TIDMGAL
RNS Number : 2966X
Galantas Gold Corporation
26 August 2022
GALANTAS REPORTS FINANCIAL RESULTS FOR THE QUARTER AND SIX
MONTHSED JUNE 30, 2022
August 26, 2022: Galantas Gold Corporation (TSX-V & AIM:
GAL; OTCQX: GALKF) ("Galantas" or the "Company") is pleased to
announce its unaudited financial results for the Quarter and Six
Months ended June 30, 2022.
Financial Highlights
Highlights of the second quarter 2022 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
2022 2021 2022 2021
Revenue $ 0 $ 0 $ 0 $ 0
Cost and expenses of operations $ (66,995) $ (61,333) $ (113,634) $ (107,481)
Loss before the undernoted $ (66,995) $ (61,333) $ (113,634) $ (107,481)
Depreciation $ (148,336) $ (87,088) $ (278,867) $ (159,153)
General administrative expenses $(1,412,941) $ (2,719,055) $ 2,584,111) $ (3,224,152)
Foreign exchange gain / (loss) $ 48,104 $ 21,092) $ (19,368) $ (37,745)
Net Loss for the period $ 1,580,168) $ (2,888,568) $ (2,995,980) $ (3,528,531)
Working Capital (Deficit) / Surplus $(3,687,844) $ 4,505,905 $ (3,687,844) $ 4,505,905
Cash (loss) / profit from operating activities before
changes in non-cash working capital $(1,738,055) $ 144,806 $ (1,738,055) $ 144,806
Cash at June 30, 2022 $ 903,435 $ 6,142,477 $ 903,435 $ 6,142,477
Sales revenue for the quarter ended June 30, 2022 amounted to
$Nil compared to revenue of $Nil for the quarter ended June 30,
2021. Shipments of concentrate commenced during the third quarter
of 2019. Concentrate sales provisional revenues totalled US$Nil for
the second quarter of 2022 compared to US$218,000 for the second
quarter of 2021. 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, 2022 amounted to
$1,580,568 (2021: $2,888,568) and the cash outflow from operating
activities before changes in non-cash working capital for the
quarter ended June 30, 2022 amounted to $1,738,055 (2021:
$144,806). The main difference in the reduction in net loss is due
to a reduction in the value attributed to stock based compensation
and a reduction in financing activities from 2021.
The Company had a cash balance of $903,455 at June 30, 2022
compared to $6,142,477 at June 30, 2021. The working capital
deficit at June 30, 2022 amounted to $3,687,844 compared to a
working capital surplus of $4,505,905 at June 30, 2021.
Exploration
On August 4, 2022, the Company announced results for three holes
from its ongoing 4,000-metre drilling program at the Omagh Project,
including a hole that intersected 31.8 grams per tonne gold and
39.2 grams per tonne silver over 4.4 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.
Ongoing development of the underground decline will facilitate
deeper drilling and more precise targeting of dilation zones to the
south at Kearney, planned later this year. Drilling is also planned
from the 1084 level, with the aim of identifying and delineating
new dilation zones to the north at Kearney.
The secondary egress has been commissioned and blasting of the
first stope has commenced. The Company is reviewing its mine plan
and production guidance for the next 16 months including the timing
to advance development to the higher grade Joshua Vein to provide
multiple mine headings as well as underground drill platforms to
extend the mineralization to depth and test new targets.
The Company is experiencing cost pressures in fuel and energy
costs as well as input costs including labor and supplies. The long
term impact of macroeconomic cost pressures are difficult to
accurately assess at the moment and result from supply chain issues
arising from the COVID pandemic and energy cost increases resulting
from the war in Ukraine.
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/2966X_1-2022-8-25.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.
