
capital for the first six months of 2016 amounted to CDN$ 337,823
(2015: CDN$ 958,758).
Sales revenues for the second quarter and six months ended June
30, 2016 consisted of jewelry sales and amounted to CDN$ 1,648 and
CDN$ 29,721 respectively (2015: CDN $ 13,774 and $ 14,897
respectively). Following the suspension of production during the
fourth quarter of 2013 there have not been any shipments of
concentrates from the mine.
Cost of sales, which includes production costs and inventory
movement, for the second quarter and six months ended June 30, 2016
amounted to CDN$ 88,572 and $ 210,103 respectively (2015: CDN$
114,656 and $ 184,653). Production costs were mainly in connection
with ongoing care, maintenance and restoration costs at the Omagh
mine site.
The Company had cash balances of $ 1,312,989 at June 30, 2016
compared to $ 198,696 at June 30, 2015. The working capital deficit
at June 30, 2016 amounted to $ 2,068,440 compared to a working
capital deficit of $ 4,273,046 at June 30, 2015.
During the second quarter the Company announced a private
placement of shares and shares for debt exchange. Placing priority
was given to existing shareholders, with 18,619,841 common shares
issued, at a price of CDN$ 0.07875 per common share for a total of
CDN $1,466,312. The majority of the placement was taken up by Mr.
Ross Beaty, who acquired 12,825,397 common shares. As a consequence
of the placing, Mr. Beaty has an interest in 28,825,397 Common
Shares or 20.9% of the Company's issued common shares.
In addition to the private placement, Roland Phelps, President
& CEO, Galantas Gold Corporation, entered into a shares for
debt exchange on the same terms as the placement. Mr. Phelps
exchanged $ 935,852 debt accruing to him for 11,883,835 common
shares. Shareholder consent was received for the debt exchange by
means of a written resolution, with a majority of disinterested
shareholder votes consenting. Following the debt exchange, Mr.
Phelps holds 33,356,750 common shares, representing 24.2% of the
enlarged number of common shares in issue.
Production
Production at the Omagh mine remains suspended. However the
granting of planning consent during the 2015 for an underground
operation at the Omagh site, now subject to a judicial review to be
heard in September 2016, will permit the continuation and expansion
of gold mining. The underground mine will utilize the same
processing methods. The strategy is to establish the underground
mine as soon as finance is available and look for further expansion
of gold resources on the property, which has many undrilled
targets.
Exploration
The drilling program, which recommenced in September 2015,
continued into the first quarter of 2016 with two drill rigs in
operation and a further six holes were completed before the rigs
left the site in March. In early 2016 Galantas reported the assay
results for three holes completed in 2015 (see press release dated
January 26, 2016). Most notable was hole OML-DD-15-155 which
intersected a wide zone (13 m true width) of the Joshua vein at a
vertical depth of 117 m grading 9.9 g/t Au. This drilling program
also identified a new vein, Kestrel, running 70 m west of Joshua.
An initial shallow (42.4 m) intersect returned 35.8 g/t Au over 0.7
m (true width). A later second hole targeted the Kestrel vein
approximately 80m north of the previous hole and hit mineralisation
at a vertical depth of 73 m (3.2 g/t Au over 1.2 m true width). A
detailed table of drilling data is included in an addendum to this
release.
Following extensive geological review, which included a detailed
mapping study reported on 9(th) August 2016, new targets have been
outlined in preparation for future drilling.
An area of PL3039 in the Republic Of Ireland was revisited
during Q2. The results of earlier fieldwork had shown bedrock gold
anomalies of 2.1 and 1.8 g/t, associated with significant silver.
Recent excavations of the site for construction purposes revealed
narrow mineralised quartz veins along 5 m strike. Samples of these
were taken for analysis.
Permitting
In June 2015 the Company reported that the Minister of
Environment, Northern Ireland had granted planning consent for an
underground gold mine at the Omagh site. The planning consent will
permit the continuation and expansion of gold mining and is
expected to create hundreds of jobs locally. The positive decision
is the result of 3 years of examination of environmental and other
factors regarding the application. Included were environmental
studies by NIEA (Northern Ireland Environment Agency) and
independent specialists. The consent includes operating and
environmental conditions, which the Company has reviewed. Some
conditions require clarification but appear workable with some
modifications to operating and construction methodology. A number
of conditions precedent to development are required to be satisfied
and the Company is carrying those out.
Later in 2015 Galantas reported that they had been made aware of
pre-action correspondence from an individual who intends to
challenge, by judicial review, the actions of the Department of
Environment Northern Ireland (DOENI) in granting planning
permission for underground mining beneath the existing open pit.
During the first quarter, Galantas confirmed that this third party
had obtained leave from Belfast High Court to bring a judicial
review of the planning consent granted by Department of Environment
Northern Ireland, for the Company's underground mine. The review is
scheduled to be heard in September 2016.
Roland Phelps, President & CEO, Galantas Gold Corporation,
commented, "Rehabilitation work at the mine has been continued
during the last quarter. Additional conditions precedent to the
underground planning permit have been satisfied. The processing
plant has been subject to throughput checks and is operational,
awaiting ore. Initial underground mining equipment is receiving
modification to suit Galantas requirements and is expected to be
delivered shortly. The exploration program continues to progress
well, with a new vein discovered, our best ever drilling result in
terms of gold accumulation in Hole 155 and new targets added."
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.
http://www.rns-pdf.londonstockexchange.com/rns/9268H_-2016-8-23.pdf
Qualified Person
The financial components of this disclosure has been reviewed by
Leo O' Shaughnessy (Chief Financial Officer) and the production,
exploration and permitting components by Roland Phelps (President
& CEO), 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.
