TIDMGAL

RNS Number : 1056K

Galantas Gold Corporation

31 August 2021

GALANTAS GOLD CORPORATION

TSXV & AIM: Symbol GAL

GALANTAS REPORTS FINANCIAL RESULTS FOR THE QUARTERED JUNE 30, 2021

August 31, 2021: Galantas Gold Corporation (the 'Company') is pleased to announce its unaudited financial results for the Quarter ended June 30, 2021.

Financial Highlights

Highlights of the second quarter 2021 results, which are expressed in Canadian Dollars, are summarized below:

 
All figures denominated in Canadian Dollars (CDN$) 
                                                                   Quarter Ended                 Six Months Ended 
                                                                      June 30                         June 30 
 
                                                                     2021 2020                       2021 2020 
Revenue                                                       $ 0            $ 0              $ 0           $ 0 
Cost and expenses of operations                           $ (61,333)     $ (31,239)       $ (107,481)       $ (67,075) 
Loss before the undernoted                                $ (61,333)     $ (31,239)       $ (107,481)       $ (67,075) 
Depreciation                                              $ (87,088)     $ (84,391)       $ (159,153)    $ (173,118) 
General administrative expenses                          $ (2,719,055)   $ (650,727)     $ (3,224,152)  $ (1,307,495) 
Foreign exchange (loss) / gain                            $ (21,092)       $ (25,784)     $ (37,745)       $ 75,232 
Net Loss for the period                                  $ (2,888,568)   $ (792,141)     $ (3,528,531)  $ (1,472,456) 
Working Capital Surplus / (Deficit)                       $ 4,505,905   $ (7,700,406)     $ 4,505,905    $(7,700,406) 
Cash profit / (loss) from operating activities before 
 changes in non-cash working capital                       $ 144,806     $ (294,582)       $ 144,806     $ (294,582) 
Cash at June 30, 2021                                     $ 6,142,477     $ 199,953       $ 6,142,477     $ 199,953 
 

Sales revenue for the quarter ended June 30, 2021 amounted to $ Nil compared to revenue of $ Nil for the quarter ended June 30, 2020. Shipments of concentrate commenced during the third quarter of 2019. Concentrate sales provisional revenues totalled US$ 218,000 for the second quarter of 2021 compared to US $ Nil for the second quarter of 2020. Until the mine commences commercial production, the net proceeds from concentrate sales are being offset against development assets.

The Net Loss for the quarter ended June 30, 2021 amounted to $ 2,888,568 (2020: $792,141) and the cash inflow from operating activities before changes in non-cash working capital for the quarter ended June 30, 2021 amounted to $144,806 (2020: ($294,582)). The difference in the net loss is mainly due to stock based compensation and warrant issue costs from financing activities.

The Company had a cash balance of $6,142,477 at June 30, 2021 compared to $ 199,953 at June 30, 2020. The working capital surplus at June 30, 2021 amounted to $ 4,505,905 compared to a working capital deficit of $7,700,406 at June 30, 2020.

Exploration

The Company during the month of July initiated an initial 4,000 metre Phase 1 drill program targeting the Joshua vein from surface and targeting the Kearney vein from underground drilling.

Mine Development

Safety is a high priority and the company continued to invest in safety-related training and infrastructure. The zero lost time accident rate since the start of underground operations continues. Environmental monitoring demonstrates a high level of regulatory compliance. With the new management and operations team in place, detailed review of mine plans and production profile are ongoing.

"The Company has made great strides in advancing the Omagh project with the commencement of drilling to increase the confidence of resources for mine planning while also looking to expand known resources. Operationally the Company has secured critical new mining equipment to support mining activities while strengthening site management and operations team as we commence a phased restart of operations", commented Mario Stifano, CEO.

The detailed results and Management Discussion and Analysis (MD&A) are available on www.sedar.com and www.galantas.com and the highlights in this release should be read in conjunction with the detailed results and MD&A. The MD&A provides an analysis of comparisons with previous periods, trends affecting the business and risk factors.

Click on, or paste the following link into your web browser, to view the associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/1056K_1-2021-8-30.pdf

Qualified Person

The financial components of this disclosure has been reviewed by Alan Buckley (Chief Financial Officer) and the production and permitting components by Brendan Morris (COO), qualified persons under the meaning of NI. 43-101. The information is based upon local production and financial data prepared under their supervision.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including revenues and cost estimates, for the Omagh Gold project. Forward-looking statements are based on estimates and assumptions made by Galantas in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Galantas believes are appropriate in the circumstances. Many factors could cause Galantas' actual results, the performance or achievements to differ materially from those expressed or implied by the forward looking statements or strategy, including: gold price volatility; discrepancies between actual and estimated production, actual and estimated metallurgical recoveries and throughputs; mining operational risk, geological uncertainties; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign involvement; speculative nature of gold exploration; dilution; competition; loss of or availability of key employees; additional funding requirements; uncertainties regarding planning and other permitting issues; and defective title to mineral claims or property. These factors and others that could affect Galantas's forward-looking statements are discussed in greater detail in the section entitled "Risk Factors" in Galantas' Management Discussion & Analysis of the financial statements of Galantas and elsewhere in documents filed from time to time with the Canadian provincial securities regulators and other regulatory authorities. These factors should be considered carefully, and persons reviewing this press release should not place undue reliance on forward-looking statements. Galantas has no intention and undertakes no obligation to update or revise any forward-looking statements in this press release, except as required by law.

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.