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, Samuel
Littler
Telephone: +44(0)20 7383 5100
Panmure Gordon & Co (AIM Joint Broker & Corporate
Adviser)
Hugh Rich, John Prior
Telephone: +44(0)20 7886 2500
SP Angel Corporate Finance LLP (AIM Joint Broker)
David Hignell, Charlie Bouverat (Corporate Finance)
Grant Barker (Sales & Broking)
Telephone: +44(0)20 3470 0470
GALANTAS GOLD CORPORATION
Condensed Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited)
Three and Six Months Ended June 30, 2022
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,
2022 2021
------------------------------------------------------------ ----------- ------------
ASSETS
Current assets
Cash and cash equivalents $ 903,435 $ 1,069,751
Accounts receivable and prepaid expenses (note 4) 412,521 1,279,935
Inventories (note 5) 72,856 108,788
------------------------------------------------------------- ----------- ------------
Total current assets 1,388,812 2,458,474
Non-current assets
Property, plant and equipment (note 6) 28,490,156 25,688,836
Long-term deposit (note 8) 470,040 513,960
Exploration and evaluation assets (note 7) 2,090,096 1,574,183
------------------------------------------------------------- ----------- ------------
Total non-current assets 31,050,292 27,776,979
------------------------------------------------------------- ----------- ------------
Total assets $ 32,439,104 $ 30,235,453
--------------------------------------------------------- ----------- ------------
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities (notes 9 and 17) $ 3,362,962 $ 3,013,999
Due to related parties (note 15) 1,377,697 124,317
Leases (note 11) 335,997 416,040
------------------------------------------------------------- ----------- ------------
Total current liabilities 5,076,656 3,554,356
Non-current liabilities
Non-current portion of financing facilities (note 10) 4,108,000 4,247,488
Due to related parties (note 15) 2,750,067 2,444,376
Decommissioning liability (note 8) 544,259 600,525
------------------------------------------------------------- ----------- ------------
Total non-current liabilities 7,402,326 7,292,389
------------------------------------------------------------- ----------- ------------
Total liabilities 12,478,982 10,846,745
------------------------------------------------------------- ----------- ------------
Equity
Share capital (note 12(a)(b)) 64,072,069 57,783,570
Reserves 12,714,264 15,435,369
Deficit (56,826,211) (53,830,231)
------------------------------------------------------------- ----------- ------------
Total equity 19,960,122 19,388,708
------------------------------------------------------------- ----------- ------------
Total equity and liabilities $ 32,439,104 $ 30,235,453
--------------------------------------------------------- ----------- ------------
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 17)
Events after the reporting period (note 18)
Condensed Interim Consolidated Statements of Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
------------------------------------------------ ---------- ---------- ---------- ----------
Revenues
Sales of concentrate (note 14) $ - $ - $ - $ -
Cost and expenses of operations
Cost of sales 66,995 61,333 113,634 107,481
Depreciation (note 6) 148,336 87,088 278,867 159,153
------------------------------------------------- ---------- ---------- ---------- ----------
215,331 148,421 392,501 266,634
------------------------------------------------ ---------- ---------- ---------- ----------
Loss before general administrative and other
expenses (215,331) (148,421) (392,501) (266,634)
------------------------------------------------- ---------- ---------- ---------- ----------
General administrative expenses
Management and administration wages (note 15) 148,105 81,951 265,745 226,034
Other operating expenses 113,170 39,835 191,958 72,415
Accounting and corporate 36,482 73,273 189,461 88,457
Legal and audit 66,088 31,464 129,728 80,637
Stock-based compensation (note 12(d)) 645,438 1,230,510 995,977 1,235,141
Shareholder communication and investor relations 134,734 116,888 270,521 176,741
Transfer agent 17,718 9,046 21,733 11,907
Director fees (note 15) 35,000 15,500 70,000 24,000
General office 14,888 7,770 36,075 11,339
Accretion expenses (notes 8, 10 and 15) 93,334 27,856 213,821 132,416
Loan interest and bank charges less deposit
interest (notes 10 and 15) 107,984 80,780 199,092 160,883
Financing costs - 1,004,182 - 1,004,182
------------------------------------------------- ---------- ---------- ---------- ----------
1,412,941 2,719,055 2,584,111 3,224,152
Other expenses
Foreign exchange (gain) loss (48,104) 21,092 19,368 37,745
------------------------------------------------- ---------- ---------- ---------- ----------
(48,104) 21,092 19,368 37,745
------------------------------------------------ ---------- ---------- ---------- ----------
Net loss for the period $ (1,580,168) $(2,888,568) $(2,995,980) $(3,528,531)
--------------------------------------------- ---------- ---------- ---------- ----------
Basic and diluted net loss per share (note
13) $ (0.02) $ (0.05) $ (0.04) $ (0.07)
--------------------------------------------- ---------- ---------- ---------- ----------
Weighted average number of common shares
outstanding - basic and diluted 84,140,878 60,494,975 81,353,664 53,501,436
