GALANTAS GOLD
CORPORATION
TSXV & AIM: Symbol
GAL
GALANTAS REPORT FINANCIAL
RESULTS FOR THE QUARTER ENDED MARCH 31, 2024
May 28, 2024: Galantas Gold
Corporation (the 'Company') is pleased to announce its unaudited
financial results for the Quarter ended March 31, 2024.
Financial Highlights
Highlights of the first quarter 2024
results, which are expressed in Canadian Dollars, are summarized
below:
|
All
figures denominated in Canadian Dollars (CDN$)
|
Quarter
Ended
March
31
2024
2023
|
|
Revenue
|
$
0
|
$
0
|
|
Cost and expenses of
operations
|
$
(17,332)
|
$
(50,215)
|
|
Loss before the undernoted
|
$
(17,332)
|
$
(50,215)
|
|
Depreciation
|
$ (106,226)
|
$
(126,105)
|
|
General administrative
expenses
|
$ (1,173,035)
|
$
(1,242,764)
|
|
Foreign exchange gain
(loss)
|
$
119,127
|
$
25,470
|
|
Unrealized gain on derivative fair
value adjustment
|
$
523,850
|
$
0
|
|
Net (Loss) for the quarter
|
$ (653,616)
|
$
(1,393,614)
|
|
Working Capital Deficit
|
$ (11,290,856)
|
$
(11,074,990)
|
|
Cash loss from operating
activities before changes in non-cash
working capital
|
$ (495,610)
|
$
(475,530)
|
|
Cash at March 31, 2024
|
$ 1,288,200
|
$
2,516,822
|
Sales revenue for the quarter ended
March 31, 2024 amounted to $ Nil compared to revenue of $ Nil for
the quarter ended March 31, 2023. Shipments of concentrate
commenced during the third quarter of 2019. Concentrate sales
provisional revenues totalled US$ 206,566 for the first quarter of
2024 compared to US $ 255,000 for the first quarter of 2023. 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
March 31, 2024 amounted to $ 653,616 (2023: $ 1,393,614) and the
cash outflow from operating activities before changes in non-cash
working capital for the quarter ended March 31, 2024 amounted to
$495,610 (2023: $475,530).
The Company had a cash balance of
$1,288,200 at March 31, 2024 compared to $2,516,822 at March 31,
2023. The working capital deficit at March 31, 2024 amounted to
$11,290,856 compared to a working capital deficit
of $11,074,990 at March 31, 2023.
Safety is a high priority for the
Company and we continue 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.
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/3309Q_1-2024-5-29.pdf
Qualified Person
The financial components of this
disclosure have 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.
The information contained within
this announcement is deemed to constitute inside information as
stipulated under the retained EU law version of the Market Abuse
Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law
by virtue of the European Union (Withdrawal) Act 2018. The
information is disclosed in accordance with the Company's
obligations under Article 17 of the UK MAR. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
Enquiries
Galantas Gold Corporation
Mario Stifano - CEO
Email: info@galantas.com
Website: www.galantas.com
Telephone: 001 416 453 8433
Grant Thornton UK LLP (Nomad)
Philip Secrett, Harrison Clarke,
Elliot
Peters:
Telephone: +44(0)20 7383
5100
SP Angel Corporate Finance LLP (AIM
Broker)
David Hignell, Charlie Bouverat
(Corporate Finance)
Grant Barker (Sales and
Broking)
Telephone: +44(0)20 3470
0470
GALANTAS GOLD
CORPORATION
Condensed Interim
Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended March 31,
2024
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
March 31,
2024
|
|
|
As at
December 31,
2023
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
1,288,200
|
|
$
|
2,593,265
|
|
|
Accounts receivable and prepaid
expenses (note 4)
|
|
1,548,489
|
|
|
1,596,880
|
|
|
Inventories (note 5)
|
|