Information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Enquiries

Galantas Gold Corporation

Mario Stifano - CEO

Email: info@galantas.com

Website: www.galantas.com

Telephone: 001 416 453 8433

Grant Thornton UK LLP (Nomad)

Philip Secrett, Harrison Clarke, George Grainger:

Telephone: +44(0)20 7383 5100

Panmure Gordon & Co (AIM Broker & Corporate Adviser)

Nick Lovering, Hugh Rich:

Telephone: +44(0)20 7659 1234

GALANTAS GOLD CORPORATION

Condensed Interim Consolidated Financial Statements

(Expressed in Canadian Dollars)

(Unaudited)

Three and Six Months Ended June 30, 2021

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, 
                                                               2021            2020 
---------------------------------------------------------   -----------    ------------ 
ASSETS 
 
Current assets 
 Cash and cash equivalents                                 $  6,142,477   $     612,094 
 Accounts receivable and prepaid expenses (note 4)              751,128         594,960 
 Inventories (note 5)                                           143,858          81,169 
---------------------------------------------------------   -----------    ------------ 
Total current assets                                          7,037,463       1,288,223 
 
Non-current assets 
 Property, plant and equipment (note 6)                      21,886,598      21,158,103 
 Long-term deposit (note 8)                                     513,780         521,430 
 Exploration and evaluation assets (note 7)                     827,182         750,741 
---------------------------------------------------------   -----------    ------------ 
Total non-current assets                                     23,227,560      22,430,274 
---------------------------------------------------------   -----------    ------------ 
Total assets                                               $ 30,265,023   $  23,718,497 
---------------------------------------------------------   -----------    ------------ 
 
EQUITY AND LIABILITIES 
 
Current liabilities 
 Accounts payable and other liabilities (notes 9 and 16)   $  2,390,715   $   1,350,142 
 Current portion of financing facilities (note 10)                    -       2,186,272 
 Due to related parties (note 14)                               100,842       5,461,893 
---------------------------------------------------------   -----------    ------------ 
Total current liabilities                                     2,491,557       8,998,307 
 
Non-current liabilities 
 Non-current portion of financing facilities (note 10)        4,601,474               - 
 Due to related parties (note 14)                             2,577,137               - 
 Decommissioning liability (note 8)                             594,906         598,275 
---------------------------------------------------------   -----------    ------------ 
Total non-current liabilities                                 7,773,517         598,275 
---------------------------------------------------------   -----------    ------------ 
Total liabilities                                            10,265,074       9,596,582 
---------------------------------------------------------   -----------    ------------ 
 
Equity 
 Share capital (note 11(a)(b))                               57,559,598      52,933,594 
 Reserves                                                    14,514,682       9,734,121 
 Deficit                                                    (52,074,331)    (48,545,800) 
---------------------------------------------------------   -----------    ------------ 
Total equity                                                 19,999,949      14,121,915 
---------------------------------------------------------   -----------    ------------ 
Total equity and liabilities                               $ 30,265,023   $  23,718,497 
---------------------------------------------------------   -----------    ------------ 
 

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Going concern (note 1)

Incorporation and nature of operations (note 2)

Contingency (note 16)

Events after the reporting period (note 17)

Galantas Gold Corporation

Condensed Interim Consolidated Statements of Loss

(Expressed in Canadian Dollars)

(Unaudited)

 
                                                       Three Months              Six Months Ended 
                                                         June 30,                    June 30, 
                                                    2021          2020          2021          2020 
----------------------------------------------   ----------    ----------    ----------    ---------- 
Revenues 
Sales of concentrate (note 13)                  $         -   $         -   $         -   $         - 
Cost and expenses of operations 
 Cost of sales                                       61,333        31,239       107,481        67,075 
 Depreciation (note 6)                               87,088        84,391       159,153       173,118 
----------------------------------------------   ----------    ----------    ----------    ---------- 
                                                    148,421       115,630       266,634       240,193 
----------------------------------------------   ----------    ----------    ----------    ---------- 
 
Loss before general administrative and other 
 expenses                                          (148,421)     (115,630)     (266,634)     (240,193) 
----------------------------------------------   ----------    ----------    ----------    ---------- 
 
General administrative expenses 
 Management and administration wages (note 14)       81,951       143,114       226,034       284,336 
 Other operating expenses                            39,835        57,360        72,415       151,420 
 Accounting and corporate                            73,273        15,109        88,457        29,253 
 Legal and audit                                     31,464        28,834        80,637        70,952 
 Stock-based compensation (note 11(d))            1,230,510        12,064     1,235,141        (4,224) 
 Shareholder communication and investor 
  relations                                         116,888        45,882       176,741        92,958 
 Transfer agent                                       9,046        26,738        11,907        54,474 
 Director fees (note 14)                             15,500         8,500        24,000        14,750 
 General office                                       7,770         2,776        11,339         5,489 
 Accretion expenses (notes 8 and 10)                 27,856       164,797       132,416       310,918 
 Loan interest and bank charges less deposit 
  interest (notes 10 and 14)                         80,780       145,553       160,883       297,169 
 Financing costs (note 10)                        1,004,182             -     1,004,182             - 
----------------------------------------------   ----------    ----------    ----------    ---------- 
                                                  2,719,055       650,727     3,224,152     1,307,495 
Other expenses 
 Foreign exchange loss (gain)                        21,092        25,784        37,745       (75,232) 
----------------------------------------------   ----------    ----------    ----------    ---------- 
                                                     21,092        25,784        37,745       (75,232) 
----------------------------------------------   ----------    ----------    ----------    ---------- 
 
Net loss for the period                         $(2,888,568)  $  (792,141)  $(3,528,531)  $(1,472,456) 
----------------------------------------------   ----------    ----------    ----------    ---------- 
Basic and diluted net loss per share (note 12)  $     (0.05)  $     (0.02)  $     (0.07)  $     (0.05) 
----------------------------------------------   ----------    ----------    ----------    ---------- 
   Weighted average number of common shares 
    outstanding - basic and diluted              60,494,975    32,321,472    53,501,436    32,321,472 
----------------------------------------------   ----------    ----------    ----------    ---------- 
 

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Galantas Gold Corporation

Condensed Interim Consolidated Statements of Comprehensive Loss

(Expressed in Canadian Dollars)

(Unaudited)

 
                                                       Three Months              Six Months Ended 
                                                         June 30,                    June 30, 
                                                    2021          2020          2021          2020 
----------------------------------------------   ----------    ----------    ----------    ---------- 
 