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.
Enquiries
Galantas Gold Corporation
Jack Gunter P.Eng - Chairman
Roland Phelps C.Eng - President & CEO
Email: info@galantas.com
Website: www.galantas.com
Telephone: +44 (0) 2882 241100
Grant Thornton UK LLP (Nomad)
Philip Secrett, Richard Tonthat
Telephone: +44(0)20 7383 5100
Whitman Howard Ltd (Broker & Corporate Adviser)
Ranald McGregor-Smith, Nick Lovering
Telephone: +44(0)20 7659 1234
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
June 30, December 31,
2016 2015
----------------------------------------------------- ----------- ------------
ASSETS
Current assets
Cash $ 1,312,989 $ 1,518,332
Accounts receivable and prepaid expenses (note 4) 180,579 249,659
Inventories (note 5) 24,804 43,875
----------------------------------------------------- ----------- ------------
Total current assets 1,518,372 1,811,866
Non-current assets
Property, plant and equipment (note 6) 7,583,541 8,686,902
Long-term deposit (note 8) 516,750 612,210
Exploration and evaluation assets (note 7) 2,032,985 2,371,328
----------------------------------------------------- ----------- ------------
Total non-current assets 10,133,276 11,670,440
----------------------------------------------------- ----------- ------------
Total assets $ 11,651,648 $ 13,482,306
----------------------------------------------------- ----------- ------------
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities (note 9) $ 817,473 $ 1,388,762
Current portion of financing facility (note 10) 7,450 6,947
Due to related parties (note 14) 2,761,889 4,022,216
----------------------------------------------------- ----------- ------------
Total current liabilities 3,586,812 5,417,925
Non-current liabilities
Non-current portion of financing facility (note 10) 26,128 31,122
Decommissioning liability (note 8) 543,948 637,988
Derivative financial liability (note 11(c)) 52,000 132,000
----------------------------------------------------- ----------- ------------
Total non-current liabilities 622,076 801,110
----------------------------------------------------- ----------- ------------
Total liabilities 4,208,888 6,219,035
----------------------------------------------------- ----------- ------------
Capital and reserves
Share capital (note 11(a)(b)) 36,331,577 33,960,190
Reserves 7,306,222 8,478,946
Deficit (36,195,039) (35,175,865)
----------------------------------------------------- ----------- ------------
Total equity 7,442,760 7,263,271
----------------------------------------------------- ----------- ------------
Total equity and liabilities $ 11,651,648 $ 13,482,306
----------------------------------------------------- ----------- ------------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
Going concern (note 1)
Contingency (note 16)
Event after the reporting period (note 17)
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
------------------------------------------- ----------- ---------- ----------- -----------
Revenues
Gold sales $ 1,648 $ 13,774 $ 29,721 $ 14,897
Cost and expenses of operations
Cost of sales (note 13) 88,572 114,656 210,103 184,653
Depreciation (note 6) 42,732 49,881 90,283 102,174
------------------------------------------- ----------- ---------- ----------- -----------
131,304 164,537 300,386 286,827
------------------------------------------- ----------- ---------- ----------- -----------
Loss before general administrative and
other (incomes) expenses (129,656) (150,763) (270,665) (271,930)
------------------------------------------- ----------- ---------- ----------- -----------
General administrative expenses
Management and administration wages
(note 14) 165,550 130,548 343,493 261,167
Other operating expenses 22,590 11,715 44,147 45,487
Accounting and corporate 15,768 15,688 31,233 31,084
Legal and audit 97,064 19,098 147,466 40,908
Stock-based compensation (note
11(d)(i)(ii)) - 338,000 - 338,000
Shareholder communication and
investor relations 78,998 67,927 118,078 98,144
Transfer agent 7,609 8,653 9,232 10,633
Director fees (note 14) 8,250 10,500 13,250 15,500
General office 1,933 1,984 3,882 3,965
Accretion expenses (note 8) 2,916 2,976 6,018 5,942
Loan interest and bank charges (note
14) 18,828 17,763 38,818 35,554
------------------------------------------- ----------- ---------- ----------- -----------
419,506 624,852 755,617 886,384
Other (incomes) expenses
Gain on disposal of property, plant
and equipment (5,479) - (5,479) -
Unrealized gain on fair value of
derivative financial liability
(note 11(c)) (1,000) (95,000) (80,000) (103,000)
Foreign exchange loss 103,146 28,142 78,371 67,542
------------------------------------------- ----------- ---------- ----------- -----------
96,667 (66,858) (7,108) (35,458)
------------------------------------------- ----------- ---------- ----------- -----------
Net loss for the period $ (645,829) $ (708,757) $ (1,019,174) $ (1,122,856)
------------------------------------------- ----------- ---------- ----------- -----------
Basic and diluted net loss per share (note
12) $ (0.01) $ (0.01) $ (0.01) $ (0.01)
------------------------------------------- ----------- ---------- ----------- -----------
Weighted average number of common
shares outstanding - basic and diluted 114,263,285 87,297,154 110,765,807 84,533,844
------------------------------------------- ----------- ---------- ----------- -----------
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 Other Comprehensive (Loss) Income
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
-------------------------------------------- ----------- --------- ----------- -----------
Net loss for the period $ (645,829) $ (708,757) $ (1,019,174) $ (1,122,856)
Other comprehensive (loss) income
Items that will be reclassified subsequently
to profit or loss
Foreign currency translation differences (536,851) 254,815 (1,172,724) 509,214
-------------------------------------------- ----------- --------- ----------- -----------
Total comprehensive loss $ (1,182,680) $ (453,942) $ (2,191,898) $ (613,642)
-------------------------------------------- ----------- --------- ----------- -----------