128,355
|
|
|
18,184
|
|
|
Total current assets
|
|
2,965,044
|
|
|
4,208,329
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
Property, plant and equipment (note
6)
|
|
23,893,540
|
|
|
23,094,171
|
|
|
Long-term deposit (note 8)
|
|
513,420
|
|
|
505,110
|
|
|
Exploration and evaluation assets
(note 7)
|
|
4,964,381
|
|
|
4,776,409
|
|
|
Total non-current assets
|
|
29,371,341
|
|
|
28,375,690
|
|
|
Total assets
|
$
|
32,336,385
|
|
$
|
32,584,019
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable and other
liabilities (notes 9 and 17)
|
$
|
3,435,140
|
|
$
|
3,662,842
|
|
|
Financing facilities (note
10)
|
|
6,488,362
|
|
|
6,119,308
|
|
|
Due to related parties (note
15)
|
|
4,332,398
|
|
|
5,838,256
|
|
|
Other liability (note 15)
|
|
-
|
|
|
1,187,437
|
|
|
Total current liabilities
|
|
14,255,900
|
|
|
16,807,843
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
Due to related parties (note
15)
|
|
-
|
|
|
638,432
|
|
|
Decommissioning liability (note
8)
|
|
624,214
|
|
|
611,452
|
|
|
Convertible debenture (note
11)
|
|
5,285,669
|
|
|
1,923,509
|
|
|
Derivative liability (note
11)
|
|
1,470,114
|
|
|
1,245,627
|
|
|
Total non-current liabilities
|
|
7,379,997
|
|
|
4,419,020
|
|
|
Total liabilities
|
|
21,635,897
|
|
|
21,226,863
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Share capital
(note 12(a)(b))
|
|
71,699,799
|
|
|
71,809,999
|
|
|
Reserves
|
|
18,686,615
|
|
|
18,579,467
|
|
|
Deficit
|
|
(79,685,926
|
)
|
|
(79,032,310
|
)
|
|
Total equity
|
|
10,700,488
|
|
|
11,357,156
|
|
|
Total equity and liabilities
|
$
|
32,336,385
|
|
$
|
32,584,019
|
|
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)
Galantas Gold
Corporation
Condensed Interim Consolidated Statements of Loss
(Expressed in Canadian Dollars)
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Sales of
concentrate (note 14)
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Cost
and expenses of operations
|
|
|
|
|
|
|
|
Cost of sales
|
|
17,332
|
|
|
50,215
|
|
|
Depreciation (note 6)
|
|
106,226
|
|
|
126,105
|
|
|
|
|
123,558
|
|
|
176,320
|
|
|
|
|
|
|
|
|
|
|
Loss
before general administrative and other income
|
|
(123,558
|
)
|
|
(176,320
|
)
|
|
|
|
|
|
|
|
|
|
General administrative expenses
|
|
|
|
|
|
|
|
Management and administration wages
(note 15)
|
|
110,932
|
|
|
124,198
|
|
|
Other operating expenses
|
|
34,910
|
|
|
94,763
|
|
|
Accounting and corporate
|
|
28,528
|
|
|
146,611
|
|
|
Legal and audit
|
|
32,949
|
|
|
43,393
|
|
|
Stock-based compensation (note
12(d))
|
|
29,814
|
|
|
183,723
|
|
|
Shareholder communication and
investor relations
|
|
123,536
|
|
|
162,595
|
|
|
Transfer agent
|
|
21,265
|
|
|
6,345
|
|
|
Director fees (note 15)
|
|
35,000
|
|
|
35,000
|
|
|
General office
|
|
22,960
|
|
|
41,946
|
|
|
Accretion expenses (notes 8, 10, 11
and 15)
|
|
293,275
|
|
|
111,132
|
|
|
Loan interest and bank charges less
deposit interest (notes 10, 11 and 15)
|
|
439,866
|
|
|
293,058
|
|
|
|
|
1,173,035
|
|
|
1,242,764
|
|
|
Other income
|
|
|
|
|
|
|
|
Foreign exchange gain
|
|
(119,127
|
)
|
|
(25,470
|
)
|
|
Unrealized gain on derivative fair
value adjustment (note 11)
|
|
(523,850
|
)
|
|
-
|
|
|
|
|
(642,977
|
)
|
|
(25,470
|
)
|
|
Net
loss for the period
|
$
|
(653,616
|
)
|
$
|
(1,393,614
|
)
|
|
Basic and diluted net loss per share (note
13)
|
$
|
(0.01)
|
|
$
|
(0.01
|
)
|
|
Weighted average number of common shares
outstanding - basic and
diluted
|
|
114,732,865
|
|
|
103,893,399
|
|
The notes to the unaudited condensed
interim consolidated financial statements are an integral part of
these statements.