Net loss for the period                         $(2,888,568)  $  (792,141)  $(3,528,531)  $(1,472,456) 
 
Other comprehensive loss 
Items that will be reclassified subsequently 
to profit or loss 
 Exchange differences on translating foreign 
  operations                                       (198,369)     (670,131)     (295,294)     (287,422) 
----------------------------------------------   ----------    ----------    ----------    ---------- 
Total comprehensive loss                        $(3,086,937)  $(1,462,272)  $(3,823,825)  $(1,759,878) 
----------------------------------------------   ----------    ----------    ----------    ---------- 
 

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, 
                                                                               2021          2020 
-------------------------------------------------------------------------   ----------    ---------- 
Operating activities 
Net loss for the period                                                    $(3,528,531)  $(1,472,456) 
Adjustment for: 
 Depreciation (note 6)                                                         159,153       173,118 
 Stock-based compensation (note 11(d))                                       1,235,141        (4,224) 
 Accrued interest (notes 10 and 14)                                            158,239       295,889 
 Foreign exchange loss                                                         344,243        53,274 
 Accretion expenses (notes 8 and 10)                                           132,416       310,918 
 Financing costs (note 10)                                                   1,004,182             - 
Non-cash working capital items: 
 Accounts receivable and prepaid expenses                                     (168,600)       26,588 
 Inventories                                                                   (64,831)     (427,718) 
 Accounts payable and other liabilities                                        124,053      (422,474) 
 Due to related parties                                                        (67,781)      168,784 
-------------------------------------------------------------------------   ----------    ---------- 
Net cash and cash equivalents used in operating activities                    (672,316)   (1,298,301) 
-------------------------------------------------------------------------   ----------    ---------- 
 
Investing activities 
Purchase of property, plant and equipment                                   (1,194,831)     (345,669) 
Exploration and evaluation assets                                              (87,456)      (57,119) 
-------------------------------------------------------------------------   ----------    ---------- 
Net cash and cash equivalents used in investing activities                  (1,282,287)     (402,788) 
-------------------------------------------------------------------------   ----------    ---------- 
 
Financing activities 
Proceeds of private placements (note 11(b)(i))                               7,998,980             - 
Share issue costs                                                             (783,262)            - 
Proceeds from exercise of warrants                                             330,000             - 
Repayment of financing facilities (note 10)                                    (23,802)       (8,353) 
-------------------------------------------------------------------------   ----------    ---------- 
Net cash and cash equivalents provided by (used in) financing activities     7,521,916        (8,353) 
-------------------------------------------------------------------------   ----------    ---------- 
 
Net change in cash and cash equivalents                                      5,567,313    (1,709,442) 
 
Effect of exchange rate changes on cash held in foreign currencies             (36,930)       (4,025) 
 
Cash and cash equivalents, beginning of period                                 612,094     1,913,420 
-------------------------------------------------------------------------   ----------    ---------- 
 
Cash and cash equivalents, end of period                                   $ 6,142,477   $   199,953 
-------------------------------------------------------------------------   ----------    ---------- 
 
Cash                                                                       $ 6,142,477   $   199,953 
Cash equivalents                                                                     -             - 
-------------------------------------------------------------------------   ----------    ---------- 
Cash and cash equivalents                                                  $ 6,142,477   $   199,953 
-------------------------------------------------------------------------   ----------    ---------- 
 

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        Equity 
                                                                              component 
                                               share-based     currency          of 
                      Share       Warrants      payments      translation    convertible 
                     capital       reserve       reserve        reserve       debenture      Deficit        Total 
-----------------   ----------    ---------    -----------    -----------    -----------   -----------    ---------- 
Balance, December 
 31, 2019          $50,123,910   $  786,000   $  7,585,580   $    796,754   $    248,078  $(45,317,348)  $14,222,974 
 Expiry of 
  warrants                   -     (786,000)       786,000              -              -             -             - 
 Stock-based 
  compensation 
  (note 11(d))               -            -         (4,224)             -              -             -        (4,224) 
 Exchange 
  differences on 
  translating 
  foreign 
  operations                 -            -              -       (287,422)             -             -      (287,422) 
 Net loss for the 
  period                     -            -              -              -              -    (1,472,456)   (1,472,456) 
-----------------   ----------    ---------    -----------    -----------    -----------   -----------    ---------- 
Balance, June 30, 
 2020              $50,123,910   $        -   $  8,367,356   $    509,332   $    248,078  $(46,789,804)  $12,458,872 
-----------------   ----------    ---------    -----------    -----------    -----------   -----------    ---------- 
 
Balance, December 
 31, 2020          $52,933,594   $  340,000   $  8,381,382   $  1,012,739   $          -  $(48,545,800)  $14,121,915 
 Shares issued in 
  private 
  placement (note 
  11(b)(i))          7,998,980            -              -              -              -             -     7,998,980 
 Warrants issued 
  (note 11(b)(i))   (3,258,578)   3,258,578              -              -              -             -             - 
 Warrants issued 
  (note 10(ii))              -      670,000              -              -              -             -       670,000 
 Share issue 
  costs (note 
  11(b)(i))           (792,045)       8,783              -              -              -             -      (783,262) 
 Warrant 
  extension (note 
  10(i))                     -      251,000              -              -              -             -       251,000 
 Stock-based 
  compensation 
  (note 11(d))               -            -      1,235,141              -              -             -     1,235,141 
 Exercise of 
  warrants             677,647     (347,647)             -              -              -             -       330,000 
 Exchange 
  differences on 
  translating 
  foreign 
  operations                 -            -              -       (295,294)             -             -      (295,294) 
 Net loss for the 
  period                     -            -              -              -              -    (3,528,531)   (3,528,531) 
-----------------   ----------    ---------    -----------    -----------    -----------   -----------    ---------- 
Balance, June 30, 
 2021              $57,559,598   $4,180,714   $  9,616,523   $    717,445   $          -  $(52,074,331)  $19,999,949 
-----------------   ----------    ---------    -----------    -----------    -----------   -----------    ---------- 
 