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)
Six Months Ended
June 30,
2016 2015
------------------------------------------------------------------------------ ----------- -----------
Operating activities
Net loss for the period $ (1,019,174) $ (1,122,856)
Adjustment for:
Depreciation 90,283 102,174
Stock-based compensation (note 11(d)(i)(ii)) - 338,000
Interest expense 18,497 -
Foreign exchange 652,032 (179,018)
Gain on disposal of property, plant and equipment (5,479) -
Accretion expenses (note 8) 6,018 5,942
Unrealized gain on fair value of derivative financial liability (note 11(c)) (80,000) (103,000)
Non-cash working capital items:
Accounts receivable and prepaid expenses 69,080 (5,478)
Inventories 19,071 39,546
Accounts payable and other liabilities (571,289) 139,931
Due to related parties (342,972) 494,047
------------------------------------------------------------------------------ ----------- -----------
Net cash used in operating activities (1,163,933) (290,712)
------------------------------------------------------------------------------ ----------- -----------
Investing activities
Purchase of property, plant and equipment (361,780) (85,995)
Proceeds from sale of property, plant and equipment 34,548 -
Exploration and evaluation assets (22,045) (102,442)
------------------------------------------------------------------------------ ----------- -----------
Net cash used in investing activities (349,277) (188,437)
------------------------------------------------------------------------------ ----------- -----------
Financing activities
Proceeds of private placement 1,466,312 607,062
Share issue costs (30,777) (49,197)
Advances from related parties - 45,318
Proceeds from financing facility - 39,032
Repayment of financing facility (6,537) -
------------------------------------------------------------------------------ ----------- -----------
Net cash provided by financing activities 1,428,998 642,215
------------------------------------------------------------------------------ ----------- -----------
Net change in cash (84,212) 163,066
Effect of exchange rate changes on cash held in foreign currencies (121,131) 15,371
Cash, beginning of period 1,518,332 20,259
Cash, end of period $ 1,312,989 $ 198,696
------------------------------------------------------------------------------ ----------- -----------
Supplemental information
Shares issued to settle due to related parties (note 11(b)(iii)) $ 935,852 $ -
------------------------------------------------------------------------------ ----------- -----------
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 payments Warrant translation
capital reserve reserve reserve Deficit Total
--------------------- ----------- ----------- -------- ----------- ------------ ----------
Balance, December 31,
2014 $ 31,825,575 $ 5,471,109 $ - $ 1,133,221 $ (33,382,788) $ 5,047,117
Shares issued in
private placement
(note 11(b)(i)) 607,062 - - - - 607,062
Warrants issued
(note 11(b)(i)) (32,000) - - - - (32,000)
Share issue costs (49,197) - - - - (49,197)
Stock-based
compensation (note
11(d)(i)(ii)) - 338,000 - - - 338,000
Net loss and other
comprehensive
income for the
period - - - 509,214 (1,122,856) (613,642)
--------------------- ----------- ----------- -------- ----------- ------------ ----------
Balance, June 30,
2015 $ 32,351,440 $ 5,809,109 $ - $ 1,642,435 $ (34,505,644) $ 5,297,340
--------------------- ----------- ----------- -------- ----------- ------------ ----------
Balance, December 31,
2015 $ 33,960,190 $ 5,809,109 $ 766,000 $ 1,903,837 $ (35,175,865) $ 7,263,271
Shares issued in
private placement
(note 11(b)(ii)) 1,466,312 - - - - 1,466,312
Share issue costs (30,777) - - - - (30,777)
Common shares issued
for debt (note
11(b)(iii)) 935,852 - - - - 935,852
Net loss and other
comprehensive loss
for the period - - - (1,172,724) (1,019,174) (2,191,898)
--------------------- ----------- ----------- -------- ----------- ------------ ----------
Balance, June 30,
2016 $ 36,331,577 $ 5,809,109 $ 766,000 $ 731,113 $ (36,195,039) $ 7,442,760
--------------------- ----------- ----------- -------- ----------- ------------ ----------
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 Six Months Ended June 30, 2016
(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 material
uncertainties related to events or conditions that may cast
significant 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 subsidiary Cavanacaw
Corporation ("Cavanacaw"). Cavanacaw has a 100% shareholding in
both Omagh Minerals Limited ("Omagh") and Flintridge Resources
Limited ("Flintridge") who are engaged in the acquisition,
exploration and development of gold properties, mainly in Omagh,
Northern Ireland. The Omagh mine has an open pit mine, which was in
production and is reported as property, plant and equipment and an
underground mine which is in the development stage and reported as
exploration and evaluation assets. The production at the open pit
mine was suspended in 2013.
The going concern assumption is dependent upon the ability of
the Company to obtain the following:
a. Securing sufficient financing to fund ongoing operational activity and the development of
the underground mine.
b. Obtaining consent for an underground mine which is currently subject to a judicial review
process scheduled for September 2016.
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 Company is currently in
discussions with a number of potential financiers.
As at June 30, 2016, the Company had a deficit of $36,195,039
(December 31, 2015 - $35,175,865). Management is confident that it
will be able to secure the required financing to enable the Company
to 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. Cavanacaw also has developed a premium jewellery
business founded on the gold produced under the name Galántas Irish
Gold Limited ("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.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
2. Incorporation and Nature of Operations (Continued)
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.