Galantas Gold
Corporation
Condensed Interim
Consolidated Statements. of Comprehensive Loss
(Expressed in Canadian Dollars)
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
$
|
(653,616
|
)
|
$
|
(1,393,614
|
)
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
Items that will be reclassified subsequently to profit or
loss
|
|
|
|
|
|
|
|
Exchange differences on translating
foreign operations
|
|
77,334
|
|
|
453,574
|
|
|
Total comprehensive loss
|
$
|
(576,282
|
)
|
$
|
(940,040
|
)
|
The notes to the unaudited condensed
interim consolidated financial statements are an integral part of
these statements.
Galantas Gold
Corporation
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
Net loss for the period
|
$
|
(653,616
|
)
|
$
|
(1,393,614
|
)
|
|
Adjustment for:
|
|
|
|
|
|
|
|
Depreciation (note 6)
|
|
106,226
|
|
|
126,105
|
|
|
Stock-based compensation (note
12(d))
|
|
29,814
|
|
|
183,723
|
|
|
Accrued interest (notes 10, 11 and
15)
|
|
423,051
|
|
|
395,054
|
|
|
Foreign exchange (gain)
loss
|
|
(170,510
|
)
|
|
102,070
|
|
|
Accretion expenses (notes 8, 10, 11
and 15)
|
|
293,275
|
|
|
111,132
|
|
|
Impairment of property, plant and
equipment and
|
|
|
|
|
|
|
|
Gain on derivative fair value
adjustment (note 11)
|
|
(523,850
|
)
|
|
-
|
|
|
Non-cash working capital
items:
|
|
|
|
|
|
|
|
Accounts receivable and prepaid
expenses
|
|
49,870
|
|
|
251,144
|
|
|
Inventories
|
|
(108,094
|
)
|
|
4,896
|
|
|
Accounts payable and other
liabilities
|
|
(272,994
|
)
|
|
461,212
|
|
|
Net
cash and cash equivalents (used in) provided by operating
activities
|
|
(826,828
|
)
|
|
241,722
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
Net purchase of property, plant and
equipment
|
|
(532,574
|
)
|
|
(1,187,334
|
)
|
|
Exploration and evaluation
assets
|
|
(134,653
|
)
|
|
(921,853
|
)
|
|
Net
cash and cash equivalents used in investing
activities
|
|
(667,227
|
)
|
|
(2,109,187
|
)
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
Proceeds of private placements (note
12(b)(i))
|
|
-
|
|
|
2,963,142
|
|
|
Share issue costs
|
|
-
|
|
|
(204,993
|
)
|
|
Proceeds from exercise of
warrants
|
|
-
|
|
|
5,600
|
|
|
Advances from related
parties
|
|
169,852
|
|
|
-
|
|
|
Repayments to related
parties
|
|
-
|
|
|
(6,500
|
)
|
|
Proceeds from financing
facilities
|
|
-
|
|
|
580,392
|
|
|
Net
cash and cash equivalents provided by financing
activities
|
|
169,852
|
|
|
3,337,641
|
|
|
|
|
|
|
|
|
|
|
Net
change in cash and cash equivalents
|
|
(1,324,203
|
)
|
|
1,470,176
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on
cash held in foreign currencies
|
|
19,138
|
|
|
8,003
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents, beginning of period
|
|
2,593,265
|
|
|
1,038,643
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents, end of period
|
$
|
1,288,200
|
|
$
|
2,516,822
|
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
1,288,200
|
|
$
|
2,516,822
|
|
|
Cash equivalents
|
|
-
|
|
|
-
|
|
|
Cash and cash equivalents
|
$
|
1,288,200
|
|
$
|
2,516,822
|
|
The notes to the unaudited condensed
interim consolidated financial statements are an integral part of
these statements.