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, 2021 
 (Expressed in Canadian Dollars) 
 (Unaudited) 
------------------------------------------------------------- 
 

1. Going Concern

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which contemplates that Galantas Gold Corporation (the "Company") will be able to realize assets and discharge liabilities in the normal course of business. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of uncertainties related to events or conditions that may cast doubt on the Company's ability to continue as a going concern. The Company's future viability depends on the consolidated results of the Company's wholly-owned subsidiary Cavanacaw Corporation ("Cavanacaw"). Cavanacaw has a 100% shareholding in both Flintridge Resources Limited ("Flintridge") who are engaged in the acquisition, exploration and development of gold properties, mainly in Omagh, Northern Ireland and Omagh Minerals Limited ("Omagh") who are engaged in the exploration of gold properties, mainly in the Republic of Ireland. The Omagh mine has an open pit mine, which was in production until 2013 when production was suspended and is reported as property, plant and equipment and as an underground mine which having established technical feasibility and commercial viability in December 2018 has resulted in associated exploration and evaluation assets being reclassified as an intangible development asset and reported as property, plant and equipment.

The going concern assumption is dependent upon forecast cash flows being met, further financing currently being negotiated. The directors assumptions in relation to future levels of production, gold prices and mine operating and capital costs are crucial to forecast cash flows being achieved. Should production be significantly delayed, revenues fall short of expectations or operating costs and capital costs increase significantly, there may be insufficient cash flows to sustain day to day operations without seeking further finance.

Negotiations with current finance providers to extend short-term loans have progressed positively and the maturity dates for both the G&F Phelps Ltd. ("G&F Phelps") and Ocean Partners loans have now been extended to December 31, 2023. The Company also raised gross proceeds of $8M through the issuance of shares to new and current investors to meet the financial requirements of the Company for the foreseeable future. Based on the financial projections prepared, the directors believe it's appropriate to prepare the unaudited condensed interim consolidated financial statements on the going concern basis.

As at June 30, 2021, the Company had a deficit of $52,074,331 (December 31, 2020 - $48,545,800). Comprehensive loss for the six months ended June 30, 2021 was $3,823,825 (six months ended June 30, 2020 - $1,759,878). These conditions raise material uncertainties which may cast significant doubt as to whether the Company will be able to continue as a going concern. However, management is confident that it will continue as a going concern. However, this is subject to a number of factors including market conditions.

These unaudited condensed interim consolidated financial statements do not reflect adjustments to the carrying values of assets and liabilities, the reported expenses and financial position classifications used that would be necessary if the going concern assumption was not appropriate. These adjustments could be material.

2. Incorporation and Nature of Operations

The Company was formed on September 20, 1996 under the name Montemor Resources Inc. on the amalgamation of 1169479 Ontario Inc. and Consolidated Deer Creek Resources Limited. The name was changed to European Gold Resources Inc. by articles of amendment dated July 25, 1997. On May 5, 2004, the Company changed its name from European Gold Resources Inc. to Galantas Gold Corporation. The Company was incorporated to explore for and develop mineral resource properties, principally in Europe. In 1997, it purchased all of the shares of Omagh which owns a mineral property in Northern Ireland, including a delineated gold deposit. Omagh obtained full planning and environmental consents necessary to bring its property into production.

The Company entered into an agreement on April 17, 2000, approved by shareholders on June 26, 2000, whereby Cavanacaw, a private Ontario corporation, acquired Omagh. Cavanacaw has established an open pit mine to extract the Company's gold deposit near Omagh, Northern Ireland. Cavanacaw also has developed a premium jewellery business founded on the gold produced under the name Galántas 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.

On April 17, 2020, the Company completed a share consolidation of its share capital on the basis of ten existing common shares for one new common share consolidation.

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.

In March 2020, the World Health Organization declared coronavirus (COVID-19) a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business or ability to raise funds.

3. Basis of Preparation

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 IFRS issued and outstanding as of August 27, 2021 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, 2020. Any subsequent changes to IFRS that are given effect in the Company's annual consolidated financial statements for the year ending December 31, 2021 could result in restatement of these unaudited condensed interim consolidated financial statements.

4. Accounts Receivable and Prepaid Expenses

 
                                                   As at        As at 
                                                  June 30,   December 31, 
                                                    2021         2020 
-----------------------------------------------   --------   ------------ 
 
Sales tax receivable - Canada                    $  11,877  $       3,987 
Valued added tax receivable - Northern Ireland     160,635         56,422 
Accounts receivable                                524,448        295,510 
Prepaid expenses                                    54,168        239,041 
-----------------------------------------------   --------   ------------ 
                                                 $ 751,128  $     594,960 
-----------------------------------------------   --------   ------------ 
 

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, 
                               2021         2020 
--------------------------   --------   ------------ 
 
Less than 3 months          $ 443,683  $     120,085 
3 to 12 months                244,628        117,615 
More than 12 months             8,649        118,219 
--------------------------   --------   ------------ 
Total accounts receivable   $ 696,960  $     355,919 
--------------------------   --------   ------------ 
 

5. Inventories

 
                            As at        As at 
                           June 30,   December 31, 
                             2021         2020 
------------------------   --------   ------------ 
 
Concentrate inventories   $ 143,858  $      81,169 
------------------------   --------   ------------ 
 

