TIDMGAL
RNS Number : 0041I
Galantas Gold Corporation
30 November 2022
GALANTAS REPORTS FINANCIAL RESULTS FOR THE QUARTERED SEPTEMBER
30, 2022
November 30, 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 ended
September 30, 2022.
Financial Highlights
Highlights of the third quarter 2022 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
2022 2021 2022 2021
Revenue $ 0 $ 0 $ 0 $ 0
Cost and expenses of operations $ (86,442) $ (74,462) $ (200,076) $ (181,943)
Loss before the undernoted $ (86,442) $ (74,462) $ (200,076) $ (181,943)
Depreciation $ (196,178) $ (89,151) $ (475,045) $ (248,304)
General administrative expenses $ (1 , 179,927) $ (914,174) $(3,764,038) $ (4,138,326)
Foreign exchange (loss) $ (93,277) $ (95,489) $ (112,645) $ (133,234)
Net Loss for the period $ (1,555,824) $ (1,173,276) $(4,551,804) $ (4,701,807)
Working Capital (Deficit) / Surplus $ (714,865) $ 2,454,581 $ (714,865) $ 2,454,581
Cash (loss) from operating activities before changes
in non-cash working capital $ (324,827) $ (419,009) $ (3,003,660) $ (1,116,243)
Cash at September 30, 2022 $ 3,567,196 $ 3,881,674 $ 3,567,196 $ 3,881,674
Sales revenue for the quarter ended September 30, 2022 amounted
to $Nil compared to revenue of $Nil for the quarter ended September
30, 2021. Shipments of concentrate commenced during the third
quarter of 2019. Concentrate sales provisional revenues totalled
US$183,000 for the third quarter of 2022 compared to US$329,000 for
the third 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 September 30, 2022 amounted
to $ 1,555,824 (2021: $1,173,276) and the cash loss from operating
activities before changes in non-cash working capital for the
quarter ended September 30, 2022 amounted to $(3,003,660 (2021:
($1,116,243)). The difference in the net loss for Q3 2022 versus Q3
2021 is mainly due to changes in the amount of accretion expenses
and loan interest costs between the quarters. The difference in the
cash loss for the nine months ending September 30 2022 and the
prior period results from adjustments for foreign exchange and
prior year financing costs.
The Company had a cash balance of $3,567,196 at September 30,
2022 compared to $3,881,674 at September 30, 2021. The working
capital deficit at September 30, 2022 amounted to $714,865 compared
to a working capital surplus of $2,454,581 at September 30,
2021.
Click on, or paste the following link into your web browser, to
view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/0041I_1-2022-11-30.pdf
Qualified Person
The financial components of this disclosure has been reviewed by
Alan Buckley (Chief Financial Officer) and the production and
permitting components by Brendan Morris (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.
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, Samuel
Littler
Telephone: +44(0)20 7383 5100
SP Angel Corporate Finance LLP (AIM 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 Nine Months Ended September 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.
