TIDMGAL
RNS Number : 9312T
Galantas Gold Corporation
30 November 2021
GALANTAS REPORTS FINANCIAL RESULTS FOR THE QUARTERED SEPTEMBER
30, 2021
November 29, 2021: Galantas Gold Corporation (TSX-V & AIM:
GAL; OTCQX: GALKF) ("Galantas" or the "Company") is pleased to
announce its unaudited financial results for the quarter ended
September 30, 2021.
Financial Highlights
Highlights of the third quarter 2021 results are summarized
below. All figures are in Canadian dollars unless otherwise
stated.
All figures denominated in Canadian Dollars (CDN$)
Quarter Ended Nine Months Ended
September 30 September 30
2021 2020 2021 2020
Revenue $ 0 $ 0 $ 0 $ 0
Cost and expenses of operations $ (74,462) $ (35,658) $ (181,943) $ (102,733)
Loss before the undernoted $ (74,462) $ (35,658) $ (181,943) $ (102,733)
Depreciation $ (89,151) $ (80,213) $ (248,304) $ (253,331)
General administrative expenses $ (914,174) $ (597,315) $(4,138,326) $ (1,904,810)
Foreign exchange (loss) / gain $ (95,489) $ (63,770) $ (133,234) $ (11,462)
Net Loss for the period $ (1,173,276) $ (776,956) $(4,701,807) $ (2,249,412)
Working Capital Surplus / (Deficit) $ 2,454,581 $ (7,936,041) $ 2,454,581 $ (7,936,041)
Cash profit / (loss) from operating activities before
changes in non-cash working capital $ (1,116,243) $ (359,304) $ (612,154) $ (1,007,785)
Cash at September 30, 2021 $ 3,881,674 $ 638,433 $ 3,881,674 $ 638,433
Sales revenue for the quarter ended September 30, 2021 amounted
to $Nil compared to revenue of $Nil for the quarter ended September
30, 2020. Shipments of concentrate commenced during the third
quarter of 2019. Concentrate sales provisional revenues totalled
US$329,000 for the third quarter of 2021 compared to US$690,000 for
the third 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 September 30, 2021 amounted
to $ 1,173,276 (2020: $776,956) and the cash inflow from operating
activities before changes in non-cash working capital for the
quarter ended September 30, 2021 amounted to $(1,116,243 (2020:
($359,304)). The difference in the net loss is mainly due to stock
based compensation and additional investor relations costs and
marketing activities.
The Company had a cash balance of $3,881,674 at September 30,
2021 compared to $638,433 at September 30, 2020. The working
capital surplus at September 30, 2021 amounted to $2,454,581
compared to a working capital deficit of $7,700,406 at June 30,
2020.
Exploration
The Company, during the month of July, began an initial
4,000-metre Phase 1 drill program targeting the Joshua Vein from
surface, and targeting the Kearney Vein with underground
drilling.
On November 24, 2021, Galantas announced results for the second
underground hole in this drilling program. The highlights of this
drilling program are detailed in the release and include a
significant intercept of 26.7 g/t gold over 2.9 metres on the
Kearney vein system. On October 12, 2021, Galantas announced
initial drill results which included an intercept of 17.7 g/t gold
over 2.5 metres.
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.
Mario Stifano, CEO of Galantas, commented: "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 the site
management and operations team as we commence a phased restart of
operations early in the new year."
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/9312T_1-2021-11-29.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 (Chief Operating Officer),
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, Chief Executive Officer
Email: info@galantas.com
Website: www.galantas.com
Telephone: +44 (0)28 8224 1100
Grant Thornton UK LLP (AIM Nomad)
Philip Secrett, Harrison Clarke, George Grainger
Telephone: +44(0)20 7383 5100
Panmure Gordon & Co (AIM Broker & Corporate Adviser)
John Prior, Hugh Rich
Telephone: +44(0)20 7886 2500
GALANTAS GOLD CORPORATION
Condensed Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited)
Three and Nine Months Ended September 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.