Galantas Gold
Corporation
Condensed Interim
Consolidated Statements of Changes in Equity
(Expressed in Canadian Dollars)
(Unaudited)
|
|
|
|
|
|
|
|
|
Reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
settled
|
|
|
Foreign
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
share-based
|
|
|
currency
|
|
|
|
|
|
|
|
|
|
|
Share
|
|
|
Warrants
|
|
|
payments
|
|
|
translation
|
|
|
|
|
|
|
|
|
|
|
capital
|
|
|
reserve
|
|
|
reserve
|
|
|
reserve
|
|
|
Deficit
|
|
|
Total
|
|
|
Balance, December 31, 2022
|
$
|
69,664,056
|
|
$
|
3,903,004
|
|
$
|
11,887,678
|
|
$
|
(275,577
|
)
|
$
|
(70,464,170
|
)
|
$
|
14,714,991
|
|
|
Shares issued in
private
placement (note 12(b)(i))
|
|
2,963,142
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,963,142
|
|
|
Warrants issued (note
12(b)(i))
|
|
(1,284,806
|
)
|
|
1,284,806
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Warrants
issued
|
|
-
|
|
|
82,511
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
82,511
|
|
|
Share issue costs (note
12(b)(i))
|
|
(245,168
|
)
|
|
40,175
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(204,993
|
)
|
|
Stock-based
compensation (note 12(d))
|
|
-
|
|
|
-
|
|
|
183,723
|
|
|
-
|
|
|
-
|
|
|
183,723
|
|
|
Exercise of
warrants
|
|
7,311
|
|
|
(1,711
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
5,600
|
|
|
Warrants
expired
|
|
-
|
|
|
(51,000
|
)
|
|
51,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Exchange differences on
translating
foreign operations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
453,574
|
|
|
-
|
|
|
453,574
|
|
|
Net loss for the
period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,393,614
|
)
|
|
(1,393,614
|
)
|
|
Balance, March 31, 2023
|
$
|
71,104,535
|
|
$
|
5,257,785
|
|
$
|
12,122,401
|
|
$
|
177,997
|
|
$
|
(71,857,784
|
)
|
$
|
16,804,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
$
|
71,809,999
|
|
$
|
3,546,313
|
|
$
|
14,345,538
|
|
$
|
687,616
|
|
$
|
(79,032,310
|
)
|
$
|
11,357,156
|
|
|
Shares
cancelled
|
|
(110,200
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(110,200
|
)
|
|
Stock-based
compensation (note 12(d))
|
|
-
|
|
|
-
|
|
|
29,814
|
|
|
-
|
|
|
-
|
|
|
29,814
|
|
|
Exchange differences on
translating
foreign operations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
77,334
|
|
|
-
|
|
|
77,334
|
|
|
Net loss for the
period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(653,616
|
)
|
|
(653,616
|
)
|
|
Balance, March 31, 2024
|
$
|
71,699,799
|
|
$
|
3,546,313
|
|
$
|
14,375,352
|
|
$
|
764,950
|
|
$
|
(79,685,926
|
)
|
$
|
10,700,488
|
|
The notes
to the unaudited condensed interim consolidated financial
statements are an integral part of these statements.