As at As at
September 30, December 31,
2022 2021
------------------------------------------------------------ ------------- ------------
ASSETS
Current assets
Cash and cash equivalents $ 3,567,196 $ 1,069,751
Accounts receivable and prepaid expenses (note 4) 1,845,390 1,279,935
Inventories (note 5) 32,763 108,788
------------------------------------------------------------- ------------- ------------
Total current assets 5,445,349 2,458,474
Non-current assets
Property, plant and equipment (note 6) 29,657,790 25,688,836
Long-term deposit (note 8) 452,940 513,960
Exploration and evaluation assets (note 7) 2,281,115 1,574,183
------------------------------------------------------------- ------------- ------------
Total non-current assets 32,391,845 27,776,979
------------------------------------------------------------- ------------- ------------
Total assets $ 37,837,194 $ 30,235,453
--------------------------------------------------------- ------------- ------------
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities (notes 9 and 17) $ 3,672,456 $ 3,013,999
Due to related parties (note 15) 2,487,758 124,317
Leases (note 11) - 416,040
------------------------------------------------------------- ------------- ------------
Total current liabilities 6,160,214 3,554,356
Non-current liabilities
Non-current portion of financing facilities (note 10) 4,120,767 4,247,488
Due to related parties (note 15) 2,695,201 2,444,376
Decommissioning liability (note 8) 536,379 600,525
------------------------------------------------------------- ------------- ------------
Total non-current liabilities 7,352,347 7,292,389
------------------------------------------------------------- ------------- ------------
Total liabilities 13,512,561 10,846,745
------------------------------------------------------------- ------------- ------------
Equity
Share capital (note 12(a)(b)) 68,649,647 57,783,570
Reserves 14,057,021 15,435,369
Deficit (58,382,035) (53,830,231)
------------------------------------------------------------- ------------- ------------
Total equity 24,324,633 19,388,708
------------------------------------------------------------- ------------- ------------
Total equity and liabilities $ 37,837,194 $ 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)
Event after the reporting period (note 18)
Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
------------------------------------------------ ---------- ---------- ---------- ----------
Revenues
Sales of concentrate (note 14) $ - $ - $ - $ -
Cost and expenses of operations
Cost of sales 86,442 74,462 200,076 181,943
Depreciation (note 6) 196,178 89,151 475,045 248,304
------------------------------------------------- ---------- ---------- ---------- ----------
282,620 163,613 675,121 430,247
------------------------------------------------ ---------- ---------- ---------- ----------
Loss before general administrative and other
expenses (282,620) (163,613) (675,121) (430,247)
------------------------------------------------- ---------- ---------- ---------- ----------
General administrative expenses
Management and administration wages (note 15) 220,289 112,997 486,034 339,031
Other operating expenses 66,676 65,327 258,634 137,742
Accounting and corporate 33,705 48,891 223,166 137,348
Legal and audit 70,190 32,487 199,918 113,124
Stock-based compensation (note 12(d)) 236,623 404,064 1,232,600 1,639,205
Shareholder communication and investor relations 128,889 133,522 399,410 310,263
Transfer agent 17,394 3,084 39,127 14,991
Director fees (note 15) 35,000 19,500 105,000 43,500
General office 13,468 8,648 49,543 19,987
Accretion expenses (notes 8, 10 and 15) 138,144 2,742 351,965 135,158
Loan interest and bank charges less deposit
interest (notes 10 and 15) 219,549 82,912 418,641 243,795
Financing costs - - - 1,004,182
------------------------------------------------- ---------- ---------- ---------- ----------
1,179,927 914,174 3,764,038 4,138,326
Other expenses
Foreign exchange loss 93,277 102,648 112,645 140,393
Gain on disposal of property, plant and
equipment - (7,159) - (7,159)
------------------------------------------------- ---------- ---------- ---------- ----------
93,277 95,489 112,645 133,234
------------------------------------------------ ---------- ---------- ---------- ----------
Net loss for the period $ (1,555,824) $(1,173,276) $(4,551,804) $(4,701,807)
--------------------------------------------- ---------- ---------- ---------- ----------
Basic and diluted net loss per share (note
13) $ (0.02) $ (0.02) $ (0.05) $ (0.08)
--------------------------------------------- ---------- ---------- ---------- ----------
Weighted average number of common shares
outstanding - basic and diluted 92,115,467 74,488,086 84,788,729 60,565,996
------------------------------------------------- ---------- ---------- ---------- ----------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
------------------------------------------------ ---------- ---------- ---------- ----------
Net loss for the period $ (1,555,824) $(1,173,276) $(4,551,804) $(4,701,807)
Other comprehensive loss
Items that will be reclassified subsequently
to profit or loss
Exchange differences on translating foreign
operations (1,101,693) 30,489 (3,191,409) (264,805)
------------------------------------------------- ---------- ---------- ---------- ----------
Total comprehensive loss $ (2,657,517) $(1,142,787) $(7,743,213) $(4,966,612)
--------------------------------------------- ---------- ---------- ---------- ----------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
