TIDMGAL
RNS Number : 8956Y
Galantas Gold Corporation
28 August 2018
GALANTAS GOLD CORPORATION
TSXV & AIM: Symbol GAL
GALANTAS REPORTS RESULTS FOR THE THREE AND SIX MONTHSED JUNE 30,
2018
August 28, 2018: Galantas Gold Corporation (the 'Company') is
pleased to announce its financial results for the Three and Six
Months ended June 30, 2018.
Financial Highlights
Highlights of the 2018 second quarter's and first six month's
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
2018 2017 2018 2017
Revenue $ 57,040 $ 16,607 $ 57,040 $ 19,341
Cost of Sales $ (34,150) $ (111,605) $ (58,216) $ (175,021)
Income (loss) before the undernoted $ 22,890 $ (94,998) $ (1,176) $ (155,680)
Depreciation $ (77,980) $ (50,887) $ (142,229) $ (90,942)
General administrative expenses $ (616,153) $ (497,235) $ (1,025,043) $ (999,351)
Unrealized gain on fair value of derivative financial
liability $ 0 $ 28,000 $ 10,000 $ 6,000
Foreign exchange gain / (loss) $ (29,267) $ 103,244 $ (66,560) $ 43,863)
Net Loss for the period $ ( 700,510) $ (511,876) $ (1,225,008) $ (1,196,110)
Working Capital Deficit $ (5,252,685) $ (2,328,303) $ (5,252,685) $(2,328,303)
Cash loss from operating activities before changes in
non-cash working capital $ (429,920) $ (404,783) $ (762,340) $ (799,382)
Cash at June 30, 2018 $ 732,603 $ 1,681,739 $ 732,603 $ 1,681,739
The Net Loss for the three months ended June 30, 2018 amounted
to CDN$ 700,510 (2017: CDN$ 511,876) and the cash loss from
operating activities before changes in non-cash working capital for
the second quarter of 2018 amounted to CDN$ 429,920 (2017 Q2: CDN$
404,783). The Net Loss for the six months ended June 30, 2018
amounted to CDN $ 1,225,008 (2017:CDN$ 1,196,110) and the cash loss
from operating activities before changes in non-cash working
capital for the first six months of 2018 amounted to CDN$ 762,340
(2017: CDN$ 799,382).
The Company had cash balances of $ 732,603 at June 30, 2018
compared to $ 1,681,739 at June 30, 2017. The working capital
deficit at June 30, 2018 amounted to $ 2,328,303 compared to a
working capital deficit of $ 2,328,303 at June 30, 2017.
There were no financing activities during the first half of
2018. Additional loan advances from G&F Phelps Ltd, a related
party, during the six months totaled $ 549,193 (UKGBP 316,410).
During the second quarter Galantas announced that its operating
subsidiary, Flintridge Resources Ltd. had signed a concentrate
pre-payment agreement and a loan facility agreement for US$ 1.6
million (CDN$ 2.012 million) with Ocean Partners UK Ltd., together
with an increased, on-demand loan facility of GBP600,000 with
G&F Phelps Ltd. (See press release dated April 12, 2018 for
further details).
Permitting
In November 2017, Galantas reported that it had received notice
of an application, by a third party, to the Court of Appeal, in
relation to a positive judicial review judgment regarding the grant
of planning permission. This was subsequently heard in February
2018. The Court will deliver its judgement at a later date,
currently unknown but indicated for September 2018.
Production/Mine Development
Production of flotation concentrate at the Omagh mine from
development ore restarted in the third quarter of 2018. The
granting of planning consent in 2015 for an underground operation
at the Omagh site, now subject to the result of a judicial review
appeal, permits the continuation and expansion of gold mining,
following the exhaustion of accessible resources available to the
previous open pit operation. The underground mine, which is in
active development, will utilize the same processing methods and
the processing plant has received a partial upgrade. The strategy
is to establish the underground mine and look for further expansion
of gold resources on the property, which has many undrilled
targets.
The phased development arrangement, in terms of mine access
dimensions, is expected to allow for rapid expansion of production
as additional capital becomes available.
Underground development of a decline tunnel, located at the base
of the existing open pit, commenced in the first quarter 2017.
After over-coming initial difficulties, tunneling continued through
2017 and to date in 2018. A detailed plan is being implemented to
accelerate progress in line with the planning consent. The main
decline tunnel descends at a slope of 1 in 7, from near the base of
the former Kearney open pit. A horizontal west to east access
tunnel driven from the decline tunnel intersected the north / south
Kearney vein during June at approximately a right angle and has
exposed the vein to be approximately 2.8 metres wide at that point.
The vein intersection is located some 15 metres below the base of
the Kearney open-pit. A horizontal development tunnel is planned to
be driven on vein, at this level, in both directions, beneath a
safety (Crown) pillar which will initially provide limited feed to
the mill in the third quarter. The decline tunnel is planned to be
extended in depth, along with construction of a second means of
egress. The decline is planned to provide access to lower levels
and permit stoping between the first two horizontal levels in late
2018 or early 2019. Stoping operations are expected to provide an
enhanced supply of mill feed. The underground development, using
drill and blast techniques, is being carried out by an in-house
crew which is fully trained in safety and operating procedures. An
in-house, mines rescue team has also been trained and equipped.