------------------------------------------------- ---------- ---------- ---------- ----------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
Condensed Interim Consolidated Statements of Comprehensive
Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
------------------------------------------------ ---------- ---------- ---------- ----------
Net loss for the period $ (1,580,168) $(2,888,568) $(2,995,980) $(3,528,531)
Other comprehensive loss
Items that will be reclassified
subsequently to profit or loss
Exchange differences on translating foreign
operations (1,218,739) (198,369) (2,089,716) (295,294)
------------------------------------------------- ---------- ---------- ---------- ----------
Total comprehensive loss $ (2,798,907) $(3,086,937) $(5,085,696) $(3,823,825)
--------------------------------------------- ---------- ---------- ---------- ----------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
(Unaudited)
Six Months Ended
June 30,
2022 2021
---------------------------------------------------------------------- ---------- ----------
Operating activities
Net loss for the period $ (2,995,980) $(3,528,531)
Adjustment for:
Depreciation (note 6) 278,867 159,153
Stock-based compensation (note 12(d)) 995,977 1,235,141
Accrued interest (notes 10 and 15) 375,855 158,239
Foreign exchange (gain) loss (573,713) 344,243
Accretion expenses (notes 8, 10 and 15) 180,939 132,416
Financing costs - 1,004,182
Non-cash working capital items:
Accounts receivable and prepaid expenses 811,072 (168,600)
Inventories 34,717 (64,831)
Accounts payable and other liabilities 621,711 124,053
Due to related parties (16,255) (67,781)
----------------------------------------------------------------------- ---------- ----------
Net cash and cash equivalents used in by operating activities (286,810) (672,316)
----------------------------------------------------------------------- ---------- ----------
Investing activities
Net purchase of property, plant and equipment (4,891,767) (1,194,831)
Exploration and evaluation assets (650,437) (87,456)
Lease payments (note 11) (339,470) -
----------------------------------------------------------------------- ---------- ----------
Net cash and cash equivalents used in investing activities (5,881,674) (1,282,287)
----------------------------------------------------------------------- ---------- ----------
Financing activities
Proceeds of private placements (note 12(b)(i)) - 7,998,980
Share issue costs - (783,262)
Proceeds from exercise of warrants 4,610,133 330,000
Advances from related parties 1,465,792 -
Repayment of financing facilities - (23,802)
----------------------------------------------------------------------- ---------- ----------
Net cash and cash equivalents provided by financing activities 6,075,925 7,521,916
----------------------------------------------------------------------- ---------- ----------
Net change in cash and cash equivalents (92,559) 5,567,313
Effect of exchange rate changes on cash held in foreign currencies (73,757) (36,930)
Cash and cash equivalents, beginning of period 1,069,751 612,094
----------------------------------------------------------------------- ---------- ----------
Cash and cash equivalents, end of period $ 903,435 $ 6,142,477
------------------------------------------------------------------- ---------- ----------
Cash $ 903,435 $ 6,142,477
Cash equivalents - -
------------------------------------------------------------------- ---------- ----------
Cash and cash equivalents $ 903,435 $ 6,142,477
------------------------------------------------------------------- ---------- ----------
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
(Expressed in Canadian Dollars)
(Unaudited)
Reserves
---------------------------------------
Equity
settled Foreign
share-based currency
Share Warrants payments translation
capital reserve reserve reserve Deficit Total
------------------- ---------- ---------- ----------- ----------- ----------- ----------
Balance, December
31, 2020 $ 52,933,594 $ 340,000 $ 8,381,382 $ 1,012,739 $(48,545,800) $14,121,915
Shares issued in
private placement
(note 12(b)(i)) 7,998,980 - - - - 7,998,980
Warrants issued (note
12(b)(i)) (3,258,578) 3,258,578 - - - -
Warrants issued (note
10(i)) - 670,000 - - - 670,000
Share issue costs
(note 12(b)(i)) (792,045) 8,783 - - - (783,262)
Warrant extension
(note 15(a)(iii)) - 251,000 - - - 251,000
Stock-based
compensation (note
12(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
------------------- ---------- ---------- ----------- ----------- ----------- ----------
Balance, December
31, 2021 $ 57,783,570 $ 4,130,200 $ 10,417,260 $ 887,909 $(53,830,231) $19,388,708
Warrants issued (note
15(a)(iii)) - 51,000 - - - 51,000
Stock-based
compensation (note
12(d)) - - 995,977 - - 995,977
Exercise of warrants 6,288,499 (1,678,366) - - - 4,610,133
Exchange differences
on translating
foreign
operations - - - (2,089,716) - (2,089,716)
Net loss for the
period - - - - (2,995,980) (2,995,980)
----------------------- ---------- ---------- ----------- ----------- ----------- ----------
Balance, June 30,
2022 $ 64,072,069 $ 2,502,834 $ 11,413,237 $ (1,201,807) $(56,826,211) $19,960,122
------------------- ---------- ---------- ----------- ----------- ----------- ----------
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 and further financing currently being negotiated.