|
Galantas Gold
Corporation
Notes to Condensed Interim
Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian
Dollars)
(Unaudited)
|
1. Going Concern
These unaudited condensed interim
consolidated financial statements have been prepared on a going
concern basis which contemplates that Galantas Gold Corporation
(the "Company") will be able to realize assets and discharge
liabilities in the normal course of business. In assessing whether
the going concern assumption is appropriate, management takes into
account all available information about the future, which is at
least, but is not limited to, twelve months from the end of the
reporting period. Management is aware, in making its assessment, of
uncertainties related to events or conditions that may cast doubt
on the Company's ability to continue as a going concern. The
Company's future viability depends on the consolidated results of
the Company's wholly-owned subsidiaries Gairloch Resources Limited
("Gairloch") incorporated on November 16, 2023 and Cavanacaw
Corporation ("Cavanacaw"). Cavanacaw has a 100% shareholding in
Galántas Irish Gold Limited ("Galántas"), 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 on forecast cash flows being met, further financing
negotiations being completed together. Management' assumptions in
relation to future financing, levels of production, gold prices and
mine operating 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.
Based on the financial projections
which have been prepared for a five-year period and using
assumptions which management believes to be prudent, alongside
ongoing negotiations with both current and prospective investors
and creditors, management believes it is appropriate to prepare the
unaudited condensed interim consolidated financial statements on
the going concern basis.
Should the Company be unsuccessful
in securing the above, there would be significant uncertainty over
the Company's ability to continue as a going concern. The unaudited
condensed interim consolidated financial statements do not include
any adjustments that would result if forecast cash flows were not
achieved, if the existing creditors withdrew their support or if
further financing could not be raised from current or potential
investors.
During the year ended December 31,
2023, the Company raised gross proceeds of $3M through the issuance
of shares to investors and $3.5M through the issuance of
convertible debentures.
As at March 31, 2024, the Company
had a deficit of $79,685,926 (December 31, 2023 - $79,032,310).
Comprehensive loss for the three months ended March 31, 2024 was
$576,282 (three months ended March 31, 2023 - $940,040). 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 believes 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. 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 November 16, 2023, Gairloch was
incorporated.
The Company's operations include the
consolidated results of Gairloch, 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.
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 May 28, 2024 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, 2023. Any subsequent changes to
IFRS that are given effect in the Company's annual consolidated
financial statements for the year ending December 31, 2024 could
result in restatement of these unaudited condensed interim
consolidated financial statements.
4. Accounts Receivable and Prepaid
Expenses
|
|
|
As at
|
|
|
As at
|
|
|
|
|
March 31,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Sales tax receivable -
Canada
|
$
|
55,700
|
|
$
|
15,067
|
|
|
Valued added tax receivable -
Northern Ireland
|
|
67,913
|
|
|
9,959
|
|
|
Accounts receivable
|
|
362,332
|
|
|
83,266
|
|
|
Prepaid expenses
|
|
1,062,544
|
|
|
1,488,588
|
|
|
|
$
|
1,548,489
|
|
$
|
1,596,880
|
|
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 for the underground development at the Omagh
Gold Project.