Whilst the present drilling and loading equipment, which was
purchased for training and early tunnel development purposes, is
performing above expectations it has lower productivity when
compared with current technology. New drilling equipment has been
acquired on a rental basis, with options to purchase, and is
expected to improve advance rates significantly. A substitute
tunneling drill rig has been available on rental to cover delays in
manufacture. The interim rig has led to a significant improvement
in advance rate. In addition a new 4t capacity load-haul-dump unit,
has been ordered on a rental purchase basis. This is expected to
improve productivity in loading operations from the smaller
cross-section vein drives. It is equipped with radio remote control
which enhances safety in stope mucking operations. Delivery is
expected in September 2018. Further equipment purchases are under
negotiation.
Environmental monitoring continues to demonstrate compliance
with the standards imposed by the regulatory authorities. Safety is
a high priority and the zero lost time accident rate, since the
start of underground operations, continues.
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/8956Y_1-2018-8-27.pdf
The Annual General and Special Meeting of the Company was held
at Thursday, June 28, 2018 at 11:00 a.m. (Toronto time) at the
registered office of the Company, DSA Corporate Services Inc. 82
Richmond Street East, Toronto, Ontario, M5C 1P1.
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 anticipated
production and development projections, 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,
2018 2017
------------------------------------------------------- ----------- ------------
ASSETS
Current assets
Cash $ 732,603 $ 779,758
Accounts receivable and prepaid expenses (note 4) 267,699 316,410
Inventories (note 5) 11,282 15,095
------------------------------------------------------- ----------- ------------
Total current assets 1,011,584 1,111,263
Non-current assets
Property, plant and equipment (note 6) 8,818,885 8,166,752
Long-term deposit (note 8) 520,710 508,830
Exploration and evaluation assets (note 7) 5,949,095 3,948,452
------------------------------------------------------- ----------- ------------
Total non-current assets 15,288,690 12,624,034
------------------------------------------------------- ----------- ------------
Total assets $ 16,300,274 $ 13,735,297
------------------------------------------------------- ----------- ------------
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities (note 9) $ 1,705,261 $ 1,216,332
Current portion of financing facilities (note 10) 285,667 6,182
Due to related parties (note 13) 4,273,341 3,381,357
------------------------------------------------------- ----------- ------------
Total current liabilities 6,264,269 4,603,871
Non-current liabilities
Non-current portion of financing facilities (note 10) 1,006,105 19,689
Decommissioning liability (note 8) 570,042 551,680
Derivative financial liability - 10,000
------------------------------------------------------- ----------- ------------
Total non-current liabilities 1,576,147 581,369
------------------------------------------------------- ----------- ------------
Total liabilities 7,840,416 5,185,240
------------------------------------------------------- ----------- ------------
Capital and reserves
Share capital (note 11(a)(b)) 39,759,172 39,759,172
Reserves 8,792,996 7,658,187
Deficit (40,092,310) (38,867,302)
------------------------------------------------------- ----------- ------------
Total equity 8,459,858 8,550,057
------------------------------------------------------- ----------- ------------
Total equity and liabilities $ 16,300,274 $ 13,735,297
------------------------------------------------------- ----------- ------------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
Going concern (note 1)
Contingency (note 15)
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
------------------------------------------ ----------- ----------- ----------- -----------
Revenues
Gold sales $ 57,040 $ 16,607 $ 57,040 $ 19,341
Cost and expenses of operations
Cost of sales 34,150 111,605 58,216 175,021
Depreciation (note 6) 77,980 50,887 142,229 90,942
------------------------------------------ ----------- ----------- ----------- -----------
112,130 162,492 200,445 265,963
------------------------------------------ ----------- ----------- ----------- -----------
Loss before general administrative and
other (incomes) expenses (55,090) (145,885) (143,405) (246,622)
------------------------------------------ ----------- ----------- ----------- -----------
General administrative expenses
Management and administration wages
(note 13) 216,565 158,014 373,417 304,742
Other operating expenses 57,081 98,247 104,177 121,261
Accounting and corporate 17,107 16,191 30,360 30,090
Legal and audit 17,452 47,451 64,203 80,737
Stock-based compensation (note
11(d)(i)(ii)) 69,772 80,506 145,855 301,087
Shareholder communication and
investor relations 66,312 61,991 105,630 100,172
Transfer agent 5,477 5,605 6,127 7,580
Director fees (note 13) 8,250 8,500 13,250 13,500
General office 2,041 1,949 4,422 3,910
Accretion expenses (notes 8 and 10) 77,618 2,717 80,397 5,307
Loan interest and bank charges (note 13) 78,478 16,064 97,205 30,965
------------------------------------------ ----------- ----------- ----------- -----------
616,153 497,235 1,025,043 999,351
Other (incomes) expenses
Unrealized gain on fair value of
derivative financial liability - (28,000) (10,000) (6,000)
Foreign exchange loss (gain) 29,267 (103,244) 66,560 (43,863)
------------------------------------------ ----------- ----------- ----------- -----------