Condensed Interim Consolidated Statements of Financial
Position
As at As at
September December
30, 31,
2021 2020
------------------------------------------------ ----------- -----------
ASSETS
Current assets
Cash and cash equivalents $ 3,881,674 $ 612,094
Accounts receivable and prepaid expenses
(note 4) 997,048 594,960
Inventories (note 5) 83,047 81,169
------------------------------------------------ ----------- -----------
Total current assets 4,961,769 1,288,223
Non-current assets
Property, plant and equipment (note 6) 23,295,499 21,158,103
Long-term deposit (note 8) 513,690 521,430
Exploration and evaluation assets (note
7) 1,142,300 750,741
------------------------------------------------ ----------- -----------
Total non-current assets 24,951,489 22,430,274
------------------------------------------------ ----------- -----------
Total assets $ 29,913,258 $ 23,718,497
------------------------------------------------ ----------- -----------
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities
(notes 9 and 16) $ 2,398,887 $ 1,350,142
Current portion of financing facilities
(note 10) - 2,186,272
Due to related parties (note 14) 108,301 5,461,893
------------------------------------------------ ----------- -----------
Total current liabilities 2,507,188 8,998,307
Non-current liabilities
Non-current portion of financing facilities
(note 10) 4,680,784 -
Due to related parties (note 14) 2,693,097 -
Decommissioning liability (note 8) 597,505 598,275
------------------------------------------------ ----------- -----------
Total non-current liabilities 7,971,386 598,275
------------------------------------------------ ----------- -----------
Total liabilities 10,478,574 9,596,582
------------------------------------------------ ----------- -----------
Equity
Share capital (note 11(a)(b)) 57,783,570 52,933,594
Reserves 14,898,721 9,734,121
Deficit (53,247,607) (48,545,800)
------------------------------------------------ ----------- -----------
Total equity 19,434,684 14,121,915
------------------------------------------------ ----------- -----------
Total equity and liabilities $ 29,913,258 $ 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)
Condensed Interim Consolidated Statements of Loss
Three Months Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
-------------------------------------------- ---------- ---------- --- ---------- ----------
Revenues
Sales of concentrate (note 13) $ - $ - $ - $ -
Cost and expenses of operations
Cost of sales 74,462 35,658 181,943 102,733
Depreciation (note 6) 89,151 80,213 248,304 253,331
-------------------------------------------- ---------- ---------- --- ---------- ----------
163,613 115,871 430,247 356,064
-------------------------------------------- ---------- ---------- --- ---------- ----------
Loss before general administrative and
other expenses (163,613) (115,871) (430,247) (356,064)
-------------------------------------------- ---------- ---------- --- ---------- ----------
General administrative expenses
Management and administration wages
(note 14) 112,997 141,068 339,031 425,404
Other operating expenses 65,327 37,042 137,742 188,462
Accounting and corporate 48,891 14,319 137,348 43,572
Legal and audit 32,487 21,299 113,124 92,251
Stock-based compensation (note 11(d)) 404,064 6,791 1,639,205 2,567
Shareholder communication and investor
relations 133,522 42,816 310,263 135,774
Transfer agent 3,084 3,718 14,991 58,192
Director fees (note 14) 19,500 11,250 43,500 26,000
General office 8,648 4,097 19,987 9,586
Accretion expenses (notes 8 and 10) 2,742 170,698 135,158 481,616
Loan interest and bank charges less
deposit interest (notes 10 and 14) 82,912 144,217 243,795 441,386
Financing costs (note 10) - - 1,004,182 -
-------------------------------------------- ---------- ---------- --- ---------- ----------
914,174 597,315 4,138,326 1,904,810
Other expenses
Foreign exchange loss (gain) 102,648 63,770 140,393 (11,462)
Gain on disposal of property, plant and
equipment (7,159) - (7,159) -
-------------------------------------------- ---------- ---------- --- ---------- ----------
95,489 63,770 133,234 (11,462)
-------------------------------------------- ---------- ---------- --- ---------- ----------
Net loss for the period $(1,173,276) $ (776,956) $ (4,701,807) $(2,249,412)
-------------------------------------------- ---------- ---------- --- ---------- ----------
Basic and diluted net loss per share (note
12) $ (0.02) $ (0.02) $ (0.08) $ (0.07)