The following is an aged analysis of
receivables:
|
|
|
As at
March 31,
2024
|
|
|
As at
December 31,
2023
|
|
|
|
|
|
|
|
|
|
|
Less than 3 months
|
$
|
401,252
|
|
$
|
50,614
|
|
|
3 to 12 months
|
|
66,666
|
|
|
45,330
|
|
|
More than 12 months
|
|
18,027
|
|
|
12,348
|
|
|
Total accounts receivable
|
$
|
485,945
|
|
$
|
108,292
|
|
5. Inventories
|
|
|
As at
March 31,
2024
|
|
|
As at
December 31,
2023
|
|
|
|
|
|
|
|
|
|
|
Concentrate inventories
|
$
|
128,355
|
|
$
|
18,184
|
|
6. Property, Plant and
Equipment
|
Cost
|
|
Freehold
land and
buildings
|
|
|
Plant
and
machinery
|
|
|
Motor
vehicles
|
|
|
Office
equipment
|
|
|
Development
assets (i)
|
|
|
Assets under
construction
|
|
|
Total
|
|
|
Balance, December 31, 2022
|
$
|
2,252,053
|
|
$
|
8,721,798
|
|
$
|
220,866
|
|
$
|
216,029
|
|
$
|
21,402,040
|
|
$
|
-
|
|
$
|
32,812,786
|
|
|
Additions
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,423,820
|
|
|
26,939
|
|
|
3,450,759
|
|
|
Cash receipts from concentrate
sales
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,491,453
|
)
|
|
-
|
|
|
(1,491,453
|
)
|
|
Impairment
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(3,353,077
|
)
|
|
-
|
|
|
(3,353,077
|
)
|
|
Foreign exchange
adjustment
|
|
71,058
|
|
|
274,128
|
|
|
6,969
|
|
|
6,816
|
|
|
658,736
|
|
|
-
|
|
|
1,017,707
|
|
|
Balance, December 31, 2023
|
|
2,323,111
|
|
|
8,995,926
|
|
|
227,835
|
|
|
222,845
|
|
|
20,640,066
|
|
|
26,939
|
|
|
32,436,722
|
|
|
Additions
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
532,574
|
|
|
-
|
|
|
532,574
|
|
|
Transfer
|
|
-
|
|
|
27,382
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(27,382
|
)
|
|
-
|
|
|
Foreign exchange
adjustment
|
|
38,220
|
|
|
147,439
|
|
|
3,748
|
|
|
3,666
|
|
|
336,565
|
|
|
443
|
|
|
530,081
|
|
|
Balance, March 31, 2024
|
$
|
2,361,331
|
|
$
|
9,170,747
|
|
$
|
231,583
|
|
$
|
226,511
|
|
$
|
21,509,205
|
|
$
|
-
|
|
$
|
33,499,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
$
|
1,876,242
|
|
$
|
6,378,013
|
|
$
|
158,615
|
|
$
|
144,067
|
|
$
|
-
|
|
$
|
-
|
|
$
|
8,556,937
|
|
|
Depreciation
|
|
3,954
|
|
|
482,088
|
|
|
17,864
|
|
|
11,097
|
|
|
-
|
|
|
-
|
|
|
515,003
|
|
|
Foreign exchange
adjustment
|
|
59,213
|
|
|
201,755
|
|
|
5,062
|
|
|
4,581
|
|
|
-
|
|
|
-
|
|
|
270,611
|
|
|
Balance, December 31, 2023
|
|
1,939,409
|
|
|
7,061,856
|
|
|
181,541
|
|
|
159,745
|
|
|
-
|
|
|
-
|
|
|
9,342,551
|
|
|
Depreciation
|
|
805
|
|
|
99,605
|
|
|
3,413
|
|
|
2,403
|
|
|
-
|
|
|
-
|
|
|
106,226
|
|
|
Foreign exchange
adjustment
|
|
35,732
|
|
|
115,707
|
|
|
2,990
|
|
|
2,631
|
|
|
-
|
|
|
-
|
|
|
157,060
|
|
|
Balance, March 31, 2024
|
$
|
1,975,946
|
|
$
|
7,277,168
|
|
$
|
187,944
|
|
$
|
164,779
|
|
$
|
-
|
|
$
|
-
|
|
$
|
9,605,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
$
|
383,702
|
|
$
|
1,934,070
|
|
$
|
46,294
|
|
$
|
63,100
|
|
$
|
20,640,066
|
|
$
|
26,939
|
|
$
|
23,094,171
|
|
|
Balance, March 31, 2024
|
$
|
385,385
|
|
$
|
1,893,579
|
|
$
|
43,639
|
|
$
|
61,732
|
|
$
|
21,509,205
|
|
$
|
-
|
|
$
|
23,893,540
|
|
(i) Development assets are
expenditures for the underground mining operations in
Omagh.