29,267 (131,244) 56,560 (49,863)
------------------------------------------ ----------- ----------- ----------- -----------
Net loss for the period $ (700,510) $ (511,876) $ (1,225,008) $ (1,196,110)
------------------------------------------ ----------- ----------- ----------- -----------
Basic and diluted net loss per share (note
12) $ (0.00) $ (0.00) $ (0.01) $ (0.01)
------------------------------------------ ----------- ----------- ----------- -----------
Weighted average number of common shares
outstanding - basic and diluted 187,549,186 170,894,087 187,549,186 160,616,924
------------------------------------------ ----------- ----------- ----------- -----------
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,
2018 2017 2018 2017
-------------------------------------------- ----------- --------- ----------- -----------
Net loss for the period $ (700,510) $ (511,876) $ (1,225,008) $ (1,196,110)
Other comprehensive (loss) income
Items that will be reclassified subsequently
to profit or loss
Foreign currency translation differences (391,688) 56,765 202,954 113,470
-------------------------------------------- ----------- --------- ----------- -----------
Total comprehensive loss $ (1,092,198) $ (455,111) $ (1,022,054) $ (1,082,640)
-------------------------------------------- ----------- --------- ----------- -----------
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,
2018 2017
------------------------------------------------------------------- ----------- -----------
Operating activities
Net loss for the period $ (1,225,008) $ (1,196,110)
Adjustment for:
Depreciation (note 6) 142,229 90,942
Stock-based compensation (note 11(d)(i)(ii)) 145,855 301,087
Interest expense 93,063 28,968
Foreign exchange gain 11,034 (23,576)
Accretion expenses (notes 8 and 10) 80,397 5,307
Unrealized gain on fair value of derivative financial liability (10,000) (6,000)
Non-cash working capital items:
Accounts receivable and prepaid expenses 54,505 (38,856)
Inventories 4,070 9,110
Accounts payable and other liabilities 453,412 124,308
Due to related parties 173,908 174,284
------------------------------------------------------------------- ----------- -----------
Net cash used in operating activities (76,535) (530,536)
------------------------------------------------------------------- ----------- -----------
Investing activities
Purchase of property, plant and equipment (602,009) (371,546)
Exploration and evaluation assets (1,909,858) (305,963)
------------------------------------------------------------------- ----------- -----------
Net cash used in investing activities (2,511,867) (677,509)
------------------------------------------------------------------- ----------- -----------
Financing activities
Proceeds of private placement - 2,446,299
Share issue costs - (134,854)
Advances from related parties 549,193 -
Proceeds from financing facilities (note 10) 2,021,280 -
Financing charges related to financing liabilities (41,806) -
Repayment of financing facilities (note 10) (3,022) (1,842)
------------------------------------------------------------------- ----------- -----------
Net cash provided by financing activities 2,525,645 2,309,603
------------------------------------------------------------------- ----------- -----------
Net change in cash (62,757) 1,101,558
Effect of exchange rate changes on cash held in foreign currencies 15,602 23,176
Cash, beginning of period 779,758 557,005
Cash, end of period $ 732,603 $ 1,681,739
------------------------------------------------------------------- ----------- -----------
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,
2016 $ 36,331,577 $ - $ 6,575,109 $ 450,948 $(36,789,163) $ 6,568,471
Shares issued in
private placement
(note 11(b)(i)) 2,446,299 - - - - 2,446,299
Share issue costs (134,854) - - - - (134,854)
Stock-based
compensation (note
11(d)(i)) - - 301,087 - - 301,087
Net loss and other
comprehensive
income for the
period - - - 113,470 (1,196,110) (1,082,640)
--------------------- ----------- -------- ----------- ----------- ----------- ----------
Balance, June 30,
2017 $ 38,643,022 $ - $ 6,876,196 $ 564,418 $(37,985,273) $ 8,098,363
--------------------- ----------- -------- ----------- ----------- ----------- ----------
Balance, December 31,
2017 $ 39,759,172 $ - $ 7,038,978 $ 619,209 $(38,867,302) $ 8,550,057
Warrants issued
(note 10(ii)) - 786,000 - - - 786,000
Stock-based
compensation (note
11(d)(i)(ii)) - - 145,855 - - 145,855
Net loss and other
comprehensive
income for the
period - - - 202,954 (1,225,008) (1,022,054)
--------------------- ----------- -------- ----------- ----------- ----------- ----------
Balance, June 30,
2018 $ 39,759,172 $ 786,000 $ 7,184,833 $ 822,163 $(40,092,310) $ 8,459,858
--------------------- ----------- -------- ----------- ----------- ----------- ----------
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, 2018
(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.
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, 2018, the Company had a deficit of $40,092,310
(December 31, 2017 - $38,867,302). 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.
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 The Canadian Venture
Building, 82 Richmond Street East, Toronto, Ontario, Canada, M5C
1P1.
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 ("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 IFRSs issued and
outstanding as of August 22, 2018 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, 2017, except as 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,
2018 could result in restatement of these unaudited condensed
interim consolidated financial statements.