6. Property, Plant and Equipment

 
                 Freehold       Plant 
                 land and        and        Motor       Office      Development 
Cost             buildings    machinery    vehicles    equipment    assets (i)       Total 
--------------   ---------    ---------    --------    ---------    -----------    ---------- 
Balance, 
 December 31, 
 2019           $2,369,610   $6,866,075   $ 160,637   $  189,142   $ 19,016,904   $28,602,368 
Additions                -        2,781           -            -      1,892,995     1,895,776 
Cash receipts 
 from 
 concentrate 
 sales                   -            -           -            -     (1,792,209)   (1,792,209) 
Foreign 
 exchange 
 adjustment         28,561       82,352       1,934        2,280        227,986       343,113 
--------------   ---------    ---------    --------    ---------    -----------    ---------- 
Balance, 
 December 31, 
 2020            2,398,171    6,951,208     162,571      191,422     19,345,676    29,049,048 
Additions                -      391,309           -            -        803,523     1,194,831 
Foreign 
 exchange 
 adjustment        (35,184)    (101,486)     (2,385)      (2,808)      (282,338)     (424,200) 
--------------   ---------    ---------    --------    ---------    -----------    ---------- 
Balance, June 
 30, 2021       $2,362,987   $7,241,031   $ 160,186   $  188,614   $ 19,866,861   $29,819,679 
--------------   ---------    ---------    --------    ---------    -----------    ---------- 
 
 
                   Freehold       Plant 
                   land and        and        Motor       Office      Development 
Accumulated 
depreciation       buildings    machinery    vehicles    equipment    assets (i)      Total 
----------------   ---------    ---------    --------    ---------    -----------   --------- 
Balance, 
 December 31, 
 2019             $1,954,907   $5,259,569   $ 115,325   $  112,851   $          -  $7,442,652 
Depreciation           7,910      322,574      13,252       11,460              -     355,196 
Foreign exchange 
 adjustment           23,644       66,443       1,530        1,480              -      93,097 
----------------   ---------    ---------    --------    ---------    -----------   --------- 
Balance, 
 December 31, 
 2020              1,986,461    5,648,586     130,107      125,791              -   7,890,945 
Depreciation           3,106      146,390       4,846        4,811              -     159,153 
Foreign exchange 
 adjustment          (29,177)     (83,982)     (1,961)      (1,897)             -    (117,017) 
----------------   ---------    ---------    --------    ---------    -----------   --------- 
Balance, June 
 30, 2021         $1,960,390   $5,710,994   $ 132,992   $  128,705   $          -  $7,933,081 
----------------   ---------    ---------    --------    ---------    -----------   --------- 
 
 
                       Freehold      Plant 
                       land and       and       Motor      Office     Development 
Carrying value         buildings   machinery   vehicles   equipment   assets (i)      Total 
--------------------   ---------   ---------   --------   ---------   -----------   ---------- 
Balance, December 
 31, 2020             $  411,710  $1,302,622  $  32,464  $   65,631  $ 19,345,676  $21,158,103 
--------------------   ---------   ---------   --------   ---------   -----------   ---------- 
Balance, June 30, 
 2021                 $  402,597  $1,530,037  $  27,194  $   59,909  $ 19,866,861  $21,886,598 
--------------------   ---------   ---------   --------   ---------   -----------   ---------- 
 

(i) Development assets are expenditures for the underground mining operations in Omagh.

7. Exploration and Evaluation Assets

 
                               Exploration 
                                   and 
                               evaluation 
Cost                             assets 
----------------------------   ----------- 
 
Balance, December 31, 2019    $    661,726 
Additions                          129,031 
Impairment                         (47,490) 
Foreign exchange adjustment          7,474 
----------------------------   ----------- 
Balance, December 31, 2020         750,741 
Additions                           87,456 
Foreign exchange adjustment        (11,015) 
----------------------------   ----------- 
Balance, June 30, 2021        $    827,182 
----------------------------   ----------- 
 
Carrying value 
----------------------------   ----------- 
 
Balance, December 31, 2020    $    750,741 
----------------------------   ----------- 
Balance, June 30, 2021        $    827,182 
----------------------------   ----------- 
 

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, 2021 based on a risk-free discount rate of 1% (December 31, 2020 - 1%) and an inflation rate of 1.50% (December 31, 2020 - 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, 2021, the estimated fair value of the liability is $594,906 (December 31, 2020 - $598,275). Changes in the provision during the six months ended June 30, 2021 are as follows:

 
                                                   As at         As at 
                                                  June 30,    December 31, 
                                                    2021          2020 
-----------------------------------------------   --------    ------------ 
 
Decommissioning liability, beginning of period   $ 598,275   $     580,303 
Accretion                                            5,467          10,863 
Foreign exchange                                    (8,836)          7,109 
-----------------------------------------------   --------    ------------ 
Decommissioning liability, end of period         $ 594,906   $     598,275 
-----------------------------------------------   --------    ------------ 
 

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, 2020 - GBP 300,000), of which GBP 300,000 was funded as of June 30, 2021 (GBP 300,000 was funded as of December 31, 2020) and reported as long-term deposit of $513,780 (December 31, 2020 - $521,430).

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, 
                                                  2021          2020 
---------------------------------------------   ---------   ------------ 
 
Accounts payable                               $1,044,199  $     423,630 
Accrued liabilities                             1,346,516        926,512 
---------------------------------------------   ---------   ------------ 
Total accounts payable and other liabilities   $2,390,715  $   1,350,142 
---------------------------------------------   ---------   ------------ 
 

The following is an aged analysis of the accounts payable and other liabilities:

 
                                                  As at        As at 
                                                June 30,    December 31, 
                                                  2021          2020 
---------------------------------------------   ---------   ------------ 
 
Less than 3 months                             $1,606,891  $     432,946 
3 to 12 months                                    106,806         76,800 
12 to 24 months                                     5,515        161,327 
More than 24 months                               671,504        679,069 
---------------------------------------------   ---------   ------------ 
Total accounts payable and other liabilities   $2,390,716  $   1,350,142 
---------------------------------------------   ---------   ------------ 
 

10. Financing Facilities

Amounts payable on the Company's financial facilities are as follow:

 
                                                                     As at          As at 
                                                                    June 30,     December 31, 
                                                                      2021           2020 
----------------------------------------------------------------   ----------    ------------ 
 