The Company's operations include the consolidated results of
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. The primary office is located at 36 Toronto Street, Suite
1000, Toronto, Ontario, Canada, M5C 2C5.
3. Significant Accounting Policies
Statement of compliance
The Company applies International Financial Reporting Standards
("IFRS") as issued by the International Accounting Standards Board
("IASB") and interpretations issued by the International Financial
Reporting Interpretations Committee. 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 IFRSs issued and
outstanding as of August 19, 2016 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, 2015, except for changes noted below. Any
subsequent changes to IFRS that are given effect in the Company's
annual consolidated financial statements for the year ending
December 31, 2016 could result in restatement of these unaudited
condensed interim consolidated financial statements.
Change in accounting policies
(i) IAS 1 - Presentation of Financial Statements was amended in
December 2014 in order to clarify, among other things, that
information should not be obscured by aggregating or by providing
immaterial information, that materiality consideration apply to all
parts of the financial statements and that even when a standard
requires a specific disclosure, materiality considerations do
apply. At January 1, 2016, the Company adopted this pronouncement
and there was no material impact on the Company's unaudited
condensed interim consolidated financial statements.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
3. Significant Accounting Policies (Continued)
Recent accounting pronouncements
(i) IFRS 9 - Financial Instruments ("IFRS 9") was issued by the
IASB in October 2010 and will replace IAS 39 -Financial
Instruments: Recognition and Measurement ("IAS 39"). IFRS 9 uses an
incurred loss approach to determine whether a financial asset is
measured at amortized cost or fair value, replacing the expected
loss approach in IAS 39. The approach in IFRS 9 is based on how an
entity manages its financial instruments in the context of its
business model and the contractual cash flow characteristics of the
financial assets. In July 2014, the IASB issued the final version
of IFRS 9. The final amendments made in the new version include
guidance for the classification and measurement of financial assets
and a third measurement category for financial assets, fair value
through other comprehensive income. The standard also contains a
new expected loss impairment model for debt instruments measured at
amortized cost or fair value through other comprehensive income,
lease receivables, contract assets and certain written loan
commitments and financial guarantee contracts. Most of the
requirements in IAS 39 for classification and measurement of
financial
liabilities were carried forward unchanged to IFRS 9. IFRS 9
will be effective for accounting periods beginning January 1, 2018.
The Company is currently assessing the impact of this
pronouncement.
(ii) In May 2014, the IASB issued IFRS 15 - Revenue from
Contracts with Customers ("IFRS 15") to replace IAS 18 -Revenue and
IAS 11 - Construction Contracts and the related interpretations on
revenue recognition. The new revenue standard introduces a single,
principles based, five-step model for the recognition of revenue
when control of a good or service is transferred to the customer.
The five steps are identify the contract(s) with the customer,
identify the performance obligations in the contract, determine
transaction price, allocate the transaction price and recognize
revenue when the performance obligation is satisfied. IFRS 15 also
requires enhanced disclosures about revenue to help investors
better understand the nature, amount, timing and uncertainty of
revenue and cash flows from contracts with customers and improves
the comparability of revenue from contracts with customers. IFRS 15
will be effective for annual periods beginning on or after January
1, 2018, with early adoption permitted.
(iii) IFRS 16 - Leases ("IFRS 16") was issued on January 13,
2016 to require lessees to recognize assets and liabilities for
most leases. For lessors, there is little change to the existing
accounting in IAS 17 - Leases.
The IASB issued its standard as part of a joint project with the
Financial Accounting Standards Board ("FASB"). The FASB has not yet
issued its new standard, but it is also expected to require lessees
to recognize most leases on their statement of financial
position.
The new standard will be effective for annual periods beginning
on or after 1 January 2019. Early application is permitted,
provided the new revenue standard, IFRS 15, has been applied, or is
applied at the same date as IFRS 16.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
4. Accounts Receivable and Prepaid Expenses
As at As at
June 30, December 31,
2016 2015
----------------------------------------------- -------- ------------
Sales tax receivable - Canada $ 7,210 $ 3,083
Valued added tax receivable - Northern Ireland 88,926 141,976
Accounts receivable 37,804 62,725
Prepaid expenses 46,639 41,875
----------------------------------------------- -------- ------------
$ 180,579 $ 249,659
----------------------------------------------- -------- ------------
Prepaid expenses includes advances for consumables and for
construction of the passing bays in the Omagh mine.