New accounting standard adopted
Effective January 1, 2018, the Company adopted IFRS 9 -
Financial Instruments ("IFRS 9"). In July 2014, the IASB issued the
final publication of the IFRS 9 standard, which supersedes lAS 39 -
Financial Instruments: Recognition and Measurement ("lAS 39"). IFRS
9 includes revised guidance on the classification and measurement
of financial instruments, new guidance for measuring impairment on
financial assets, and new hedge accounting guidance. The Company
has adopted IFRS 9 on a retrospective basis, however, this guidance
had no impact to the Company's unaudited condensed interim
consolidated financial statements.
Under IFRS 9, financial assets are classified and measured based
on the business model in which they are held and the
characteristics of their contractual cash flows. IFRS 9 contains
the primary measurement categories for financial assets: measured
at amortized cost, fair value through other comprehensive income
("FVTOCI") and fair value through profit and loss ("FVTPL").
The new hedge accounting guidance aligns hedge accounting more
closely with an entity's risk management objectives and strategies.
IFRS 9 does not fundamentally change the types of hedging
relationships or the requirement to measure and recognize
ineffectiveness; however, it allows more hedging strategies used
for risk management to qualify for hedge accounting and introduces
more judgement to assess the effectiveness of a hedging
relationship, primarily from a qualitative standpoint. The Company
has elected to continue with lAS 39 for hedging. This does not have
an effect on our reported results.
Below is a summary showing the classification and measurement
bases of our financial instruments as at January 1, 2018 as a
result of adopting IFRS 9 (along with comparison to lAS 39).
Classification IAS 39 IFRS 9
-------------------------------------- -------------------------------------------- --------------
Cash FVTPL FVTPL
Accounts receivable Loans and receivables (amortized cost) Amortized cost
Long-term deposit Loans and receivables (amortized cost) Amortized cost
Accounts payable and other liabilities Other financial liabilities (amortized cost) Amortized cost
Financing facilities Other financial liabilities (amortized cost) Amortized cost
Due to related parties Other financial liabilities (amortized cost) Amortized cost
-------------------------------------- -------------------------------------------- --------------
As a result of the adoption of IFRS 9, the accounting policy for
financial instruments as disclosed in the Company's December 31,
2017 consolidated financial statements has been updated as
follows:
Financial assets
Financial assets are classified as either financial assets at
FVTPL, amortized cost, or FVTOCI. The Company determines the
classification of its financial assets at initial recognition.
i. Financial assets recorded at FVTPL
Financial assets are classified as FVTPL if they do not meet the
criteria of amortized cost or FVTOCI. Gains or losses on these
items are recognized in profit or loss.
The Company's cash is classified as financial assets measured at
FVTPL.
ii. Amortized cost
Financial assets are classified as measured at amortized cost if
both of the following criteria are met and the financial assets are
not designated as at FVTPL: 1) the object of the Company's business
model for these financial assets is to collect their contractual
cash flows; and 2) the asset's contractual cash flows represent
"solely payments of principal and interest".
The Company's accounts receivable and long-term deposit are
classified as financial assets measured at amortized cost.
Financial liabilities
Financial liabilities are classified as either financial
liabilities at FVTPL or at amortized cost. The Company determines
the classification of its financial liabilities at initial
recognition.
i. Amortized cost
Financial liabilities are classified as measured at amortized
cost unless they fall into one of the following categories:
financial liabilities at FVTPL, financial liabilities that arise
when a transfer of a financial asset does not qualify for
derecognition, financial guarantee contracts, commitments to
provide a loan at a below-market interest rate, or contingent
consideration recognized by an acquirer in a business
combination.
The Company's accounts payable and other liabilities, financing
facilities and due to related parties do not fall into any of the
exemptions and are therefore classified as measured at amortized
cost.
ii. Financial liabilities recorded FVTPL
Financial liabilities are classified as FVTPL if they fall into
one of the five exemptions detailed above.
Transaction costs
Transaction costs associated with financial instruments, carried
at FVTPL, are expensed as incurred, while transaction costs
associated with all other financial instruments are included in the
initial carrying amount of the asset or the liability.
Subsequent measurement
Instruments classified as FVTPL are measured at fair value with
unrealized gains and losses recognized in profit or loss.
Instruments classified as amortized cost are measured at amortized
cost using the effective interest rate method. Instruments
classified as FVTOCI are measured at fair value with unrealized
gains and losses recognized in other comprehensive income.
Derecognition
The Company derecognizes financial liabilities only when its
obligations under the financial liabilities are discharged,
cancelled, or expired. The difference between the carrying amount
of the financial liability derecognized and the consideration paid
and payable, including any non-cash assets transferred or
liabilities assumed, is recognized in profit or loss.
Expected credit loss impairment model
IFRS 9 introduced a single expected credit loss impairment
model, which is based on changes in credit quality since initial
application. The adoption of the expected credit loss impairment
model had no impact on the Company's unaudited condensed interim
consolidated financial statements.
The Company assumes that the credit risk on a financial asset
has increased significantly if it is more than 30 days past due.
The Company considers a financial asset to be in default when the
borrower is unlikely to pay its credit obligations to the Company
in full or when the financial asset is more than 90 days past
due.