Financing facilities, beginning of period (i)                     $ 2,186,272   $   1,440,185 
Financing facility received (i)                                             -         262,460 
Financing facility reallocated from due to related parties (ii)     4,578,039               - 
Financing facility reallocated to due to related parties (i)       (2,577,137)              - 
Less bonus warrants issued (i)                                              -        (340,000) 
Less current portion                                                        -      (2,186,272) 
Repayment of financing facilities (i)                                 (23,802)        (49,705) 
Accretion (i)                                                         126,949         360,452 
Interest (i)                                                           86,820         214,377 
Foreign exchange adjustment                                           224,333         298,503 
----------------------------------------------------------------   ----------    ------------ 
Financing facilities - long term portion                          $ 4,601,474   $           - 
----------------------------------------------------------------   ----------    ------------ 
 

(i) In April 2018, the Company signed a concentrate pre-payment agreement and loan facility for US$1.6 million with a United Kingdom based company (the "Lender"), with a maturity date of December 31, 2020. The interest was set at US$ 12 month LIBOR + 8.75% and payable monthly. No interest shall be charged for 6 months and repayments commenced 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, 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 1,500,000 bonus warrants of the Company. Each bonus warrant is exercisable into one common share of the Company 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 1,500,000 bonus warrants were granted. In the event that the weighted average closing price per common share of the Company is more than $2.00 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 1,500,000 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.

On July 9, 2020, the Company amended the terms of its loan facility of an increase in the outstanding loan facility. The amount of the loan facility increased by US$200,000 to a total of US$1.8 million. On November 12, 2020, the additional US$200,000 loan facility was drawn down by the Company. The interest rate applicable on the loan facility increased from US$ 12 month LIBOR + 8.75% to US$ 12 month LIBOR + 9.9% and the maturity date was extended from December 31, 2020 to December 31, 2021. Interest could be rolled into the loan facility until December 31, 2021, at the Company's option.

As consideration for amending the terms of the loan facility, the Lender received on August 14, 2020, 1,700,000 bonus warrants of Galantas ("Bonus Warrants"). Each Bonus Warrant will be exercisable for one common share of Galantas (a "Bonus Share") at an exercise price of $0.33 per Bonus Share. The Bonus Warrants will expire on December 31, 2021 (the "Expiry Date") and the Bonus Shares will be subject to an initial four month plus one day hold period from the date of their issuance. In the event that the weighted average closing price per common share of the Company is more than $0.4125 per share for more than five consecutive trading days, the Company shall be entitled to accelerate the Expiry Date to a date that is 30 days from the date on which the Company announces the accelerated Expiry Date by press release.

The fair value of the 1,700,000 bonus warrants was estimated at $340,000 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 165.75%, risk-free interest rate - 0.27% and an expected average life of 1.38 years.

The maturity date of the loan facility due on December 31, 2021 has been extended to December 31, 2023. Interest may be deferred and added to the balance outstanding until March 31, 2022, at which point interest will be paid monthly. The 1,700,000 Bonus Warrants issued have been extended.

(i) (continued) The Company recorded the incremental difference of $251,000 as financing costs based on the fair value of these warrants immediately prior to and after the modification. The fair value of the 1,700,000 Bonus Warrants was valued immediately prior to the subsequent extension using the following Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 123.98% to 144.48%, risk-free interest rate - 0.32% and an expected average life of 0.63 to 2.63 years.

This amendment to the loan facility is considered to be a modification of debt, accordingly, the fair value variances originated by the amendment of $83,182 was immediately recorded under financing costs in the unaudited condensed interim consolidated statements of a loss.

During the three and six months ended June 30, 2021, the Company recorded accretion expense of $25,145 and $126,949, respectively in the unaudited condensed interim consolidated statements of loss in regards with this loan facility (year ended December 31, 2020 - $360,452).

During the three and six months ended June 30, 2021, the Company recorded interest expense of $39,660 and $86,820, respectively in the unaudited condensed interim consolidated statements of loss in regards with this loan facility (year ended December 31, 2020 - $214,377).

During the three and six months ended June 30, 2021, the Company recorded a repayment of $nil and $23,802, respectively in regards with this loan facility (year ended December 31, 2020 - $49,705).

As at June 30, 2021, the Lender and the Company have a common director. As a result, the balance due to the Lender was reallocated from financing facilities to due to related parties. Total balance reallocated consisted of $2,577,137. Refer to note 14(a)(iii).

(ii) In connection with the closing of the private placement completed on May 14, 2021 (refer to note 11(b)(i)), Roland Phelps has retired as the Company's President and Chief Executive Officer and as a member of the Board of Directors. As a result, the balance due to G&F Phelps, a company controlled by Roland Phelps was reallocated from due to related parties to financing facilities. Total balance reallocated consisted of $3,163,593 (GBP 1,824,764) amalgamated loans balance and $1,414,446 (GBP 815,854) interest accrued balance. Refer to note 14(a)(ii).

As at June 30, 2021, G&F Phelps had amalgamated loans to the Company of $3,125,108 (GBP 1,824,774) (December 31, 2020 - $3,171,622 - GBP 1,824,764) included with financing liabilities (December 31, 2020 - due to related parties) bearing interest at 2% above UK base rates, repayable on demand and secured by a mortgage debenture on all the Company's assets. In April 2018, the interest increased to 6.75% + US$ 12 month LIBOR. Interest accrued on G&F Phelps loan is included with financing liabilities (December 31, 2020 - included with due to related parties). As at June 30, 2021, the amount of interest accrued is $1,476,366 (GBP 862,061) (December 31, 2020 - $1,339,503 - GBP 770,671).

The maturity date of the G&F Phelps loan has been extended to December 31, 2023. Interest may be deferred and added to the balance outstanding until March 31, 2022, at which point interest will be paid monthly. In consideration for extending the G&F loan and deferring interest, G&F Phelps has received, subject to regulatory approval, 1,700,000 warrants exercisable into one common share at an exercise price of $0.33, with said warrants expiring on December 31, 2023.

The fair value of the 1,700,000 warrants was estimated at $670,000 using the following Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 123.98% to 144.48%, risk-free interest rate - 0.32% and an expected average life of 2.63 years. The $670,000 was recorded as financing costs in the unaudited condensed interim consolidated statements of a loss.