-------------------------------------------- ---------- ---------- --- ---------- ----------
Weighted average number of common shares
outstanding - basic and diluted 74,488,086 34,675,875 60,565,996 33,099,093
-------------------------------------------- ---------- ---------- --- ---------- ----------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
Condensed Interim Consolidated Statements of Comprehensive
Loss
Three Months Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
------------------------------------------------ ---------- -------- ---------- ----------
Net loss for the period $(1,173,276) $(776,956) $(4,701,807) $(2,249,412)
Other comprehensive income (loss)
Items that will be reclassified subsequently
to profit or loss
Exchange differences on translating
foreign operations 30,489 96,618 (264,805) (190,804)
------------------------------------------------ ---------- -------- ---------- ----------
Total comprehensive loss $(1,142,787) $(680,338) $(4,966,612) $(2,440,216)
------------------------------------------------ ---------- -------- ---------- ----------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
Condensed Interim Consolidated Statements of Cash Flows
Nine Months Ended
September 30,
2021 2020
------------------------------------------------------ ---------- ----------
Operating activities
Net loss for the period $(4,701,807) $(2,249,412)
Adjustment for:
Depreciation (note 6) 248,304 253,331
Stock-based compensation (note 11(d)) 1,639,205 2,567
Accrued interest (notes 10 and 14) 158,404 360,840
Foreign exchange loss 407,470 143,273
Accretion expenses (notes 8 and 10) 135,158 481,616
Financing costs (note 10) 1,004,182 -
Gain on disposal of property, plant and equipment (7,159) -
Non-cash working capital items:
Accounts receivable and prepaid expenses (415,954) 90,929
Inventories (3,129) (858)
Accounts payable and other liabilities 137,074 (717,760)
Due to related parties 75,638 334,647
------------------------------------------------------ ---------- ----------
Net cash and cash equivalents used in operating
activities (1,322,614) (1,300,827)
------------------------------------------------------ ---------- ----------
Investing activities
Purchase of property, plant and equipment (2,696,746) (436,519)
Proceeds from sale of property, plant and equipment 8,561 -
Exploration and evaluation assets (402,702) (95,900)
------------------------------------------------------ ---------- ----------
Net cash and cash equivalents used in investing
activities (3,090,887) (532,419)
------------------------------------------------------ ---------- ----------
Financing activities
Proceeds of private placements (note 11(b)(i)(ii)) 7,998,980 637,454
Share issue costs (775,137) (54,980)
Proceeds from exercise of warrants 495,333 -
Repayment of financing facilities (note 10) (23,802) (25,023)
------------------------------------------------------ ---------- ----------
Net cash and cash equivalents provided by financing
activities 7,695,374 557,451
------------------------------------------------------ ---------- ----------
Net change in cash and cash equivalents 3,281,873 (1,275,795)
Effect of exchange rate changes on cash held
in foreign currencies (12,293) 808
Cash and cash equivalents, beginning of period 612,094 1,913,420
Cash and cash equivalents, end of period $ 3,881,674 $ 638,433
------------------------------------------------------ ---------- ----------
Cash $ 3,881,674 $ 638,433
Cash equivalents - -
------------------------------------------------------ ---------- ----------
Cash and cash equivalents $ 3,881,674 $ 638,433
------------------------------------------------------ ---------- ----------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
Condensed Interim Consolidated Statements of Changes in
Equity
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
Shares
issued
in private
placement
(note 11(b)(i)) 637,454 - - - - - 637,454
Warrants
issued
(note 10(i)) - 340,000 - - - - 340,000
Share issue
costs (54,980) - - - - - (54,980)
Expiry
of warrants - (786,000) 786,000 - - - -
Stock-based
compensation
(note 11(d)) - - 2,567 - - - 2,567
Exchange
differences
on translating
foreign
operations - - - (190,804) - - (190,804)
Net loss
for the
period - - - - - (2,249,412) (2,249,412)
--------------------------- ---------- --------- ----------- ----------- ----------- ----------- ----------
Balance, September