The carrying amount of a financial asset is written off (either
partially or in full) to the extent that there is no realistic
prospect of recovery. This is generally the case when the Company
determines that the debtor does not have assets or sources of
income that could generate sufficient cash flows to repay the
amounts subject to the write-off.
New accounting standards not yet effective
(i) On June 7, 2017, the IASB issued IFRIC 23 - Uncertainty Over
Income Tax Treatments. The interpretation provides guidance on the
accounting for current and deferred tax liabilities and assets in
circumstances in which there is uncertainty over income tax
treatments. The interpretation is applicable for annual periods
beginning on or after January 1, 2019. Earlier application is
permitted. The Company intends to adopt the Interpretation in its
consolidated financial statements for the annual period beginning
on January 1, 2019. The Company does not expect the interpretation
to have a material impact on the consolidated financial
statements.
(ii) On January 13, 2016, the IASB issued IFRS 16 - Leases
("IFRS 16"). The new standard is effective for annual periods
beginning on or after January 1, 2019. IFRS 16 will replace IAS 17
- Leases ("IAS 17"). This standard introduces a single lessee
accounting model and requires a lessee to recognize assets and
liabilities for all leases with a term of more than 12 months,
unless the underlying asset is of low value. A lessee is required
to recognize a right-of-use asset representing its right to use the
underlying asset and a lease liability representing its obligation
to make lease payments. IFRS 16 substantially carries forward the
lessor accounting requirements of IAS 17, while requiring enhanced
disclosures to be provided by lessors. Other areas of the lease
accounting model have been impacted, including the definition of a
lease. Transitional provisions have been provided. The Company
intends to adopt IFRS 16 in its consolidated financial statements
for the period beginning on January 1, 2019. The Company is
evaluating the impact of adoption and expects to report more
detailed information in its consolidated financial statements as
the effective date approaches.
4. Accounts Receivable and Prepaid Expenses
As at As at
June 30, December 31,
2018 2017
----------------------------------------------- -------- ------------
Sales tax receivable - Canada $ 6,539 $ 3,600
Valued added tax receivable - Northern Ireland 204,611 274,963
Accounts receivable 3,211 3,180
Prepaid expenses 53,338 34,667
----------------------------------------------- -------- ------------
$ 267,699 $ 316,410
----------------------------------------------- -------- ------------
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,
2018 2017
-------------------------- -------- ------------
Less than 3 months $ 211,863 $ 279,302
More than 12 months 2,498 2,441
-------------------------- -------- ------------
Total accounts receivable $ 214,361 $ 281,743
-------------------------- -------- ------------
5. Inventories
As at As at
June 30, December 31,
2018 2017
------------------------ -------- ------------
Concentrate inventories $ 11,282 $ 11,025
Finished goods - 4,070
------------------------ -------- ------------
$ 11,282 $ 15,095
------------------------ -------- ------------
6. Property, Plant and Equipment
Freehold Plant Mine
land and and Motor Office development
Cost buildings machinery vehicles equipment costs Total
----------------- ---------- ---------- -------- --------- ----------- -----------
Balance, December
31, 2016 $ 2,283,400 $ 4,851,419 $ 109,598 $ 102,011 $ 14,783,628 $ 22,130,056
Additions 2,092 510,561 29,139 - 202,765 744,557
Foreign exchange
adjustment 54,729 115,606 2,627 2,445 354,329 529,736
----------------- ---------- ---------- -------- --------- ----------- -----------
Balance, December
31, 2017 2,340,221 5,477,586 141,364 104,456 15,340,722 23,404,349
Additions - 434,295 9,460 18,478 139,776 602,009
Foreign exchange
adjustment 54,639 127,100 3,301 2,439 358,170 545,649
----------------- ---------- ---------- -------- --------- ----------- -----------
Balance, June 30,
2018 $ 2,394,860 $ 6,038,981 $ 154,125 $ 125,373 $ 15,838,668 $ 24,552,007
----------------- ---------- ---------- -------- --------- ----------- -----------
Freehold Plant Mine
land and and Motor Office development
Accumulated
depreciation buildings machinery vehicles equipment costs Total
----------------- ---------- ---------- -------- --------- ----------- -----------
Balance, December
31, 2016 $ 1,850,486 $ 4,217,673 $ 78,242 $ 84,397 $ 8,449,267 $ 14,680,065
Depreciation 13,684 176,311 10,915 2,521 - 203,431
Foreign exchange
adjustment 44,550 102,951 2,032 2,059 202,509 354,101
----------------- ---------- ---------- -------- --------- ----------- -----------
Balance, December
31, 2017 1,908,720 4,496,935 91,189 88,977 8,651,776 15,237,597
Depreciation 6,161 127,069 6,896 2,103 - 142,229
Foreign exchange
adjustment 44,486 102,719 2,041 2,051 201,999 353,296
----------------- ---------- ---------- -------- --------- ----------- -----------
Balance, June 30,
2018 $ 1,959,367 $ 4,726,723 $ 100,126 $ 93,131 $ 8,853,775 $ 15,733,122
----------------- ---------- ---------- -------- --------- ----------- -----------
Freehold Plant Mine
land and and Motor Office development
Carrying value buildings machinery vehicles equipment costs Total
------------------- --------- ---------- -------- --------- ----------- ----------
Balance, December
31, 2017 $ 431,501 $ 980,651 $ 50,175 $ 15,479 $ 6,688,946 $ 8,166,752
------------------- --------- ---------- -------- --------- ----------- ----------
Balance, June 30,
2018 $ 435,493 $ 1,312,258 $ 53,999 $ 32,242 $ 6,984,893 $ 8,818,885
------------------- --------- ---------- -------- --------- ----------- ----------
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 (the "Consent") for
an underground gold mine at the Omagh site. In February 2017, the
planning permission was subject to a Judicial Review. The Consent
includes operating and environmental conditions. On March 13, 2017,
the Company announced that underground development had commenced on
the Omagh mine. On April 24, 2017, the Company announced that the
underground development has been put on hold and on May 15, 2017,
the Company announced that the underground development would
continue. On September 29, 2017, the Company announced that it
received the judgement for the Judicial Review. The third party's
request for a quashing of the Consent was denied. Underground
development is underway and the Company has a detailed plan to
accelerate progress, in line with the confirmed Consent.