11. Share Capital and Reserves

a) Authorized share capital

At June 30, 2021, 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, 2021, the issued share capital amounted to $57,559,598. The continuity of issued share capital for the periods presented is as follows:

 
                                                Number of 
                                                  common 
                                                  shares       Amount 
---------------------------------------------   ----------   ---------- 
 
Balance, December 31, 2019 and June 30, 2020    32,321,472  $50,123,910 
----------------------------------------------  ----------   ---------- 
 
Balance, December 31, 2020                      46,565,537  $52,933,594 
Shares issued in private placement (i)          26,663,264    7,998,980 
Warrants issued (i)                                      -   (3,258,578) 
Share issue costs (i)                               41,667     (792,045) 
Exercise of warrants                             1,000,000      677,647 
----------------------------------------------  ----------   ---------- 
Balance, June 30, 2021                          74,270,468  $57,559,598 
----------------------------------------------  ----------   ---------- 
 

(i) On May 14, 2021, Galantas completed a private placement of 26,663,264 units at a price of $0.30 per unit for aggregate gross proceeds of $7,998,980. Each unit comprises one common share and one common share purchase warrant. Each warrant will be exercisable into one additional common share at an exercise price of $0.40 for 24 months from the closing date of the private placement. There is a four-month and one day hold period on the trading of securities issued in connection with this private placement.

The fair value of the 26,663,264 warrants was estimated at $3,258,578 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 155.08%, risk-free interest rate - 0.32% and an expected average life of 2 years.

Ocean Partners acquired 1,666,667 units of the private placement, for consideration of $500,000 and the Company paid a finder's fee of 41,667 units to Ocean Partners resulting in the issuance of 1,708,334 common shares or 2.3% of the Company's issued and outstanding common shares on a non-diluted basis.

The 41,667 units paid as a finder's fee were valued at $20,417. The fair value of the 41,667 warrants was estimated at $8,783 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 155.08%, risk-free interest rate - 0.32% and an expected average life of 2 years.

(i) (continued) Roland Phelps, the Company's retired President and Chief Executive Officer, acquired 166,667 units for consideration of $50,000, increasing his holding to 5,100,484 common shares or 6.9% of the Company's issued and outstanding common shares on a non-diluted basis.

In respect of an under-writing by Ocean Partners, the Company paid a commitment fee of $112,500 in cash.

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, 2019             1,500,000   $    1.58 
Expired                               (1,500,000)       1.58 
------------------------------------  ----------    -------- 
Balance, June 30, 2020                         -   $       - 
-----------------------------------   ----------    -------- 
 
 
Balance, December 31, 2020             1,700,000   $    0.33 
Issued (notes 10(ii) and 11(b)(i))    28,404,931        0.40 
Exercised                             (1,000,000)       0.33 
------------------------------------  ----------    -------- 
Balance, June 30, 2021                29,104,931   $    0.39 
------------------------------------  ----------    -------- 
 

The following table reflects the actual warrants issued and outstanding as of June 30, 2021:

 
                                  Grant date  Exercise 
                       Number     fair value   price 
Expiry date          of warrants     ($)        ($) 
------------------   -----------  ----------  -------- 
 
May 14, 2023          26,704,931   3,267,361      0.40 
December 31, 2023      2,400,000     913,353      0.33 
-------------------  -----------  ----------  -------- 
                      29,104,931   4,180,714      0.39 
 ------------------  -----------  ----------  -------- 
 

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, 2019    1,395,000   $    0.92 
Expired                        (285,000)       1.05 
Cancelled (iii)                (515,000)       1.01 
----------------------------  ---------    -------- 
Balance, June 30, 2020          595,000   $    1.15 
----------------------------  ---------    -------- 
 
 
Balance, December 31, 2020      570,000   $    1.16 
Granted (i)(ii)               4,340,000        0.85 
----------------------------  ---------    -------- 
Balance, June 30, 2021        4,910,000   $    0.88 
----------------------------  ---------    -------- 
 

(i) On May 19, 2021, the Company granted 3,915,000 stock options to directors, employees and consultants of the Company to purchase common shares at $0.86 per share until May 19, 2026. The options will vest as to one third immediately and one third on each of May 19, 2022 and May 19, 2023. The fair value attributed to these options was $2,907,000 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, 2021, included in stock-based compensation is $1,136,252 related to the vested portion of these options.

(ii) On June 21, 2021, the Company granted 425,000 stock options to consultants and officers of the Company to purchase common shares at $0.73 per share until June 21, 2026. The options will vest as to one third immediately and one third on each of June 21, 2022 and June 21, 2023. The fair value attributed to these options was $266,000 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, 2021, included in stock-based compensation is $91,946 related to the vested portion of these options.

(iii) The portion of the estimated fair value of options granted in the prior years and vested during the three and six months ended June 30, 2021, amounted to $2,312 and $6,943, respectively (three and six months ended June 30, 2020 - $12,064 and $53,286, respectively). In addition, during the three and six months ended June 30, 2021, nil options granted in the prior years were cancelled (three and six months ended June 30, 2020 - 515,000 options cancelled) and therefore, $nil (three and six months ended June 30, 2020 - $nil and $57,510, respectively) of stock-based compensation was reversed related to the unvested portion of the options cancelled.