Nine Months Ended
September 30,
2022 2021
---------------------------------------------------------------------- ---------- ----------
Operating activities
Net loss for the period $ (4,551,804) $(4,701,807)
Adjustment for:
Depreciation (note 6) 475,045 248,304
Stock-based compensation (note 12(d)) 1,232,600 1,639,205
Accrued interest (notes 10 and 15) 704,919 158,404
Foreign exchange (gain) loss (1,139,442) 407,470
Accretion expenses (notes 8, 10 and 15) 275,022 135,158
Financing costs - 1,004,182
Gain on disposal of property, plant and equipment - (7,159)
Non-cash working capital items:
Accounts receivable and prepaid expenses 346,959 (415,954)
Inventories 71,611 (3,129)
Accounts payable and other liabilities 1,068,811 137,074
Due to related parties 246,714 75,638
----------------------------------------------------------------------- ---------- ----------
Net cash and cash equivalents used in by operating activities (1,269,565) (1,322,614)
----------------------------------------------------------------------- ---------- ----------
Investing activities
Net purchase of property, plant and equipment (7,065,758) (2,696,746)
Proceeds from sale of property, plant and equipment - 8,561
Exploration and evaluation assets (893,830) (402,702)
Lease payments (note 11) (668,534) -
----------------------------------------------------------------------- ---------- ----------
Net cash and cash equivalents used in investing activities (8,628,122) (3,090,887)
----------------------------------------------------------------------- ---------- ----------
Financing activities
Proceeds of private placements (note 12(b)(i)) 5,900,003 7,998,980
Share issue costs (601,932) (775,137)
Proceeds from exercise of warrants 5,074,467 495,333
Advances from related parties 2,044,133 -
Repayment of financing facilities - (23,802)
----------------------------------------------------------------------- ---------- ----------
Net cash and cash equivalents provided by financing activities 12,416,671 7,695,374
----------------------------------------------------------------------- ---------- ----------
Net change in cash and cash equivalents 2,518,984 3,281,873
Effect of exchange rate changes on cash held in foreign currencies (21,539) (12,293)
Cash and cash equivalents, beginning of period 1,069,751 612,094
----------------------------------------------------------------------- ---------- ----------
Cash and cash equivalents, end of period $ 3,567,196 $ 3,881,674
------------------------------------------------------------------- ---------- ----------
Cash $ 3,567,196 $ 3,881,674
Cash equivalents - -
------------------------------------------------------------------- ---------- ----------
Cash and cash equivalents $ 3,567,196 $ 3,881,674
------------------------------------------------------------------- ---------- ----------
The notes to the unaudited condensed interim consolidated
financial statements are an integral part of these statements.
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)) (783,920) 8,783 - - - (775,137)
Warrant extension
(note 15(a)(iii)) - 251,000 - - - 251,000
Stock-based
compensation (note
12(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
------------------- ---------- ---------- ----------- ----------- ----------- ----------
Balance, December
31, 2021 $ 57,783,570 $ 4,130,200 $ 10,417,260 $ 887,909 $(53,830,231) $19,388,708
Shares issued in
private placement
(note 12(b)(ii)) 5,900,003 - - - - 5,900,003
Shares issued for
services arrangement
(note 12(b)(ii)) 1,000,000 - - - - 1,000,000
Warrants issued (note
12(b)(ii)) (2,320,000) 2,320,000 - - - -
Warrants issued (note
15(a)(iii)) - 74,000 - - - 74,000
Share issue costs
(note 12(b)(ii)) (813,932) 212,000 - - - (601,932)
Stock-based
compensation (note
12(d)) - - 1,232,600 - - 1,232,600
Exercise of warrants 7,100,006 (2,025,539) - - - 5,074,467
Exchange differences
on translating
foreign operations - - - (3,191,409) - (3,191,409)
Net loss for the
period - - - - (4,551,804) (4,551,804)
----------------------- ---------- ---------- ----------- ----------- ----------- ----------
Balance, September
30, 2022 $ 68,649,647 $ 4,710,661 $ 11,649,860 $ (2,303,500) $(58,382,035) $24,324,633
------------------- ---------- ---------- ----------- ----------- ----------- ----------
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
nine months ended September 30, 2022, the Company raised gross
proceeds of $11M through the issuance of shares to investors and
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 September 30, 2022, the Company had a deficit of
$58,382,035 (December 31, 2021 - $53,830,231). Comprehensive loss
for the nine months ended September 30, 2022 was $7,743,213 (nine
months ended September 30, 2021 - $4,966,612). 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 November 29, 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
September 30, December 31,
2022 2021
-------------------------------------------------- ------------- ------------
Sales tax receivable - Canada $ 22,824 $ 4,471
Valued added tax receivable - Northern Ireland 256,917 239,774
Accounts receivable 181,975 594,071
Prepaid expenses 1,383,674 281,207
Other debtors - 160,412
--------------------------------------------------- ------------- ------------
$ 1,845,390 $ 1,279,935
-------------------------------------------------- ------------- ------------
Prepaid expenses includes advances for consumables and for
construction of the passing bays in the Omagh mine. Prepaid
expenses includes also $1,000,000 pursuant to services agreement as
disclosed in note 12(b)(ii).