On January 18, 2018, the Company announced that a date has been
set up by the Court of Appeal for a hearing into a third party
appeal against a positive Judicial Review of the Company's Consent.
The hearing is anticipated for February 6, 2018. On February 6,
2018, the Company announced a date change for the third party
appeal against a positive Judicial Review of its Consent. Due to
the illness of the third party, who is a litigant in person, the
date of the hearing of the appeal has been postponed until February
15, 2018. The hearing may continue on February 16, 2018, if the
Court so determines. On February 16, 2018, the Company announced
that it was advised that an appeal brought by a third party against
its planning consent has completed the hearing stage. The Court of
Appeal at the Royal Courts of Justice in Belfast, Northern Ireland
heard the appeal against a judicial review decision that upheld the
Department for Environment Northern Ireland (now Department of
Infrastructure) grant of planning consent for an underground mine
on the former open-pit gold-mine site. The Court will deliver its
judgement at a later date, currently unknown.
Exploration
and
evaluation
Cost assets
---------------------------- -----------
Balance, December 31, 2016 $ 2,294,254
Additions 1,600,652
Foreign exchange adjustment 53,546
---------------------------- -----------
Balance, December 31, 2017 3,948,452
Additions 1,909,858
Foreign exchange adjustment 90,785
---------------------------- -----------
Balance, June 30, 2018 $ 5,949,095
---------------------------- -----------
Exploration
and
evaluation
Carrying value assets
--------------------------- -----------
Balance, December 31, 2017 $ 3,948,452
--------------------------- -----------
Balance, June 30, 2018 $ 5,949,095
--------------------------- -----------
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, 2018 based on a
risk-free discount rate of 1% (December 31, 2017 - 1%) and an
inflation rate of 1.50% (December 31, 2017 - 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, 2018,
the estimated fair value of the liability is $570,042 (December 31,
2017 - $551,680). Changes in the provision during the six months
ended June 30, 2018 are as follows:
As at As at
June 30, December 31,
2018 2017
----------------------------------------------- -------- ------------
Decommissioning liability, beginning of period $ 551,680 $ 528,305
Accretion 5,552 10,560
Foreign exchange 12,810 12,815
----------------------------------------------- -------- ------------
Decommissioning liability, end of period $ 570,042 $ 551,680
----------------------------------------------- -------- ------------
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, 2017 - GBP
300,000), of which GBP 300,000 was funded as of June 30, 2018 (GBP
300,000 was funded as of December 31, 2017) and reported as
long-term deposit of $520,710 (December 31, 2017 - $508,830).
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
June 30, December 31,
2018 2017
--------------------------------------------- ---------- ------------
Accounts payable $ 1,140,034 $ 641,608
Accrued liabilities 565,227 574,724
--------------------------------------------- ---------- ------------
Total accounts payable and other liabilities $ 1,705,261 $ 1,216,332
--------------------------------------------- ---------- ------------
The following is an aged analysis of the accounts payable and
other liabilities:
As at As at
June 30, December 31,
2018 2017
--------------------------------------------- ---------- ------------
Less than 3 months $ 990,241 $ 568,981
3 to 12 months 359,180 288,435
12 to 24 months 19,559 49,877
More than 24 months 336,281 309,039
--------------------------------------------- ---------- ------------
Total accounts payable and other liabilities $ 1,705,261 $ 1,216,332
--------------------------------------------- ---------- ------------
10. Financing Facilities
Amounts payable on the long-term debts are as follow:
As at As at
June 30, December 31,
2018 2017
-------------------------------------------------- ---------- ------------
Financing facilities, beginning of period (i) $ 19,689 $ 25,265
Financing facilities received (US$1,600,000) (ii) 2,021,280 -
Less bonus warrants issued (ii) (786,000) -
Less financing costs (ii) (41,806) -
Less current portion (285,667) (6,182)
Repayment of financing facilities (3,022) (4,350)
Accretion 74,845 -
Foreign exchange adjustment 6,786 4,956
-------------------------------------------------- ---------- ------------
Financing facilities - long term portion $ 1,006,105 $ 19,689
-------------------------------------------------- ---------- ------------
(i) 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
August 2019 of GBP 9,540. The financing was secured on the
vehicle.