The management's 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 UK
Ltd. ("Ocean Partners") loans have now been extended to December
31, 2023 (see notes 10 and 15). During the year ended December 31,
2021, the Company 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. During the
six months ended June 30, 2022, the Company raised gross proceeds
of $4.6M through the exercise of warrants. 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, 2022, the Company had a deficit of $56,826,211
(December 31, 2021 - $53,830,231). Comprehensive loss for the six
months ended June 30, 2022 was $5,085,696 (six months ended June
30, 2021 - $3,823,825). 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's common shares started
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
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 25, 2022 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, 2021. Any subsequent changes to IFRS that are
given effect in the Company's annual consolidated financial
statements for the year ending December 31, 2022 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,
2022 2021
-------------------------------------------------- -------- ------------
Sales tax receivable - Canada $ 12,588 $ 4,471
Valued added tax receivable - Northern Ireland 240,526 239,774
Accounts receivable 50,529 594,071
Prepaid expenses 108,878 281,207
Other debtors - 160,412
--------------------------------------------------- -------- ------------
$ 412,521 $ 1,279,935
-------------------------------------------------- -------- ------------
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,
2022 2021
----------------------------- -------- ------------
Less than 3 months $ 253,114 $ 884,550
3 to 12 months 42,617 105,526
More than 12 months 7,912 8,652
------------------------------ -------- ------------
Total accounts receivable $ 303,643 $ 998,728
-------------------------- -------- ------------
5. Inventories
As at As at
June 30, December 31,
2022 2021
--------------------------- -------- ------------
Concentrate inventories $ 72,856 $ 108,788
------------------------ -------- ------------
6. Property, Plant and Equipment
Freehold Plant
land and and Motor Office Development Assets under
machinery
Cost buildings (i) vehicles equipment assets (ii) construction Total
------------ --------- --------- -------- --------- ----------- ------------ ----------
Balance,
December
31, 2020 $2,398,171 $6,951,208 $ 162,571 $ 191,422 $ 19,345,676 $ - $29,049,048
Additions - 1,263,168 38,975 27,973 4,898,703 556,273 6,785,092
Disposals - (6,289) - - - - (6,289)
Cash
receipts
from
concentrate
sales - - - - (1,412,329) - (1,412,329)
Foreign
exchange
adjustment (34,357) (99,099) (2,329) (2,742) (270,376) - (408,903)
------------ --------- --------- -------- --------- ----------- ------------ ----------
Balance,
December
31, 2021 2,363,814 8,108,988 199,217 216,653 22,561,674 556,273 34,006,619
Additions - 969,503 15,037 9,233 4,704,518 - 5,698,291
Disposals - - - - - (535,784) (535,784)
Foreign
exchange
adjustment (201,998) (690,057) (17,024) (18,514) (1,856,288) (20,489) (2,804,370)
------------ --------- --------- -------- --------- ----------- ------------ ----------
Balance,
June 30,
2022 $2,161,816 $8,388,434 $ 197,230 $ 207,372 $ 25,409,904 $ - $36,364,756
------------ --------- --------- -------- --------- ----------- ------------ ----------
Freehold Plant
land and and Motor Office Development Assets under
Accumulated
depreciation buildings machinery vehicles equipment assets construction Total
------------- --------- ----- --------- -------- --------- ----------- ------------ ---------
Balance,
December 31,
2020 $1,986,461 $ 5,648,586 $ 130,107 $ 125,791 $ - $ - $7,890,945
Depreciation 6,347 507,731 19,776 13,992 - - 547,846
Disposals - (4,801) - - - - (4,801)
Foreign
exchange
adjustment (28,499) (83,818) (1,995) (1,895) - - (116,207)
------------- --------- ----- --------- -------- --------- ----------- ------------ ---------
Balance,
December 31,
2021 1,964,309 6,067,698 147,888 137,888 - - 8,317,783
Depreciation 2,368 262,644 7,863 5,992 - - 278,867
Foreign
exchange
adjustment (167,977) (528,952) (13,035) (12,086) - - (722,050)
------------- --------- ----- --------- -------- --------- ----------- ------------ ---------
Balance, June
30, 2022 $1,798,700 $ 5,801,390 $ 142,716 $ 131,794 $ - $ - $7,874,600
------------- --------- ----- --------- -------- --------- ----------- ------------ ---------
Freehold Plant
land and and Motor Office Development Assets under
Carrying
value buildings machinery vehicles equipment assets construction Total
--------- --------- --------- -------- --------- ----------- ------------ ----------
Balance,
December
31, 2021 $ 399,505 $2,041,290 $ 51,329 $ 78,765 $ 22,561,674 $ 556,273 $25,688,836
--------- --------- --------- -------- --------- ----------- ------------ ----------
Balance,
June 30,
2022 $ 363,116 $2,587,044 $ 54,514 $ 75,578 $ 25,409,904 $ - $28,490,156
--------- --------- --------- -------- --------- ----------- ------------ ----------
(i) Right-of-use assets of $680,520 is included in additions of
the plant and machinery for the year ended December 31, 2021.