The following is an aged analysis of receivables:
As at As at
September 30, December 31,
2022 2021
----------------------------- ------------- ------------
Less than 3 months $ 402,551 $ 884,550
3 to 12 months 51,540 105,526
More than 12 months 7,625 8,652
------------------------------ ------------- ------------
Total accounts receivable $ 461,716 $ 998,728
-------------------------- ------------- ------------
5. Inventories
As at As at
September 30, December 31,
2022 2021
--------------------------- ------------- ------------
Concentrate inventories $ 32,763 $ 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 - 942,979 24,454 8,897 7,434,667 - 8,410,997
Disposals - - - - - (523,478) (523,478)
Cash receipts
from
concentrate
sales - - - - (551,021) - (551,021)
Foreign
exchange
adjustment (280,644) (958,727) (23,652) (25,722) (2,584,864) (32,795) (3,906,404)
------------- --------- --------- -------- --------- ----------- ------------ ----------
Balance,
September
30, 2022 $2,083,170 $8,093,240 $ 200,019 $ 199,828 $ 26,860,456 $ - $37,436,713
------------- --------- --------- -------- --------- ----------- ------------ ----------
Accumulated
depreciation
------------- --------- --------- -------- --------- ----------- ------------ ----------
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 3,384 439,277 22,977 9,407 - - 475,045
Foreign
exchange
adjustment (233,428) (744,490) (19,018) (16,969) - - (1,013,905)
------------- --------- --------- -------- --------- ----------- ------------ ----------
Balance,
September
30, 2022 $1,734,265 $5,762,485 $ 151,847 $ 130,326 $ - $ - $ 7,778,923
------------- --------- --------- -------- --------- ----------- ------------ ----------
Carrying
value
------------- --------- --------- -------- --------- ----------- ------------ ----------
Balance,
December 31,
2021 $ 399,505 $2,041,290 $ 51,329 $ 78,765 $ 22,561,674 $ 556,273 $25,688,836
------------- --------- --------- -------- --------- ----------- ------------ ----------
Balance,
September
30, 2022 $ 348,905 $2,330,755 $ 48,172 $ 69,502 $ 26,860,456 $ - $29,657,790
------------- --------- --------- -------- --------- ----------- ------------ ----------
(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 nine months ended September 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 893,830
Foreign exchange adjustment (186,898)
---------------------------- -----------
Balance, September 30, 2022 $ 2,281,115
---------------------------- -----------
Carrying value
---------------------------- -----------
Balance, December 31, 2021 $ 1,574,183
---------------------------- -----------
Balance, September 30, 2022 $ 2,281,115
---------------------------- -----------
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, 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 September 30,
2022, the estimated fair value of the liability is $536,379
(December 31, 2021 - $600,525). Changes in the provision during the
nine months ended September 30, 2022 are as follows:
As at As at
September 30, December 31,
2022 2021
-------------------------------------------------- ------------- ------------
Decommissioning liability, beginning of period $ 600,525 $ 598,275
Accretion 7,635 10,892
Foreign exchange (71,781) (8,642)
--------------------------------------------------- ------------- ------------
Decommissioning liability, end of period $ 536,379 $ 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 September 30, 2022
(GBP 300,000 was funded as of December 31, 2021) and reported as
long-term deposit of $452,940 (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
September 30, December 31,
2022 2021
------------------------------------------------ ------------- ------------
Accounts payable $ 2,244,092 $ 1,463,316
Accrued liabilities 1,428,364 1,550,683
------------------------------------------------- ------------- ------------
Total accounts payable and other liabilities $ 3,672,456 $ 3,013,999
--------------------------------------------- ------------- ------------
The following is an aged analysis of the accounts payable and
other liabilities:
As at As at
September 30, December 31,
2022 2021
------------------------------------------------ ------------- ------------
Less than 3 months $ 2,866,801 $ 2,246,440