The following is an aged analysis of receivables:
As at As at
June 30, December 31,
2016 2015
-------------------------- -------- ------------
Less than 3 months $ 98,389 $ 165,666
3 to 12 months - 1,837
More than 12 months 35,551 40,281
-------------------------- -------- ------------
Total accounts receivable $ 133,940 $ 207,784
-------------------------- -------- ------------
5. Inventories
As at As at
June 30, December 31,
2016 2015
------------------------ -------- ------------
Concentrate inventories $ 11,196 $ 13,265
Finished goods 13,608 30,610
------------------------ -------- ------------
$ 24,804 $ 43,875
------------------------ -------- ------------
Refer to note 13 for inventory movement.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
6. Property, Plant and Equipment
Freehold Plant Mine
land and and Motor Office development
Cost buildings machinery vehicles equipment costs Total
----------- ---------- ---------- -------- --------- ----------- -----------
Balance,
December
31, 2014 $ 2,440,515 $ 5,159,328 $ 81,732 $ 111,292 $ 14,943,018 $ 22,735,885
Additions - 10,278 40,198 - 855,937 906,413
Foreign
exchange
adjustment 315,480 663,775 14,714 14,387 1,931,651 2,940,007
----------- ---------- ---------- -------- --------- ----------- -----------
Balance,
December
31, 2015 2,755,995 5,833,381 136,644 125,679 17,730,606 26,582,305
Additions - 7,222 34,069 - 320,489 361,780
Disposals - (35,435) - - - (35,435)
Foreign
exchange
adjustment (429,733) (905,218) (21,307) (19,597) (2,764,680) (4,140,535)
----------- ---------- ---------- -------- --------- ----------- -----------
Balance,
June 30,
2016 $ 2,326,262 $ 4,899,950 $ 149,406 $ 106,082 $ 15,286,415 $ 22,768,115
----------- ---------- ---------- -------- --------- ----------- -----------
Freehold Plant Mine
land and and Motor Office development
Accumulated
depreciation buildings machinery vehicles equipment costs Total
------------- ---------- ---------- -------- --------- ----------- -----------
Balance,
December 31,
2014 $ 1,969,052 $ 4,300,385 $ 75,803 $ 85,203 $ 9,217,987 $ 15,648,430
Depreciation 24,105 173,340 6,466 4,000 - 207,911
Foreign
exchange
adjustment 266,155 560,042 10,085 11,191 1,191,589 2,039,062
------------- ---------- ---------- -------- --------- ----------- -----------
Balance,
December 31,
2015 2,259,312 5,033,767 92,354 100,394 10,409,576 17,895,403
Depreciation 10,064 73,229 5,252 1,738 - 90,283
Disposals - - (6,366) - - (6,366)
Foreign
exchange
adjustment (353,254) (787,633) (14,905) (15,821) (1,623,133) (2,794,746)
------------- ---------- ---------- -------- --------- ----------- -----------
Balance, June
30, 2016 $ 1,916,122 $ 4,319,363 $ 76,335 $ 86,311 $ 8,786,443 $ 15,184,574
------------- ---------- ---------- -------- --------- ----------- -----------
Freehold Plant Mine
land and and Motor Office development
Carrying value buildings machinery vehicles equipment costs Total
-------------------- --------- --------- -------- --------- ----------- ----------
Balance, December
31, 2015 $ 496,683 $ 799,614 $ 44,290 $ 25,285 $ 7,321,030 $ 8,686,902
-------------------- --------- --------- -------- --------- ----------- ----------
Balance, June 30,
2016 $ 410,140 $ 580,587 $ 73,071 $ 19,771 $ 6,499,972 $ 7,583,541
-------------------- --------- --------- -------- --------- ----------- ----------
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
7. Exploration and Evaluation Assets
Exploration and evaluation assets are expenditures for the
underground mining operations in Omagh. The proposed underground
mine is dependent on the ability of the Company to obtain the
necessary planning permission. On June 11, 2015, the Company
announced that it had obtain planning consent for an underground
gold mine at the Omagh site. However, the planning permission is
subject to a judicial review which is scheduled for September 2016.
The consent includes operating and environmental conditions.
Exploration
and
evaluation
Cost assets
---------------------------- -----------
Balance, December 31, 2014 $ 2,070,772
Additions 40,636
Foreign exchange adjustment 259,920
---------------------------- -----------
Balance, December 31, 2015 2,371,328
Additions 22,045
Foreign exchange adjustment (360,388)
---------------------------- -----------
Balance, June 30, 2016 $ 2,032,985
---------------------------- -----------
Exploration
and
evaluation
Carrying value assets
--------------------------- -----------
Balance, December 31, 2015 $ 2,371,328
--------------------------- -----------
Balance, June 30, 2016 $ 2,032,985
--------------------------- -----------
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 June 30, 2016 based on a
risk-free discount rate of 1% (December 31, 2015 - 1%) and an
inflation rate of 1.50% (December 31, 2015 - 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 June 30, 2016,
the estimated fair value of the liability is $543,948 (December 31,
2015 - $637,988). Changes in the provision during the six months
ended June 30, 2016 are as follows:
As at As at
June 30, December 31,
2016 2015
----------------------------------------------- -------- ------------
Decommissioning liability, beginning of period $ 637,988 $ 553,544
Accretion 6,018 12,341
Foreign exchange (100,058) 72,103
----------------------------------------------- -------- ------------
Decommissioning liability, end of period $ 543,948 $ 637,988
----------------------------------------------- -------- ------------
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
8. Decommissioning Liability (Continued)
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, 2015 - GBP
300,000), of which GBP 300,000 was funded as of June 30, 2016 (GBP
300,000 was funded as of December 31, 2015) and reported as
long-term deposit of $516,750 (December 31, 2015 - $612,210).
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, amounts payable for financing activities and
professional fees activities.