30, 2020 $50,706,384 $ 340,000 $ 8,374,147 $ 605,950 $ 248,078 $(47,566,760) $12,707,799
--------------------------- ---------- --------- ----------- ----------- ----------- ----------- ----------
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)(ii)) 7,998,980 - - - - - 7,998,980
Warrants
issued
(note 11(b)(ii)) (3,258,578) 3,258,578 - - - - -
Warrants
issued
(note 10(ii)) - 670,000 - - - - 670,000
Share issue
costs (note
11(b)(ii)) (783,920) 8,783 - - - - (775,137)
Warrant
extension
(note 10(i)) - 251,000 - - - - 251,000
Stock-based
compensation
(note 11(d)) - - 1,639,205 - - - 1,639,205
Exercise
of warrants 893,494 (398,161) - - - - 495,333
Exchange
differences
on translating
foreign
operations - - - (264,805) - - (264,805)
Net loss
for the
period - - - - - (4,701,807) (4,701,807)
--------------------------- ---------- --------- ----------- ----------- ----------- ----------- ----------
Balance, September
30, 2021 $57,783,570 $4,130,200 $ 10,020,587 $ 747,934 $ - $(53,247,607) $19,434,684
--------------------------- ---------- --------- ----------- ----------- ----------- ----------- ----------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
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 September 30, 2021, the Company had a deficit of
$53,247,607 (December 31, 2020 - $48,545,800). Comprehensive loss
for the nine months ended September 30, 2021 was $4,966,612 (nine
months ended September 30, 2020 - $2,440,216). 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. On September 1, 2021, the Company announced that its common
shares are now qualified for trading under the symbol GALKF on the
OTCQX in the United States. The primary office is located at The
Canadian Venture Building, 82 Richmond Street East, Toronto,
Ontario, Canada, M5C 1P1.
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 November 26, 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
September December
30, 31,
2021 2020
----------------------------------------------- --------- --------
Sales tax receivable - Canada $ 6,086 $ 3,987
Valued added tax receivable - Northern Ireland 197,024 56,422
Accounts receivable 340,527 295,510
Prepaid expenses 453,411 239,041
----------------------------------------------- --------- --------
$ 997,048 $ 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
September December
30, 31,
2021 2020
-------------------------- --------- --------
Less than 3 months $ 290,405 $ 120,085
3 to 12 months 244,585 117,615
More than 12 months 8,647 118,219
-------------------------- --------- --------
Total accounts receivable $ 543,637 $ 355,919
-------------------------- --------- --------
5. Inventories
As at As at
September December
30, 31,
2021 2020
------------------------ --------- --------
Concentrate inventories $ 83,047 $ 81,169
------------------------ --------- --------
6. Property, Plant and Equipment
Freehold
land and Plant 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 - 467,953 16,181 16,174 2,196,438 2,696,746
Disposals - (6,289) - - - (6,289)
Foreign
exchange
adjustment (35,597) (102,680) (2,413) (2,841) (285,659) (429,190)
------------ --------- --------- ---------- --------- ----------- ----------
Balance,
September
30, 2021 $2,362,574 $7,310,192 $ 176,339 $ 204,755 $ 21,256,455 $31,310,315
------------ --------- --------- ---------- --------- ----------- ----------
Freehold
land Plant
Accumulated and and Motor Office Development
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 4,548 227,978 8,075 7,703 - 248,304
Disposal - (4,801) - - - (4,801)
Foreign
exchange
adjustment (29,541) (86,104) (2,028) (1,959) - (119,632)
------------- --------- ---------- --------- ---------- ----------- ---------
Balance,
September
30, 2021 $1,961,468 $ 5,785,659 $ 136,154 $ 131,535 $ - $8,014,816
------------- --------- ---------- --------- ---------- ----------- ---------
Freehold Plant
land
and and Motor Office Development
assets
Carrying value buildings machinery vehicles equipment (i) Total
--------------------- --------- --------- -------- --------- ---------- ----------
Balance, December 31,
2020 $ 411,710 $1,302,622 $ 32,464 $ 65,631 $19,345,676 $21,158,103
--------------------- --------- --------- -------- --------- ---------- ----------
Balance, September
30, 2021 $ 401,106 $1,524,533 $ 40,185 $ 73,220 $21,256,455 $23,295,499
--------------------- --------- --------- -------- --------- ---------- ----------
(i) Development assets are expenditures for the underground
mining operations in Omagh.