3 to 12 months 214,894 98,415
More than 24 months (See also Note 17) 590,761 669,144
------------------------------------------------- ------------- ------------
Total accounts payable and other liabilities $ 3,672,456 $ 3,013,999
--------------------------------------------- ------------- ------------
10. Financing Facilities
Amounts payable on the Company's financial facilities are as
follow:
As at As at
September 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 194,517 151,290
Interest 309,588 164,197
Foreign exchange adjustment (630,826) 23,962
--------------------------------------------------------------- ------------- ------------
4,120,767 4,247,488
-------------------------------------------------------------- ------------- ------------
Financing facilities - non-current portion $ 4,120,767 $ 4,247,488
----------------------------------------------------------- ------------- ------------
(i) During the nine months ended September 30, 2021, the
maturity date of the G&F Phelps loan was extended to December
31, 2023. Interest was deferred and added to the balance
outstanding until March 31, 2022, after which point interest has
been 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 18,422
Lease payments (668,534)
Foreign exchange (36,668)
-------------------------------- --------
Balance, September 30, 2022 $ -
---------------------------- --------
(i) During the year ended 2021, the Company entered into lease
agreements in respect to rent of equipments which expired between
February 2022 to July 2022.
(ii) During the nine months ended September 30, 2022, the
Company entered into lease agreements in respect to rent of
equipments, all of which expired in 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 September 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 September 30, 2022, the issued share capital amounted to
$68,649,647. 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 (783,920)
Exercise of warrants 1,413,333 893,494
--------------------------------------------- ----------- ----------
Balance, September 30, 2021 74,683,801 $57,783,570
--------------------------------------------- ----------- ----------
Balance, December 31, 2021 74,683,801 $57,783,570
Shares issued in private placement (ii) 13,111,119 5,900,003
Shares issued for services arrangement (ii) 2,222,222 1,000,000
Warrants issued (ii) - (2,320,000)
Share issue costs - (813,932)
Exercise of warrants 12,969,667 7,100,006
--------------------------------------------- ----------- ----------
Balance, September 30, 2022 102,986,809 $68,649,647
--------------------------------------------- ----------- ----------
(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.
(ii) On August 30, 2022, Galantas completed a private placement
of 13,111,119 units at a price of $0.45 per unit for aggregate
gross proceeds of $5,900,003.
In addition, 2,222,222 units were sold to a third-party service
provider on the same term as the offering. The gross proceeds being
$1,000,000 was offset against certain fees to be paid to the
third-party service provider by the Company pursuant to a service
agreement between the third-party service provider and the Company
dated August 30, 2022, for the underground development at the Omagh
Gold Project.
Each unit comprises one common share and one-half common share
purchase warrant. Each warrant will be exercisable into one
additional common share at an exercise price of $0.55 until
February 28, 2025.
The fair value of the 7,666,669 warrants was estimated at
$2,320,000 using the Black-Scholes option pricing model with the
following assumptions: expected dividend yield - 0%, expected
volatility - 128.35%, risk-free interest rate - 3.64% and an
expected average life of 2.5 years.
The Company paid the agents a cash commission equal to $355,320
and issue 820,000 non-transferable broker warrants of the Company.
Each broker warrant is exercisable to acquire one common share at
an exercise price of $0.45 until August 30, 2024. The fair value of
the 820,000 warrants was estimated at $212,000 using the
Black-Scholes option pricing model with the following assumptions:
expected dividend yield - 0%, expected volatility - 109.13%,
risk-free interest rate - 3.63% and an expected average life of 2
years.