Right-of-use assets of $270,740 is included in additions of the
plant and machinery for the six months ended June 30, 2022.
(ii) Development assets are expenditures for the underground
mining operations in Omagh.
7. Exploration and Evaluation Assets
Exploration
and
evaluation
Cost assets
---------------------------- -----------
Balance, December 31, 2020 $ 750,741
Additions 834,193
Foreign exchange adjustment (10,751)
---------------------------- -----------
Balance, December 31, 2021 1,574,183
Additions 650,437
Foreign exchange adjustment (134,524)
---------------------------- -----------
Balance, June 30, 2022 $ 2,090,096
---------------------------- -----------
Carrying value
---------------------------- -----------
Balance, December 31, 2021 $ 1,574,183
---------------------------- -----------
Balance, June 30, 2022 $ 2,090,096
---------------------------- -----------
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, 2022 based on a
risk-free discount rate of 1% (December 31, 2021 - 1%) and an
inflation rate of 1.50% (December 31, 2021 - 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, 2022,
the estimated fair value of the liability is $544,259 (December 31,
2021 - $600,525). Changes in the provision during the six months
ended June 30, 2022 are as follows:
As at As at
June 30, December 31,
2022 2021
-------------------------------------------------- -------- ------------
Decommissioning liability, beginning of period $ 600,525 $ 598,275
Accretion 5,211 10,892
Foreign exchange (61,477) (8,642)
--------------------------------------------------- -------- ------------
Decommissioning liability, end of period $ 544,259 $ 600,525
----------------------------------------------- -------- ------------
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, 2021 - GBP
300,000), of which GBP 300,000 was funded as of June 30, 2022 (GBP
300,000 was funded as of December 31, 2021) and reported as
long-term deposit of $470,040 (December 31, 2021 - $513,960).
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,
2022 2021
------------------------------------------------ --------- ------------
Accounts payable $ 2,168,056 $ 1,463,316
Accrued liabilities 1,194,906 1,550,683
------------------------------------------------- --------- ------------
Total accounts payable and other liabilities $ 3,362,962 $ 3,013,999
--------------------------------------------- --------- ------------
The following is an aged analysis of the accounts payable and
other liabilities:
As at As at
June 30, December 31,
2022 2021
------------------------------------------------ --------- ------------
Less than 3 months $ 2,518,766 $ 2,246,440
3 to 12 months 227,225 98,415
12 to 24 months 5,001 -
More than 24 months 603,747 669,144
------------------------------------------------- --------- ------------
Total accounts payable and other liabilities $ 3,362,962 $ 3,013,999
--------------------------------------------- --------- ------------
10. Financing Facilities
Amounts payable on the Company's financial facilities are as
follow:
As at As at
June 30, December 31,
2022 2021
-------------------------------------------------------------- --------- ------------
Ocean Partners
Financing facilities, beginning of period $ - $ 2,186,272
Repayment of financing facilities - (23,802)
Accretion - 126,949
Interest - 86,820
Foreign exchange adjustment - 200,898
Financing facility reallocated to due to related parties - (2,577,137)
--------------------------------------------------------------- --------- ------------
- -
----------------------------------------------------------- --------- ------------
G&F Phelps
Financing facility, beginning of period 4,247,488 -
Financing facility reallocated from due to related parties - 4,578,039
Less bonus warrants issued (i) - (670,000)
Accretion 129,678 151,290
Interest 194,973 164,197
Foreign exchange adjustment (464,135) 23,962
--------------------------------------------------------------- --------- ------------
4,108,004 4,247,488
-------------------------------------------------------------- --------- ------------
Financing facilities - non-current portion $ 4,108,004 $ 4,247,488
----------------------------------------------------------- --------- ------------
(i) During the six months ended June 30, 2021, the maturity date
of the G&F Phelps loan was 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 received 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.