7. Exploration and Evaluation Assets
Exploration and evaluation assets
Cost
---------------------------- -----------------------------------
Balance, December 31, 2019 $ 661,726
Additions 129,031
Impairment (47,490)
Foreign exchange adjustment 7,474
---------------------------- ------------------------------ ---
Balance, December 31, 2020 750,741
Additions 402,702
Foreign exchange adjustment (11,143)
---------------------------- ------------------------------
Balance, September 30, 2021 $ 1,142,300
---------------------------- ------------------------------ ---
Carrying value
Balance, December 31, 2020 $ 750,741
---------------------------- ------------------------------ ---
Balance, September 30, 2021 $ 1,142,300
---------------------------- ------------------------------ ---
8. Decommissioning Liability
The Company's decommissioning liability is a result of mining
activities at the Omagh mine in Northern Ireland. The Company
estimated its decommissioning liability at September 30, 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 September 30,
2021, the estimated fair value of the liability is $597,505
(December 31, 2020 - $598,275). Changes in the provision during the
nine months ended September 30, 2021 are as follows:
As at As at
September December
30, 31,
2021 2020
----------------------------------------------- --------- --------
Decommissioning liability, beginning of period $ 598,275 $ 580,303
Accretion 8,209 10,863
Foreign exchange (8,979) 7,109
----------------------------------------------- --------- --------
Decommissioning liability, end of period $ 597,505 $ 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 September 30, 2021
(GBP 300,000 was funded as of December 31, 2020) and reported as
long-term deposit of $513,690 (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
September December
30, 31,
2021 2020
--------------------------------------------- --------- ---------
Accounts payable $ 953,249 $ 423,630
Accrued liabilities 1,445,638 926,512
--------------------------------------------- --------- ---------
Total accounts payable and other liabilities $2,398,887 $1,350,142
--------------------------------------------- --------- ---------
The following is an aged analysis of the accounts payable and
other liabilities:
As at As at
September December
30, 31,
2021 2020
--------------------------------------------- --------- ---------
Less than 3 months $1,632,845 $ 432,946
3 to 12 months 95,642 76,800
12 to 24 months - 161,327
More than 24 months 670,400 679,069
--------------------------------------------- --------- ---------
Total accounts payable and other liabilities $2,398,887 $1,350,142
--------------------------------------------- --------- ---------
10. Financing Facilities
Amounts payable on the Company's financial facilities are as
follow:
As at As at
September December
30, 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)(ii) 168,074 214,377
Foreign exchange adjustment 222,389 298,503
--------------------------------------------------- ---------- ----------
Financing facilities - long term portion $ 4,680,784 $ -
--------------------------------------------------- ---------- ----------
(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.
2021 activities
On May 14, 2021, 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.
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.
2021 activities
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 nine months ended September 30, 2021, the
Company recorded accretion expense of $nil 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 nine months ended September 30, 2021, the
Company recorded interest expense of $nil 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 nine months ended September 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)(ii)), 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 September 30, 2021, G&F Phelps had amalgamated loans
to the Company of $3,124,560 (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
September 30, 2021, the amount of interest accrued is $1,556,224
(GBP 908,850) (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.
During the three and nine months ended September 30, 2021, the
Company recorded interest expense of $81,254 in the unaudited
condensed interim consolidated statements of loss in regards with
this loan facility (year ended December 31, 2020 - $214,377).
11. Share Capital and Reserves
a) Authorized share capital
At September 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 September 30, 2021, the issued share capital amounted to
$57,783,570. The continuity of issued share capital for the periods
presented is as follows:
Number of
common
shares Amount
---------------------------------------- ---------- ----------
Balance, December 31, 2019 32,321,472 $50,123,910
Shares issued in private placement (i) 2,833,132 637,454
Share issue costs - (54,980)
----------------------------------------- ---------- ----------
Balance, September 30, 2020 35,154,604 $50,706,384
----------------------------------------- ---------- ----------
Balance, December 31, 2020 46,565,537 $52,933,594
Shares issued in private placement (ii) 26,663,264 7,998,980
Warrants issued (ii) - (3,258,578)
Share issue costs (ii) 41,667 (783,920)
Exercise of warrants 1,413,333 893,494
----------------------------------------- ---------- ----------
Balance, September 30, 2021 74,683,801 $57,783,570
----------------------------------------- ---------- ----------
(i) On July 17, 2020, the Company completed a private placement
for 2,833,132 common shares at an issue price of $0.225
(UKGBP0.1328) per share for gross proceeds of $637,454 (GBP
376,240). The net proceeds to be raised by the private placement
are intended to be used to support mine operations and provide
general working capital of the Company.