The securities issued under the offering are subject to a
four-month hold period under applicable Canadian securities laws
which will expire on December 31, 2022.
Melquart Limited ("Melquart") acquired 2,666,667 units for
consideration of $1,200,000. Following the offering, Melquart holds
28,140,195 common shares, representing approximately 27.36% of the
issued and outstanding common shares on a non-diluted basis. Ocean
Partners acquired 461,112 units of the private placement, for
consideration of $207,500. Mario Stifano, a director of the
Company, acquired 55,556 units for consideration of $25,000.
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) and 12(b)(i)) 28,404,931 0.40
Expired (1,413,333) 0.35
----------------------------------------- ----------- --------
Balance, September 30, 2021 28,691,598 $ 0.39
----------------------------------------- ----------- --------
Balance, December 31, 2021 28,691,598 $ 0.39
Issued (notes 12(b)(ii) and 15(a)(iii)) 8,861,669 0.54
Exercised (12,969,667) 0.36
----------------------------------------- ----------- --------
Balance, September 30, 2022 24,583,600 $ 0.45
----------------------------------------- ----------- --------
The following table reflects the actual warrants issued and
outstanding as of September 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)) 14,941,931 1,829,779 0.40
July 25, 2023 125,000 23,000 0.48
December 31, 2023 780,000 274,882 0.33
August 30, 2024 820,000 212,000 0.45
February 28, 2025 7,666,669 2,320,000 0.55
------------------------------------ ----------- ---------- --------
24,583,600 4,710,661 0.45
----------------------------------- ----------- ---------- --------
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)(iii) 4,360,000 0.85
----------------------------- --------- --------
Balance, September 30, 2021 4,930,000 $ 0.88
----------------------------- --------- --------
Balance, December 31, 2021 4,885,000 $ 0.88
Granted (iv) 1,742,500 0.60
Expired (255,000) 1.35
Cancelled (220,000) 0.94
----------------------------- --------- --------
Balance, September 30, 2022 6,152,500 $ 0.78
----------------------------- --------- --------
(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.
(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.
(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.
(iv) 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.
The portion of the estimated fair value of options granted in
the current and prior years and vested during the three and nine
months ended September 30, 2022, amounted to $236,623 and
$1,232,600, respectively (three and nine months ended September 30,
2021 - $404,064 and $1,639,205, respectively).
The following table reflects the actual stock options issued and
outstanding as of September 30, 2022:
Weighted average Number of
remaining Number of options Number of
Exercise contractual options vested options
Expiry date price ($) life (years) outstanding (exercisable) unvested
------------------ --------- ---------------- ----------- ------------- ---------
April 19, 2023 1.10 0.55 25,000 25,000 -
February 13, 2024 0.90 1.37 85,000 85,000 -
June 27, 2024 0.90 1.74 100,000 100,000 -
May 19, 2026 0.86 3.64 3,760,000 2,506,667 1,253,333
June 21, 2026 0.73 3.73 425,000 283,333 141,667
August 27, 2026 0.86 3.91 20,000 13,333 6,667
May 3, 2023 0.60 4.59 1,737,500 579,167 1,158,333
------------------- --------- ---------------- ----------- ------------- ---------
0.78 3.84 6,152,500 3,592,500 2,560,000
------------------ --------- ---------------- ----------- ------------- ---------
13. Net Loss per Common Share
The calculation of basic and diluted loss per share for the
three and nine months ended September 30, 2022 was based on the
loss attributable to common shareholders of $1,555,824 and
$4,551,804, respectively (three and nine months ended September 30,
2021 - $1,173,276 and $4,701,807, respectively) and the weighted
average number of common shares outstanding of 92,115,467 and
84,788,729, respectively (three and nine months ended September 30,
2021 - 74,488,086 and 60,565,996, respectively) for basic and
diluted loss per share. Diluted loss did not include the effect of
24,583,600 warrants (three and nine months ended September 30, 2021
- 28,691,598) and 6,152,500 options (three and nine months ended
September 30, 2021 - 4,930,000) for the three and nine months ended
September 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 nine months ended
September 30, 2022 totalled approximately US$183,000 and
US$402,000, respectively (three and nine months ended September 30,
2021 - US$329,000 and US$1,114,000, 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 pursuant to IFRS 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 Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
----------------------------------------- ---------- ------- -------- -------
Interest on related party loans (i) $ 214,159 $ 40,861 $ 376,908 $ 159,397
--------------------------------- ---- ---------- ------- -------- -------
(i) Refer to note 10(i).