11. Leases
Balance, December 31, 2020 $ -
Addition (i) 680,520
Interest expense 36,706
Lease payments (297,450)
Foreign exchange (3,736)
------------------------------- --------
Balance, December 31, 2021 416,040
Addition (ii) 270,740
Interest expense 18,133
Lease payments (339,470)
Foreign exchange (29,446)
------------------------------- --------
Balance, June 30, 2022 $ 335,997
--------------------------- --------
(i) During the year ended 2021, the Company entered into lease
agreements in respect to rent of equipments which will expire
between February 2022 to July 2022.
(ii) During the six months ended June 30, 2022, the Company
entered into lease agreements in respect to rent of equipments, all
of which will expire July 2022 with the exception of a Scissors
lift which will continue for a further 12 months.
12. Share Capital and Reserves
a) Authorized share capital
At June 30, 2022, 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, 2022, the issued share capital amounted to
$64,072,069. The continuity of issued share capital for the periods
presented is as follows:
Number of
common
shares Amount
--------------------------------------- ---------- ----------
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
---------------------------------------- ---------- ----------
Balance, December 31, 2021 74,683,801 $57,783,570
Exercise of warrants 11,686,333 6,288,499
---------------------------------------- ---------- ----------
Balance, June 30, 2022 86,370,134 $64,072,069
---------------------------------------- ---------- ----------
(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.
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, 2020 1,700,000 $ 0.33
Issued (notes 10(i), 12(b)(i) and 15(a)(iii)) 28,404,931 0.40
Expired (1,000,000) 0.33
----------------------------------------------- ----------- --------
Balance, June 30, 2021 29,104,931 $ 0.39
----------------------------------------------- ----------- --------
Balance, December 31, 2021 28,691,598 $ 0.39
Issued (notes 15(a)(iii)) 250,000 0.50
Exercised (11,686,333) 0.39
----------------------------------------------- ----------- --------
Balance, June 30, 2022 17,255,265 $ 0.40
----------------------------------------------- ----------- --------
The following table reflects the actual warrants issued and
outstanding as of June 30, 2022:
Grant date Exercise
Number fair value price
Expiry date of warrants ($) ($)
----------------------------------- ----------- ---------- --------
February 3, 2023 250,000 51,000 0.50
May 14, 2023 (notes 15(a)(iii)(1)) 15,525,265 1,901,069 0.40
December 31, 2023 1,480,000 550,765 0.33
------------------------------------ ----------- ---------- --------
17,255,265 2,502,834 0.40
----------------------------------- ----------- ---------- --------
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, 2020 570,000 $ 1.16
Granted (i)(ii) 4,340,000 0.85
---------------------------- --------- --------
Balance, June 30, 2021 4,910,000 $ 0.88
---------------------------- --------- --------
Weighted
average
Number of exercise
options price
--------------------------- --------- --------
Balance, December 31, 2021 4,885,000 $ 0.88
Granted (iii) 1,742,500 0.60
Expired (255,000) 1.35
Cancelled (205,000) 0.96
---------------------------- --------- --------
Balance, June 30, 2022 6,167,500 $ 0.85
---------------------------- --------- --------
(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, 2022, included in stock-based compensation is
$241,587 and $557,975, 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 six months ended
June 30, 2022, included in stock-based compensation is $30,973 and
$63,768, respectively related to the vested portion of these
options.
(iii) On May 3, 2022, the Company granted 1,742,500 stock
options to directors, officers, employees and consultants of the
Company to purchase common shares at $0.60 per share until May 3,
2027. The options will vest as to one third immediately and one
third on each of May 3, 2023 and May 3, 2024. The fair value
attributed to these options was $900,000 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, 2022, included in stock-based
compensation is $371,507 related to the vested portion of these
options.
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, 2022, amounted to $1,371 and $22,727, respectively (three
and six months ended June 30, 2021 - $1,230,510 and $1,235,141,
respectively).