(ii) In April 2018, the Company signed a concentrate pre-payment
agreement and loan facility for US$1.6 million with a United
Kingdom based company (the "Lender"), with a maturity date of
December 31, 2020. The interest is set at USD 12 month LIBOR +
8.75% . No interest shall be charged for 6 months and repayments
shall commence against deliveries in 2019. There was a US$25,000
arrangement fee.
In respect of the loan facility, a fixed and floating security,
subordinated to an existing security to G&F Phelps Ltd.
("G&F Phelps"), is being put in place over Flintridge assets.
G&F Phelps has a first charge on Flintridge assets in respect
of its loan facility and the Lender required an intercreditor
agreement between G&F Phelps and the Lender.
As consideration for the loan facility, the United Kingdom based
company received 15,000,000 bonus warrants of Galantas. Each bonus
warrant is exercisable into one common share of Galantas and is
subject to an initial four months plus one day hold period from the
date of issuance of the bonus warrants. The bonus warrants have a
maximum life of two years (the "Expiry Time"). On April 19, 2018,
the 15,000,000 bonus warrants were granted. In the event that the
weighted average closing price per common share of the Company is
more than $0.20 per share for more than five consecutive trading
days, the Company shall be entitled to accelerate the Expiry Time
to a date that is 30 days from the date on which the Company
announces the accelerated Expiry Time by press release.
The fair value of the 15,000,000 bonus warrants was estimated at
$786,000 using the Black-Scholes option pricing model with the
following assumptions: expected dividend yield - 0%, expected
volatility - 113.55%, risk-free interest rate - 1.91% and an
expected average life of 2 years.
During the three and six months ended June 30, 2018, the Company
recorded accretion expense of $74,845 in the unaudited condensed
interim consolidated statements of loss.
11. Share Capital and Reserves
a) Authorized share capital
At June 30, 2018, 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, 2018, the issued share capital amounted to
$39,759,172. The change in issued share capital for the periods
presented is as follows:
Number of
common
shares Amount
--------------------------------------------- ----------- -----------
Balance, December 31, 2016 137,800,830 $ 36,331,577
Shares issued in private placement (i) 33,093,257 2,446,299
Share issue costs - (134,854)
---------------------------------------------- ----------- -----------
Balance, June 30, 2017 170,894,087 $ 38,643,022
---------------------------------------------- ----------- -----------
Balance, December 31, 2017 and June 30, 2018 187,549,186 $ 39,759,172
---------------------------------------------- ----------- -----------
(i) On February 27, 2017, the Company completed the first part
of a private placement. It consisted of 27,371,035 common shares of
no par value. United Kingdom placees have subscribed at a price of
GBP 0.045 per common share. Canadian placees have subscribed at a
price of $0.0725 per common share. Receipts attached to the first
part of the placement total $2,021,501.
On March 2, 2017, the Company completed the second part of a
private placement. It consisted of 5,722,222 common shares of no
par value for receipt of $424,798. United Kingdom placees have
subscribed at a price of GBP 0.045 per common share.
Melquart Ltd, ("Melquart") a UK based investment institution,
subscribed for a total of 22,222,222 common shares and Melquart's
staked increased to 13% of the Company's issued common shares.
Ross Beaty subscribed for 3,326,170 common shares and after
closing of the private placement Ross Beaty owns 32,151,567 common
shares of the Company or approximately 18.8% of the outstanding
common shares.
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, 2016 and June 30, 2017 636,000 $ 0.07
---------------------------------------------- ---------- --------
Balance, December 31, 2017 636,000 $ 0.07
Issued (note 10(ii)) 15,000,000 0.16
Expired (636,000) 0.07
---------------------------------------------- ---------- --------
Balance, June 30, 2018 15,000,000 $ 0.16
---------------------------------------------- ---------- --------
The following table reflects the actual warrants issued and
outstanding as of June 30, 2018:
Grant date
Number fair value Exercise
Expiry date of warrants ($) price
--------------- ----------- ---------- --------
April 19, 2020 15,000,000 786,000 0.1575
---------------- ----------- ---------- --------
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, 2016 3,700,000 $ 0.11
Granted (i) 4,900,000 0.14
---------------------------- --------- --------
Balance, June 30, 2017 8,600,000 $ 0.12
---------------------------- --------- --------
Balance, December 31, 2017 8,600,000 $ 0.12
Granted (ii) 1,000,000 0.11
Expired (750,000) 0.14
---------------------------- --------- --------
Balance, June 30, 2018 8,850,000 $ 0.12
---------------------------- --------- --------
(i) On March 25, 2017, 4,900,000 stock options were granted to
directors, officers, consultants and key employees of the Company
to purchase common shares at a price of $0.135 per share until
March 25, 2022. The options will vest as to one third on March 25,
2017 and one third on each of the following two anniversaries. The
fair value attributed to these options was $645,820 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, 2018,
included in stock-based compensation is $26,835 and $102,918,
respectively (three and six months ended June 30, 2017 - $80,506
and $301,087, respectively) 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 - 201%; risk-free interest rate -
1.12% and an expected life of 5 years.