(ii) Refer to note 12(b)(i)(ii).
(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 matured on July 31, 2022.
-- 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 was paid to Ocean Partners if the
Company elects to extend the loan for a further six months from the
maturity date. The Company exercised its option to extend the
US$1.06 million loan for a further six months, to January 31, 2023
by paying the US$40,000 extension fee to Ocean Partners.
Proceeds from the loan will be used for further development of
the Omagh mine in Northern Ireland and working capital.
(a) The Company entered into the following transactions with
related parties (continued):
(iii) (continued) 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 bonus 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 bonus warrants are subject to a hold period
under applicable securities laws and the rules of the TSXV,
expiring on July 25, 2023. The fair value of the 125,000 warrants
was valued at $23,000 using the following Black-Scholes option
pricing model with the following assumptions: expected dividend
yield - 0%, expected volatility - 95.09%, risk-free interest rate -
3.12% and an expected average life of 1 year.
-- 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.
As at September 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
$4,984,795 (December 31, 2021 - $2,444,376).
September 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 2,044,133 -
Less bonus warrants (1) (74,000) (251,000)
Repayment (245,785) -
Accretion 149,813 57,338
Interest 376,908 27,506
Foreign exchange adjustment 289,350 33,395
------------------------------------------------------------- ------------- ------------
Balance, end of period 4,984,795 2,444,376
Less current balance (2,289,594) -
------------------------------------------------------------- ------------- ------------
Due to related parties - non-current balance $ 2,695,201 $ 2,444,376
--------------------------------------------------------- ------------- ------------
(1) During the year ended December 31, 2021, 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 Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
----------------------------- --------- -------- --------- ---------
Salaries and benefits (1) $ 193,705 $ 93,305 $ 446,839 $ 261,291
Stock-based compensation 148,268 267,570 781,955 1,098,008
------------------------------ --------- -------- --------- ---------
$ 341,973 $ 360,875 $1,228,794 $1,359,299
----------------------------- --------- -------- --------- ---------
(1) Salaries and benefits include director fees. As at September
30, 2022, due to directors for fees amounted to $35,000 (December
31, 2021 - $102,917) and due to officers, mainly for salaries and
benefits accrued amounted to $163,164 (December 31, 2021 -
$21,400), and is included with due to related parties.
(c) As at September 30, 2022, Ross Beaty owns 3,744,747 common
shares of the Company or approximately 3.6% of the outstanding
common shares. Premier Miton owns 4,848,243 common shares of the
Company or approximately 4.7%. Melquart owns, directly and
indirectly, 24,140,195 common shares of the Company or
approximately 27.3% of the outstanding common shares of the
Company. G&F Phelps owns 5,353,818 common shares of the Company
or approximately 5.2%. Eric Sprott owns 10,166,667 common shares of
the Company or approximately 9.9%. Mike Gentile owns 6,217,222
common shares of the Company or approximately 6.0%. The remaining
43.3% 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:
September 30, 2022 United Kingdom Canada Total
------------------- -------------- --------- ----------
Current assets $ 841,557 $4,603,792 $ 5,445,349
Non-current assets $ 32,243,020 $ 148,566 $32,391,586
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 $459,417 (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. Event After the Reporting Period
On November 18, 2022, the Company was fined GBP 120,000 relating
to a legacy event that happened in July 2018 under previous
management. The company has six months to pay this fine. New
systems and procedures have since been put in place to avoid a
reoccurrence and have been reviewed by both the HSE and Mines
Inspector.
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END
QRTGZMFMGGRGZZG
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