As at As at
June 30, December 31,
2016 2015
--------------------------------------------- -------- ------------
Accounts payable $ 285,446 $ 756,682
Accrued liabilities 532,027 632,080
--------------------------------------------- -------- ------------
Total accounts payable and other liabilities $ 817,473 $ 1,388,762
--------------------------------------------- -------- ------------
The following is an aged analysis of the accounts payable and
other liabilities:
As at As at
June 30, December 31,
2016 2015
--------------------------------------------- -------- ------------
Less than 3 months $ 300,787 $ 680,077
3 to 12 months 102,797 220,071
12 to 24 months 56,036 67,029
More than 24 months 357,853 421,585
--------------------------------------------- -------- ------------
Total accounts payable and other liabilities $ 817,473 $ 1,388,762
--------------------------------------------- -------- ------------
10. Financing Facility
Amounts payable on the long-term debt are as follow:
As at As at
June 30, December 31,
Interest 2016 2015
----------------------------------------- -------- -------- ------------
Financing facility, beginning of period $ 38,069 $ -
Financing facility received (GBP 19,900) 6.79% - 40,610
Less current portion (7,450) (6,947)
Repayment of financing facility (6,537) (2,541)
Foreign exchange adjustment 2,046 -
----------------------------------------- -------- -------- ------------
Financing facility - long term portion $ 26,128 $ 31,122
----------------------------------------- -------- -------- ------------
In June 2015, the Company obtained financing in the amount of
GBP 19,900 for the purchase of a vehicle. The financing is for
three years at interest of 6.79% per annum with monthly principal
and interest payments of GBP 377 together with a final payment in
June 2018 of GBP 9,383. The financing was secured on the
vehicle.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
11. Share Capital and Reserves
a) Authorized share capital
At June 30, 2016, 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 June 30, 2016, the issued share capital amounted to
$36,331,577. The change in issued share capital for the periods
presented is as follows:
Number of
common
shares Amount
---------------------------------------- ----------- -----------
Balance, December 31, 2014 76,697,155 $ 31,825,575
Shares issued in private placement (i) 10,599,999 607,062
Warrants issued (i) - (32,000)
Share issue costs - (49,197)
----------------------------------------- ----------- -----------
Balance, June 30, 2015 87,297,154 $ 32,351,440
----------------------------------------- ----------- -----------
Balance, December 31, 2015 107,297,154 $ 33,960,190
Shares issued in private placement (ii) 18,619,841 1,466,312
Share issue costs - (30,777)
Common shares issued for debt (iii) 11,883,835 935,852
----------------------------------------- ----------- -----------
Balance, June 30, 2016 137,800,830 $ 36,331,577
----------------------------------------- ----------- -----------
(i) On February 16, 2015, the Company closed a private placement
of 10,599,999 common shares at GBP 0.03 ($0.05727) per common share
for gross proceeds of GBP 316,667 ($607,062). Commissions of
$36,424 were paid in connection with the placement and was included
in the share issue costs. The agent also received 636,000 broker
warrants. Each broker warrant can be exercised for one common share
at an exercise price of GBP 0.045 for a period of 3 years.
The fair value of the 636,000 broker warrants was estimated at
$32,000 using the Black-Scholes option pricing model with the
following assumptions: expected dividend yield - 0%, expected
volatility - 168.98%, risk-free interest rate -0.43% and an
expected average life of 3 years. As a result of the exercise price
of the broker warrants being denominated in a currency other than
the functional currency, the broker warrants are considered a
derivative financial liability.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
11. Share Capital and Reserves (Continued)
b) Common shares issued (continued)
(ii) On June 9, 2016, the Company closed a private placement of
18,619,841 common shares at $0.07875 per common share for gross
proceeds of $1,466,312. A four month hold period applies to the
shares which will expire on October 10, 2016.
The majority of the placement was taken up by Mr. Ross Beaty,
who acquired 12,825,397 common shares.
(iii) On June 10, 2016, the Company issued 11,883,835 common
shares as settlement of due to related parties of $935,852. Due to
related parties consisted of an amount owing to Roland Phelps
(President and Chief Executive Officer ("CEO").
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, 2014 10,330,000 $ 0.18
Issued (note 11(b)(i)) 636,000 0.08
---------------------------- ----------- --------
Balance, June 30, 2015 10,966,000 $ 0.18
---------------------------- ----------- --------
Balance, December 31, 2015 30,966,000 $ 0.17
Expired (10,330,000) 0.17
---------------------------- ----------- --------
Balance, June 30, 2016 20,636,000 $ 0.16
---------------------------- ----------- --------
The following table reflects the actual warrants issued and
outstanding as of June 30, 2016:
Fair value
Grant date June 30,
Number fair value Exercise 2016
Expiry date of warrants ($) price ($)
------------------ ----------- ---------- -------- ----------
July 24, 2016 20,000,000 766,000 0.16 766,000
February 16, 2018 636,000 32,000 0.045(1) 52,000
------------------- ----------- ---------- -------- ----------
20,636,000 798,000 818,000
------------------ ----------- ---------- -------- ----------
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
11. Share Capital and Reserves (Continued)
c) Warrant reserve (continued)
(1) Exercise price is in GBP. As a result of the exercise price
of the warrants being denominated in a currency other than the
functional currency, the warrants are considered a derivative
financial liability. The warrants are revalued at each period end
with any gain or loss in the fair value being record in the
unaudited condensed interim consolidated statements of loss as an
unrealized gain or loss on fair value of derivative financial
liability.
On June 30, 2016, the fair value of the warrants, denominated in
a currency other than the functional currency, was estimated using
the Black-Scholes option pricing model with the following
assumptions: expected dividend yield of 0%; expected volatility of
143%; risk free interest rate of 0.52%; and an expected life of
1.63 years. As a result, the fair value of the warrants was
calculated to be $52,000 and the Company recorded an unrealized
gain on fair value of derivative financial liability for the three
and six months ended June 30, 2016 of $1,000 and $80,000,
respectively (three and six months ended June 30, 2015 - unrealized
gain of $95,000 and $103,000, respectively).