The following table reflects the actual stock options issued and outstanding as of June 30, 2021:

 
                               Weighted average                 Number of 
                                  remaining       Number of      options     Number of 
                    Exercise     contractual       options       vested       options 
Expiry date         price ($)    life (years)    outstanding  (exercisable)  unvested 
------------------  ---------  ----------------  -----------  -------------  --------- 
 
March 25, 2022        1.35           0.73            320,000        320,000      - 
April 19, 2023        1.10           1.80             25,000         25,000      - 
February 13, 2024     0.90           2.62            125,000        125,000      - 
June 27, 2024         0.90           2.99            100,000        100,000      - 
May 19, 2026          0.86           4.89          3,915,000      1,305,000  2,610,000 
June 21, 2026         0.73           4.98            425,000        141,667    283,333 
------------------  ---------  ----------------  -----------  -------------  --------- 
                      0.88           4.51          4,910,000      2,016,667  2,893,333 
------------------  ---------  ----------------  -----------  -------------  --------- 
 

12. Net Loss per Common Share

The calculation of basic and diluted loss per share for the three and six months ended June 30, 2021 was based on the loss attributable to common shareholders of $2,888,568 and $3,528,531, respectively (three and six months ended June 30, 2020 - $792,141 and $1,472,456, respectively) and the weighted average number of common shares outstanding of 60,494,975 and 53,501,436, respectively (three and six months ended June 30, 2020 - 32,321,472 and 32,321,472, respectively) for basic and diluted loss per share. Diluted loss did not include the effect of 29,104,931 warrants (three and six months ended June 30, 2020 - nil) and 4,910,000 options (three and six months ended June 30, 2020 - 595,000) for the three and six months ended June 30, 2021, as they are anti-dilutive.

13. Revenues

Shipments of concentrate under the off-take arrangements commenced during the second quarter of 2019. Concentrate sales provisional revenues during the three and six months ended June 30, 2021 totaled approximately US$218,000 and US$785,000, respectively (three and six months ended June 30, 2020 - US$nil and US$186,000, respectively). However, until the mine reaches the commencement of commercial production, the net proceeds from concentrate sales will be offset against Development assets.

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      2021        2020       2021      2020 
--------------------------------  -----   ---------   --------   --------   ------- 
Interest on related party loans    (i)   $   39,660  $  79,872  $ 118,536  $166,405 
--------------------------------  -----   ---------   --------   --------   ------- 
 

(i) Refer to note 10(i)(ii).

(ii) Refer to note 11(b)(i).

(iii) As at June 30, 2021, the Lender and the Company have a common director. As a result, the balance due to the Lender was reallocated from financing facilities to due to related parties. Total balance reallocated consisted of $2,577,137. Refer to note 10(i).

(b) Remuneration of officer and directors of the Company was as follows:

 
                              Three Months Ended     Six Months Ended 
                                   June 30,              June 30, 
                               2021        2020       2021      2020 
--------------------------   ---------   --------   --------   ------- 
Salaries and benefits (1)   $   50,380  $ 117,228  $ 167,986  $231,727 
Stock-based compensation       828,180      6,412    830,438    15,726 
--------------------------   ---------   --------   --------   ------- 
                            $  878,560  $ 123,640  $ 998,424  $247,453 
--------------------------   ---------   --------   --------   ------- 
 

(1) Salaries and benefits include director fees. As at June 30, 2021, due to directors for fees amounted to $64,250 (December 31, 2020 - $126,536) and due to officers, mainly for salaries and benefits accrued amounted to $36,592 (December 31, 2020 - $782,145 - GBP 458,701), and is included with due to related parties.

(c) As of June 30, 2021, Ross Beaty owns 3,744,747 common shares of the Company or approximately 5.04% of the outstanding common shares. Roland Phelps, former Chief Executive Officer and former director, owns, directly and indirectly, 5,100,484 common shares of the Company or approximately 6.87% of the outstanding common shares of the Company. Premier Miton owns 4,848,243 common shares of the Company or approximately 6.53%. Melquart owns, directly and indirectly, 23,073,528 common shares of the Company or approximately 31.07% of the outstanding common shares of the Company. Eric Sprott owns 6,333,333 common shares of the Company or approximately 8.53%. Mike Gentile owns 4,000,000 common shares of the Company or approximately 5.39%. The remaining 36.57% 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, 2021         United Kingdom    Canada       Total 
-------------------   --------------   ---------   ---------- 
 
Current assets       $     1,072,639  $5,964,824  $ 7,037,463 
Non-current assets   $    23,170,402  $   57,158  $23,227,560 
Revenues             $             -  $        -  $         - 
-------------------   --------------   ---------   ---------- 
 
December 31, 2020     United Kingdom    Canada       Total 
-------------------   --------------   ---------   ---------- 
 
Current assets       $     1,232,744  $   55,479  $ 1,288,223 
Non-current assets   $    22,373,581  $   56,793  $22,430,374 
Revenues             $             -  $        -  $         - 
-------------------   --------------   ---------   ---------- 
 

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 ("HMRC") in the amount of $521,127 (GBP 304,290) in connection with an aggregate levy arising from the removal of waste rock from the mine site during 2008 and early 2009. Omagh Minerals believed this claim to be without merit. An appeal was lodged with the Tax Tribunals Service and the hearing started at the beginning of March 2017 and following a number of adjournments was completed in August 2018. During the year ended December 31, 2019, the Tax Tribunals Service issued their judgement dismissing the appeal by Omagh in respect of the assessments. A provision has now been included in the unaudited condensed interim consolidated financial statements in respect of the aggregates levy plus interest and penalty.

There is a contingent liability in respect of potential additional interest which may be applied in respect of the aggregates levy dispute. Omagh is unable to make a reliable estimate of the amount of the potential additional interest that may be applied by HMRC.

17. Events After the Reporting Period

On July 26, 2021, the Company announced that it has retained Independent Trading Group ("ITG") to provide market making services in accordance with TSXV policies.

ITG will trade the securities of Galantas on the TSXV for the purposes of maintaining an orderly market. In consideration of the services provided by ITG, the Company will pay ITG a monthly cash fee of $5,000 for a minimum term of three months and renewable thereafter. Galantas and ITG are unrelated and unaffiliated entities. ITG will not receive shares or options as compensation. The capital used for market making will be provided by ITG.

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR WPURURUPGGMU

(END) Dow Jones Newswires

August 31, 2021 02:00 ET (06:00 GMT)

Galantas Gold (LSE:GAL)
Historical Stock Chart
From Mar 2024 to Mar 2024 Click Here for more Galantas Gold Charts.
Galantas Gold (LSE:GAL)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Galantas Gold Charts.