The private placement included a subscription by LF Miton UK
Smaller Companies Fund, which has subscribed for 527,108 common
shares in the private placement and is managed by Premier Fund
Managers Ltd ("Premier Miton"). Post-closing, this fund holds
3,222,330 shares, equivalent to 9.17% of the Company's common
shares. The total number of shares controlled by Premier Miton post
completion of the private placement is 4,848,243, representing
13.89% of the Company's enlarged issued and outstanding common
shares.
The private placement also included a subscription from
Melquart, for 1,506,024 common shares, which gives rise to an
enlarged holding of 9,262,595 common shares post completion of the
private placement, or 26.35% of the Company's enlarged issued and
outstanding common shares.
Commission payable to brokers in Canada and the United Kingdom
in relation to the private placement totals $33,673 (GBP
19,874).
(ii) 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.
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 exercise
Number of warrants price
Balance, December 31, 2019 1,500,000 $ 1.58
Issued (note 10(i)) 1,700,000 0.33
Expired (1,500,000) 1.58
------------------------------------- ------------------ -----------------
Balance, September 30, 2020 1,700,000 $ 0.33
------------------------------------- ------------------ -----------------
Balance, December 31, 2020 1,700,000 $ 0.33
Issued (notes 10(ii) and 11(b)(ii)) 28,404,931 0.40
Exercised (1,413,333) 0.35
------------------------------------- ------------------ -----------------
Balance, September 30, 2021 28,691,598 $ 0.39
------------------------------------- ------------------ -----------------
The following table reflects the actual warrants issued and
outstanding as of September 30, 2021:
Grant
Number date fair Exercise
of value price
Expiry date warrants ($) ($)
------------------ ---------- ---------- --------
May 14, 2023 26,291,598 3,216,847 0.40
December 31, 2023 2,400,000 913,353 0.33
------------------- ---------- ---------- --------
28,691,598 4,130,200 0.39
------------------ ---------- ---------- --------
d) Stock options
The following table shows the continuity of stock options for
the periods presented:
Weighted
Number of average exercise
options Price
---------------------------- --------- -----------------
Balance, December 31, 2019 1,395,000 $ 0.92
Expired (285,000) 1.05
Cancelled (iv) (540,000) 1.01
----------------------------- --------- -----------------
Balance, September 30, 2020 570,000 $ 1.16
----------------------------- --------- -----------------
Balance, December 31, 2020 570,000 $ 1.16
Granted (i)(ii)(iii) 4,360,000 0.85
----------------------------- --------- -----------------
Balance, September 30, 2021 4,930,000 $ 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 nine
months ended September 30, 2021, included in stock-based
compensation is $366,362 and $1,502,614, respectively 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 nine months
ended September 30, 2021, included in stock-based compensation is
$33,523 and $125,469, respectively related to the vested portion of
these options.
(iii) On August 27, 2021, the Company granted 20,000 stock
options to an employee of the Company to purchase common shares at
$0.86 per share until August 27, 2026. The options will vest as to
one third immediately and one third on each of August 27, 2022 and
August 27, 2023. The fair value attributed to these options was
$11,000 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 nine months
ended September 30, 2021, included in stock-based compensation is
$4,179 related to the vested portion of these options.
(iv) The portion of the estimated fair value of options granted
in the prior years and vested during the three and nine months
ended September 30, 2021, amounted to $nil and $6,943, respectively
(three and nine months ended September 30, 2020 - $7,235 and
$60,521, respectively). In addition, during the three and nine
months ended September 30, 2021, nil options granted in the prior
years were cancelled (three and nine months ended September 30,
2020 - 25,000 and 540,000 options cancelled) and therefore, $nil
(three and nine months ended September 30, 2020 - $444 and $57,954,
respectively) of stock-based compensation was reversed related to
the unvested portion of the options cancelled.