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, 2014 940,000 $ 0.50
Granted (i)(ii) 3,700,000 0.11
---------------------------- --------- --------
Balance, June 30, 2015 4,640,000 $ 0.19
---------------------------- --------- --------
Balance, December 31, 2015 4,440,000 $ 0.17
Expired (50,000) 0.50
---------------------------- --------- --------
Balance, June 30, 2016 4,390,000 $ 0.17
---------------------------- --------- --------
(i) On June 1, 2015, 3,550,000 stock options were granted to
directors, officers, consultants and key employees of the Company
to purchase common shares at a price of $0.105 per share until June
1, 2020. The options vested immediately. The fair value attributed
to these options was $324,000 and was expensed in the unaudited
condensed interim consolidated statements of loss and credited to
equity settled share-based payments reserve. During the three and
six months ended June 30, 2016, included in stock-based
compensation is $nil (three and six months ended June 30, 2015 -
$324,000) related to the vested portion of these options.
The fair value of the options was estimated using the
Black-Scholes option pricing model with the following assumptions:
dividend yield - 0%; volatility - 134%; risk-free interest rate -
0.90% and an expected life of 5 years.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
11. Share Capital and Reserves (Continued)
d) Stock options (continued)
(ii) On June 13, 2015, 150,000 stock options were granted to a
consultant of the Company to purchase common shares at a price of
$0.105 per share until June 12, 2020. The options vested
immediately. The fair value attributed to these options was $14,000
and was expensed in the unaudited condensed interim consolidated
statements of loss and credited to equity settled share-based
payments reserve. During the three and six months ended June 30,
2016, included in stock-based compensation is $nil (three and six
months ended June 30, 2015 - $14,000) related to the vested portion
of these options.
The fair value of the options was estimated using the
Black-Scholes option pricing model with the following assumptions:
dividend yield - 0%; volatility - 133%; risk-free interest rate -
1.01% and an expected life of 5 years.
The following table reflects the actual stock options issued and
outstanding as of June 30, 2016:
Weighted average Number of
remaining Number of options Number of
Exercise contractual options vested options
Expiry date price ($) life (years) outstanding (exercisable) unvested
------------------ --------- ---------------- ----------- ------------- ---------
September 6, 2016 0.50 0.19 690,000 690,000 -
June 1, 2020 0.105 3.92 3,550,000 3,550,000 -
June 12, 2020 0.105 3.96 150,000 150,000 -
------------------- --------- ---------------- ----------- ------------- ---------
0.17 3.34 4,390,000 4,390,000 -
------------------ --------- ---------------- ----------- ------------- ---------
12. Net Loss per Common Share
The calculation of basic and diluted loss per share for the
three and six months ended June 30, 2016 was based on the loss
attributable to common shareholders of $645,829 and $1,019,174,
respectively (three and six months ended June 30, 2015 - $708,757
and $1,122,856, respectively) and the weighted average number of
common shares outstanding of 114,263,285 and 110,765,807,
respectively (three and six months ended June 30, 2015 - 87,297,154
and 84,533,844, respectively) for basic and diluted loss per share.
Diluted loss did not include the effect of 20,636,000 warrants
(three and six months ended June 30, 2015 - 10,966,000) and
4,390,000 options (three and six months ended June 30, 2015 -
4,640,000) for the three and six months ended June 30, 2016, as
they are anti-dilutive.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
13. Cost of Sales
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
---------------------- -------- -------- -------- --------
Production wages $ 36,950 $ 27,676 $ 97,430 $ 52,208
Oil and fuel 15,081 8,088 33,350 16,887
Repairs and servicing 10,952 9,493 26,350 24,660
Equipment hire - 3,061 - 5,174
Royalties - 10,897 - 20,133
Other costs 26,009 8,401 39,443 18,551
---------------------- -------- -------- -------- --------
Production costs 88,992 67,616 196,573 137,613
Inventory movement (420) 47,040 13,530 47,040
---------------------- -------- -------- -------- --------
Cost of sales $ 88,572 $ 114,656 $ 210,103 $ 184,653
---------------------- -------- -------- -------- --------
14. Related Party Disclosures
Related parties 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 fair value 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 Six Months Ended
June 30, June 30,
Note 2016 2015 2016 2015
-------------------------------- ----- --------- -------- -------- -------
Interest on related party loans (i) $ 17,137 $ 17,012 $ 35,250 $ 33,622
--------------------------------- ------ --------- -------- -------- -------
(i) G&F Phelps Limited ("G&F Phelps"), a company
controlled by a director of the Company, had amalgamated loans to
the Company of $2,270,866 (GBP 1,318,354) (December 31, 2015 -
$2,690,365 - GBP 1,318,354) included with due to related parties
bearing interest at 2% above UK base rates, repayable on demand and
secured by a mortgage debenture on all the Company's assets.
Interest accrued on related party loans is included with due to
related parties. As at June 30, 2016, the amount of interest
accrued is $302,009 (GBP 175,332) (December 31, 2015 - $320,053
-GBP 156,835).
(ii) See note 11(b)(ii)(iii).
(b) Remuneration of key management of the Company was as
follows:
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
------------------------- --------- -------- -------- --------
Salaries and benefits(1) $ 118,574 $ 121,420 $ 240,060 $ 237,708
Stock-based compensation - 109,521 - 109,521
------------------------- --------- -------- -------- --------
$ 118,574 $ 230,941 $ 240,060 $ 347,229
------------------------- --------- -------- -------- --------
(1) Salaries and benefits include director fees. As at June 30,
2016, due to directors for fees amounted to $97,000 (December 31,
2015 - $83,750) and due to key management, mainly for salaries and
benefits accrued amounted to $92,014 (GBP 53,419) (December 31,
2015 - $928,048 - GBP 454,769), and is included with due to related
parties.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2016
(Expressed in Canadian Dollars)
(Unaudited)
------------------------------------------------------------
14. Related Party Disclosures (Continued)
(c) As of June 30, 2016, Ross Beaty owns 28,825,397 common
shares of the Company or approximately 20.92% of the outstanding
common shares. Roland Phelps, CEO and director, owns, directly and
indirectly, 33,356,750 common shares of the Company or
approximately 24.21% of the outstanding common shares of the
Company. The remaining 54.87% 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 owner.