(ii) On April 19, 2018, 1,000,000 stock options were granted to
key employees and consultants of the Company to purchase common
shares at a price of $0.11 per share until April 19, 2023. The
options will vest as to one third on April 19, 2018 and one third
on each of the following two anniversaries. The fair value
attributed to these options was $99,400 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, 2018, included in stock-based
compensation is $42,937 (three and six months ended June 30, 2017 -
$nil) related to the vested portion of these options.
The fair value of the options was estimated using the
Black-Scholes option pricing model with the following assumptions:
dividend yield - 0%; volatility - 172%; risk-free interest rate -
2.16% and an expected life of 5 years.
The following table reflects the actual stock options issued and
outstanding as of June 30, 2018:
Weighted average Number of
remaining Number of options Number of
Exercise contractual options vested options
Expiry date price ($) life (years) outstanding (exercisable) unvested
--------------- --------- ---------------- ----------- ------------- ---------
June 1, 2020 0.105 1.92 3,550,000 3,550,000 -
June 12, 2020 0.105 1.96 150,000 150,000 -
March 25, 2022 0.135 3.74 4,150,000 2,766,667 1,383,333
April 19, 2023 0.110 4.81 1,000,000 333,333 666,667
---------------- --------- ---------------- ----------- ------------- ---------
0.120 3.10 8,850,000 6,800,000 2,050,000
--------------- --------- ---------------- ----------- ------------- ---------
12. Net Loss per Common Share
The calculation of basic and diluted loss per share for the
three and six months ended June 30, 2018 was based on the loss
attributable to common shareholders of $700,510 and $1,225,008,
respectively (three and six months ended June 30, 2017 - $511,876
and $1,196,110, respectively) and the weighted average number of
common shares outstanding of 187,549,186 and 187,549,186,
respectively (three and six months ended June 30, 2017 -
170,894,087 and 160,616,924, respectively) for basic and diluted
loss per share. Diluted loss did not include the effect of
15,000,000 warrants (three and six months ended June 30, 2017 -
636,000) and 8,850,000 options (three and six months ended June 30,
2017 - 8,600,000) for the three and six months ended June 30, 2018,
as they are anti-dilutive.
13. 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 2018 2017 2018 2017
-------------------------------- ----- --------- -------- -------- -------
Interest on related party loans (i) $ 76,934 $ 14,691 $ 94,269 $ 28,284
--------------------------------- ------ --------- -------- -------- -------
(i) G&F Phelps, a company controlled by a director of the
Company, had amalgamated loans to the Company of $2,837,460 (GBP
1,634,764) (December 31, 2017 - $2,236,060 - 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. In April 2018, the interest
increased to 6.75% + USD 12 month LIBOR. Interest accrued on
related party loans is included with due to related parties. As at
June 30, 2018, the amount of interest accrued is $485,802 (GBP
279,888) (December 31, 2017 - $383,778 - GBP 226,271).
(ii) See note 11(b)(i).
(b) Remuneration of key management of the Company was as
follows:
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
-------------------------- --------- -------- -------- --------
Salaries and benefits (1) $ 115,996 $ 114,051 $ 228,106 $ 219,316
Stock-based compensation 6,572 19,716 25,205 73,736
-------------------------- --------- -------- -------- --------
$ 122,568 $ 133,767 $ 253,311 $ 293,052
-------------------------- --------- -------- -------- --------
(1) Salaries and benefits include director fees. As at June 30,
2018, due to directors for fees amounted to $150,000 (December 31,
2017 - $136,750) and due to key management, mainly for salaries and
benefits accrued amounted to $800,079 (GBP 460,955) (December 31,
2017 - $624,769 - GBP 368,356), and is included with due to related
parties.
(c) As of June 30, 2018, Ross Beaty owns 35,066,526 common
shares of the Company or approximately 18.70% of the outstanding
common shares. Roland Phelps, Chief Executive Officer and director,
owns, directly and indirectly, 34,576,262 common shares of the
Company or approximately 18.44% of the outstanding common shares of
the Company. Melquart owns, directly and indirectly, 28,319,783
common shares of the Company or approximately 15.10% of the
outstanding common shares of the Company. The remaining 47.76% 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.
14. 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, 2018 United Kingdom Canada Total
------------------- -------------- -------- ----------
Current assets $ 909,154 $ 102,430 $ 1,011,584
Non-current assets 15,223,799 64,891 15,288,690
------------------- -------------- -------- ----------
December 31, 2017 United Kingdom Canada Total
------------------- -------------- -------- ----------
Current assets $ 410,064 $ 701,199 $ 1,111,263
Non-current assets 12,558,310 65,724 12,624,034
------------------- -------------- -------- ----------
15. 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 $528,156 (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. 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. The hearing started at the beginning of March
2017 but a further two days hearing was scheduled in January 2018.
The January 2018 hearing was adjourned to the week commencing
August 13, 2018 when it was completed. The Appeals Tribunal
Judgement will deliver its judgement at a later date, currently
unknown. No provision has been made for the claim in the unaudited
condensed interim consolidated financial statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR PGUAURUPRGWM
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