The following table reflects the actual stock options issued and
outstanding as of June 30, 2022:
Weighted average Number of
remaining Number of options Number of
Exercise contractual options vested options
Expiry date price ($) life (years) outstanding (exercisable) unvested
------------------ --------- ---------------- ----------- ------------- ---------
April 19, 2023 1.10 0.80 25,000 25,000 -
February 13, 2024 0.90 1.62 85,000 85,000 -
June 27, 2024 0.90 1.99 100,000 100,000 -
May 19, 2026 0.86 3.89 3,770,000 2,513,333 1,256,667
June 21, 2026 0.73 3.98 425,000 283,333 141,667
August 27, 2026 0.86 4.16 20,000 6,667 13,333
May 3, 2023 0.60 4.84 1,742,500 580,833 1,161,667
------------------ --------- ---------------- ----------- ------------- ---------
0.78 4.09 6,167,500 3,594,166 2,573,334
------------------ --------- ---------------- ----------- ------------- ---------
13. Net Loss per Common Share
The calculation of basic and diluted loss per share for the
three and six months ended June 30, 2022 was based on the loss
attributable to common shareholders of $1,580,168 and $2,995,980,
respectively (three and six months ended June 30, 2021 - $2,888,568
and $3,528,531, respectively) and the weighted average number of
common shares outstanding of 84,140,878 and 81,353,664,
respectively (three and six months ended June 30, 2021 - 60,494,975
and 53,501,436, respectively) for basic and diluted loss per share.
Diluted loss did not include the effect of 17,255,265 warrants
(three and six months ended June 30, 2021 - 29,104,931) and
6,167,500 options (three and six months ended June 30, 2021 -
4,910,000) for the three and six months ended June 30, 2022, as
they are anti-dilutive.
14. Revenues
Shipments of concentrate under the off-take arrangements
commenced during the second quarter of 2019. Concentrate sales
provisional revenues during the three and six months ended June 30,
2022 totaled approximately US$nil and US$219,000, respectively
(three and six months ended June 30, 2021 - US$218,000 and
US$785,000, respectively). However, until the mine reaches the
commencement of commercial production, the net proceeds from
concentrate sales will be offset against Development assets.
15. 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 exchange amount 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,
2022 2021 2022 2021
---------------------------------------- --------- -------- -------- -------
Interest on related party loans (i) $ 88,054 $ 39,660 $ 162,749 $118,536
-------------------------------- ---- --------- -------- -------- -------
(i) Refer to note 10(i).
(ii) Refer to note 12(b)(i).
(iii) On February 3, 2022, the Company announced the closing of
the loan agreement for US$1.06 million with Ocean Partners. Ocean
Partners and the Company have a common director. Terms of the loan
agreement are:
-- The loan matures on July 31, 2022 (the "Maturity Date").
-- The loan will bear interest at an annual rate of 10%
compounded monthly payable upon repayment of the loan.
-- US$20,000 structuring fee has been paid to Ocean Partners.
-- US$40,000 consulting fee will be paid to Ocean Partners, to
be invoiced separately by Ocean Partners.
-- 250,000 warrants have been granted to Ocean Partners, which
will be exercisable for a period of 12 months at an exercise price
of $0.50. The bonus warrants are subject to a hold period under
applicable securities laws and the rules of the TSXV, expiring on
June 4, 2022. The fair value of the 250,000 warrants was valued at
$51,000 using the following Black-Scholes option pricing model with
the following assumptions: expected dividend yield - 0%, expected
volatility - 107%, risk-free interest rate - 1.22% and an expected
average life of 1 year.
-- US$40,000 extension fee will be paid to Ocean Partners if the
Company elects to extend the loan for a further six months from the
Maturity Date.
Proceeds from the loan will be used for further development of
the Omagh mine in Northern Ireland and working capital.
As at June 30, 2022, financial liabilities due to the Lender and
recorded as due to related parties on the unaudited condensed
interim consolidated statement of financial position is $4,029,998
(December 31, 2021 - $2,444,376).
June 30, December 31,
2022 2021
------------------------------------------------------------ ---------- ------------
Balance, beginning of period $ 2,444,376 $ -
Financing facility reallocated to due to related parties - 2,577,137
Loan received 1,380,477 -
Less bonus warrants (1) (51,000) (251,000)
Repayment (5,979) -
Accretion 48,580 57,338
Interest 162,749 27,506
Foreign exchange adjustment 50,795 33,395
------------------------------------------------------------- ---------- ------------
Balance, end of period 4,029,998 2,444,376
Less current balance (1,279,932) -
------------------------------------------------------------- ---------- ------------
Due to related parties - non-current balance $ 2,750,066 $ 2,444,376
--------------------------------------------------------- ---------- ------------
(1) During the six months ended June 30, 2022, 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.