The following table reflects the actual stock options issued and
outstanding as of September 30, 2021:
Weighted average
remaining Number of Number of options Number of
Exercise contractual options vested options
Expiry date price ($) life (years) outstanding (exercisable) unvested
------------------ --------- ----------------------- ----------- ----------------- ---------
March 25, 2022 1.35 0.48 320,000 320,000 -
April 19, 2023 1.10 1.55 25,000 25,000 -
February 13, 2024 0.90 2.37 125,000 125,000 -
June 27, 2024 0.90 2.74 100,000 100,000 -
May 19, 2026 0.86 4.64 3,915,000 1,305,000 2,610,000
June 21, 2026 0.73 4.73 425,000 141,667 283,333
August 27, 2026 0.86 4.91 20,000 6,667 13,333
------------------- --------- ----------------------- ----------- ----------------- ---------
0.88 4.26 4,930,000 2,023,334 2,906,666
------------------ --------- ----------------------- ----------- ----------------- ---------
12. Net Loss per Common Share
The calculation of basic and diluted loss per share for the
three and nine months ended September 30, 2021 was based on the
loss attributable to common shareholders of $1,173,276 and
$4,701,807, respectively (three and nine months ended September 30,
2020 - $776,956 and $2,249,412, respectively) and the weighted
average number of common shares outstanding of 74,488,086 and
60,565,996, respectively (three and nine months ended September 30,
2020 - 34,675,875 and 33,099,093, respectively) for basic and
diluted loss per share. Diluted loss did not include the effect of
28,691,598 warrants (three and nine months ended September 30, 2020
- 1,700,000) and 4,930,000 options (three and nine months ended
September 30, 2020 - 570,000) for the three and nine months ended
September 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 nine months ended
September 30, 2021 totaled approximately US$329,000 and
US$1,114,000, respectively (three and nine months ended September
30, 2020 - US$690,000 and US$876,000, 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
Nine Months Ended
September 30, September 30,
Note 2021 2020 2021 2020
------------------------------------- ----- -------- ---------- -------- ---------
Interest on related party loans (i) $ 40,861 $ 77,614 159,397 $ 244,019
-------------------------------------- ------ -------- ---------- -------- ---------
(i) Refer to note 10(i)(ii).
(ii) Refer to note 11(b)(i)(ii).
(iii) As at September 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).
As at September 30, 2021, financial liabilities due to the
Lender and recorded as due to related parties on the unaudited
condensed interest consolidated statement of financial position is
$2,693,097.
(b) Remuneration of officer and directors of the Company was as
follows:
Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
-------------------------- --------- -------- --------- -------
Salaries and benefits (1) $ 93,305 $ 120,899 $ 261,291 $352,626
Stock-based compensation 267,570 4,389 1,098,008 20,115
-------------------------- --------- -------- --------- -------
$ 360,875 $ 125,288 $1,359,299 $372,741
-------------------------- --------- -------- --------- -------
(1) Salaries and benefits include director fees. As at September
30, 2021, due to directors for fees amounted to $83,750 (December
31, 2020 - $126,536) and due to officers, mainly for salaries and
benefits accrued amounted to $24,551 (December 31, 2020 - $782,145
- GBP 458,701), and is included with due to related parties.
(c) As of September 30, 2021, Ross Beaty owns 3,744,747 common
shares of the Company or approximately 5.01% 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 6.83% of the outstanding
common shares of the Company. Premier Miton owns 4,848,243 common
shares of the Company or approximately 6.49%. Melquart owns,
directly and indirectly, 23,073,528 common shares of the Company or
approximately 30.89% of the outstanding common shares of the
Company. Eric Sprott owns 6,333,333 common shares of the Company or
approximately 8.48%. Mike Gentile owns 4,000,000 common shares of
the Company or approximately 5.36%. The remaining 36.94% 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:
September 31, 2020 United Kingdom Canada Total
------------------- ---------------- --------- ----------
Current assets $ 1,683,030 $3,278,739 $ 4,961,769
Non-current assets $ 24,894,466 $ 57,023 $24,951,489
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 $521,036 (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.
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