The Company is not aware of any arrangements that may at a
subsequent date result in a change in control of the Company.
15. 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:
June 30, 2016 United Kingdom Canada Total
------------------- -------------- ---------- ----------
Current assets $ 311,137 $ 1,207,235 $ 1,518,372
Non-current assets 10,072,796 60,480 10,133,276
------------------- -------------- ---------- ----------
Revenues $ 29,721 $ - $ 29,721
------------------- -------------- ---------- ----------
December 31, 2015 United Kingdom Canada Total
------------------- -------------- ---------- ----------
Current assets $ 447,691 $ 1,364,175 $ 1,811,866
Non-current assets 11,609,887 60,553 11,670,440
------------------- -------------- ---------- ----------
16. Contingency
During the year ended December 31, 2010, the Company's
subsidiary Omagh received a payment demand from Her Majesty's
Revenue and Customs in the amount of $524,140 (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. The Company
believes this claim is without merit. An appeal has been lodged and
the Company's subsidiary Omagh intends to vigorously defend itself
against this claim. A hearing date for the appeal has not yet been
determined. No provision has been made for the claim in the
unaudited condensed interim consolidated financial statements.
17. Event After the Reporting Period
On July 24, 2016, 20,000,000 warrants with an exercise price of
$0.16 expired unexercised.
Addendum : Drilling Data
Hole Easting Northing Starting Intersect Dip Estimated Intersect Au Ag Pb Core
number azimuth width at TRUE vertical g/t g/t % loss
(m) intersect width depth %
(m)* (m)*
--------------- --------- --------- ---------
OML-DD-15-155 239749.4 370912.9 270(o) 21.6 53(o) 13.0 117.2 9.9 30.3 0.6 1
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
And 0.6 53.5(o) 0.4 148.4 1.2 2.4 0 0
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
And 0.8 53.5(o) 0.5 175.2 1.5 2.7 0 0
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
OML-DD-15-154 239568.9 370650.9 80(o) 1.2 55(o) 0.7 42.4 35.8 85.8 4.9 1
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
53.4
And 0.6 (o) 0.4 142.1 0.5 0.8 0.1 0
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
73.9
OML-DD-15-153 239574.9 370815.2 95(o) 0.7 (o) 0.2 77.4 12.6 6.3 0 0
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
75.6
And 5.6 (o) 1.4 212 1.6 2.2 0.1 1
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
OML-DD-152 288 61.3
(JA) 239803.7 370916.8 (o) 1.01 (o) 0.5 328.5 1.5 0.3 0 3
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
OML-DD-156 75 56.5
(JA) 239577.3 370815.8 (o) 0.9 (o) 0.5 98.7 8.1 22.1 1.5 0
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
56.5
And 2.8 (o) 1.5 101.1 1.8 33.7 0.2 0
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
OML-DD-157 80 69.8
(KL) 239567.9 370650.9 (o) 0.8 (o) 0.3 88 3 4 0 26
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
OML-DD-158 270 45.1
(JA) 239858.3 371082 (o) 0.6 (o) 0.4 17.9 2.7 2.3 0.5 0
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
49
And 0.4 (o) 0.3 133.3 2.2 0.8 0 0
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
OML-DD-159 75 57.8
(KY) 240007.8 370930.3 (o) 1 (o) 0.5 63.9 5.7 6.2 0 7
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
OML-DD-160 260 54.4
(KL) 239634.8 370742.5 (o) 2 (o) 1.2 74.1 3.2 7.1 0 0
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
OML-DD-161 270 46.1
(JA) 239724.7 371047 (o) 0.6 (o) 0.4 60.3 6.1 6.8 1.2 3
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
46
And 1 (o) 0.7 68.2 2.1 5.8 0 0
--------------- --------- --------- --------- ---------- ---------- ---------- ---------- ----- ----- ---- -----
260 coring deviation : missed
OML-DD-162 239624.1 370818.8 (o) NA target
--------------- --------- --------- --------- ---------- -------------------------------------------------------------
265 coring deviation : missed
OML-DD-163 239735.1 370980 (o) NA target
--------------- --------- --------- --------- ---------- -------------------------------------------------------------
NOTE: All figures have been rounded to one decimal place.
Intersect depth is a maximum estimate to the top of the
intersect.
The samples were taken by geological staff under the supervision
of R. Phelps C.Eng MIMMM, (President & CEO, Galantas Gold
Corporation), the Qualified Person (QP) for the program under NI
43-101 and who is also a "Qualified Person" as defined in the Note
for Mining Oil & Gas Companies, June 2009, of the London Stock
Exchange. Sampling methodology, security and verification followed
standard procedures (April 2006) with standards, blanks and
duplicates added at a frequency of 1 for every 20. The samples were
analysed as follows: gold by fire assay and ICP-AES on 30g samples
(fire assay and gravimetric finish for samples >10 ppm Au);
other metals by ICP-MS and ICP-AES, at ALS Geochemistry
Laboratories of Galway, Ireland, and were considered compliant with
all requirements of International Standards ISO 17025:2005. All the
samples reported herein are from drill core.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SESFDDFMSESA
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