(b) Remuneration of officer and directors of the Company was as
follows:
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
----------------------------- --------- -------- -------- -------
Salaries and benefits (1) $ 145,551 $ 50,380 $ 253,134 $167,986
Stock-based compensation 383,377 828,180 633,687 830,438
------------------------------ --------- -------- -------- -------
$ 528,928 $ 878,560 $ 886,821 $998,424
----------------------------- --------- -------- -------- -------
(1) Salaries and benefits include director fees. As at June 30,
2022, due to directors for fees amounted to $70,000 (December 31,
2021 - $102,917) and due to officers, mainly for salaries and
benefits accrued amounted to $27,766 (December 31, 2021 - $21,400),
and is included with due to related parties.
(c) As at June 30, 2022, Ross Beaty owns 3,744,747 common shares
of the Company or approximately 4.3% of the outstanding common
shares. Premier Miton owns 4,848,243 common shares of the Company
or approximately 5.6%. Melquart owns, directly and indirectly,
24,473,528 common shares of the Company or approximately 29.5% of
the outstanding common shares of the Company. G&F Phelps owns
5,354,484 common shares of the Company or approximately 6.2%. Eric
Sprott owns 8,833,333 common shares of the Company or approximately
10.2%. Mike Gentile owns 6,100,000 common shares of the Company or
approximately 7.1%. The remaining 37.1% 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.
16. 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, 2022 United Kingdom Canada Total
------------------- -------------- ------- ----------
Current assets $ 880,194 $508,618 $ 1,388,812
Non-current assets $ 30,921,720 $128,572 $31,050,292
Revenues $ - $ - $ -
------------------- -------------- ------- ----------
December 31, 2021 United Kingdom Canada Total
------------------- -------------- --------- ----------
Current assets $ 1,379,742 $1,078,732 $ 2,458,474
Non-current assets $ 27,714,667 $ 62,312 $27,776,979
Revenues $ - $ - $ -
------------------- -------------- --------- ----------
17. 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 $476,762 (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 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.
18. Events After the Reporting Period
(i) On July 11, 2022, the Company announced the appointment of
SP Angel Corporate Finance LLP as its Joint Broker to support its
position as an AIM-quoted company.
(ii) On August 3, 2022, the Company announced the closing of the
loan agreement for US$530,000 with Ocean Partners. Terms of the
loan agreement are:
-- The loan matures on January 31, 2023.
-- The loan will bear interest at an annual rate of 12%
compounded monthly and repayable in full on the maturity date.
-- US$10,000 commitment fee has been paid to Ocean Partners.
-- 125,000 warrants have been granted to Ocean Partners, which
will be exercisable for a period of 12 months at an exercise price
of $0.48. The warrants are subject to a hold period under
applicable securities laws and the rules of the TSXV, expiring on
July 25, 2023.
-- US$20,000 extension fee will be paid to Ocean Partners if the
Company elects to extend the loan for a further six months from the
maturity date.
(iii) On August 8, 2022, the Company announced that it entered
into an agreement with Canaccord Genuity Corp., on behalf of itself
and and a syndicate of agents including Cormark Securities Inc. and
Research Capital Corporation (together, the "Agents"), in
connection with a proposed private placement of up to 8,888,890
units of the Company at a price of $0.45 per unit for aggregate
gross proceeds of up to approximately $4 million. Each unit will be
comprised of one common share in the capital of the Company and
one_half of one common share purchase warrant of the Company. Each
warrant will entitle the holder thereof to purchase one common
share in the capital of the Company at a price of $0.55 per warrant
share for a period of 30 months following the closing of the
offering.
(iv) On August 11, 2022, the Company announced that it entered
into an amending agreement with the Agents, to increase the size of
the Company's previously announced proposed private placement of up
to 13,333,340 units of the Company.
The Company also granted the Agents an option, exercisable, in
whole or in part, at any time up to 48 hours prior to closing of
the offering, which will allow the Agents to sell up to an
additional 2,000,001 units at the offering price.
The upsized offering is expected to close on or about August 30,
2022, or such other date as the Company and the Agents may agree,
and is subject to certain closing conditions including, but not
limited to, the receipt of all necessary approvals, including the
conditional acceptance of the TSXV.
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END
IR FLFLATIIEFIF
(END) Dow Jones Newswires
August 26, 2022 02:00 ET (06:00 GMT)
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