7. Exploration and Evaluation
Assets
|
Cost
|
|
Acquisition
costs
|
|
|
Exploration
costs
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
$
|
-
|
|
$
|
2,665,313
|
|
$
|
2,665,313
|
|
|
Additions
|
|
1,140,115
|
|
|
1,162,710
|
|
|
2,302,825
|
|
|
Impairment
|
|
-
|
|
|
(282,493
|
)
|
|
(282,493
|
)
|
|
Foreign exchange
adjustment
|
|
-
|
|
|
90,764
|
|
|
90,764
|
|
|
Balance, December 31, 2023
|
|
1,140,115
|
|
|
3,636,294
|
|
|
4,776,409
|
|
|
Additions
|
|
-
|
|
|
134,653
|
|
|
134,653
|
|
|
Foreign exchange
adjustment
|
|
-
|
|
|
53,319
|
|
|
53,319
|
|
|
Balance, March 31, 2024
|
$
|
1,140,115
|
|
$
|
3,824,266
|
|
$
|
4,964,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
$
|
1,140,115
|
|
$
|
3,636,294
|
|
$
|
4,776,409
|
|
|
Balance, March 31, 2024
|
$
|
1,140,115
|
|
$
|
3,824,266
|
|
$
|
4,964,381
|
|
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 March 31, 2024 based on a risk-free discount rate of
1% (December 31, 2023 - 1%) and an inflation rate of 1.50%
(December 31, 2023 - 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 March 31, 2024, the estimated fair
value of the liability is $624,214 (December 31, 2023 - $611,452).
Changes in the provision during the three months ended March 31,
2024 are as follows:
|
|
|
As at
March 31,
2024
|
|
|
As at
December 31,
2023
|
|
|
|
|
|
|
|
|
|
|
Decommissioning liability, beginning
of period
|
$
|
611,452
|
|
$
|
582,441
|
|
|
Accretion
|
|
2,700
|
|
|
10,601
|
|
|
Foreign exchange
|
|
10,062
|
|
|
18,410
|
|
|
Decommissioning liability, end of
period
|
$
|
624,214
|
|
$
|
611,452
|
|
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, 2023 - GBP 300,000), of which GBP 300,000 was funded as of
March 31, 2024 (GBP 300,000 was funded as of December 31, 2023) and
reported as long-term deposit of $513,420 (December 31, 2023 -
$505,110).
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
March 31,
2024
|
|
|
As at
December 31,
2023
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
2,271,977
|
|
$
|
2,131,257
|
|
|
Accrued liabilities
|
|
1,163,163
|
|
|
1,531,585
|
|
|
Total accounts payable and other
liabilities
|
$
|
3,435,140
|
|
$
|
3,662,842
|
|
The following is an aged analysis of
the accounts payable and other liabilities:
|
|
|
As at
March 31,
2024
|
|
|
As at
December 31,
2023
|
|
|
|
|
|
|
|
|
|
|
Less than 3 months
|
$
|
1,165,947
|
|
$
|
1,672,744
|
|
|
3 to 12 months
|
|
910,566
|
|
|
807,338
|
|
|
12 to 24 months
|
|
606,431
|
|
|
474,290
|
|
|
More than 24 months (see also note
17)
|
|
752,196
|
|
|
708,470
|
|
|
Total accounts payable and other
liabilities
|
$
|
3,435,140
|
|
$
|
3,662,842
|
|
10. Financing Facilities
Amounts payable on the Company's
financial facilities are as follow:
|
|
|
As at
March 31,
2024
|
|
|
As at
December 31,
2023
|
|
|
|
|
|
|
|
|
|
|
G&F Phelps
|
|
|
|
|
|
|
|
Financing facility, beginning of
period
|
$
|
6,119,308
|
|
$
|
4,836,267
|
|
|
Accretion
|
|
-
|
|
|
259,354
|
|
|
Interest
|
|
268,176
|
|
|
961,722
|
|
|
Shares for debt settlement
|
|
-
|
|
|
(100,000
|
)
|
|
Foreign exchange
adjustment
|
|
100,878
|
|
|
161,965
|
|
|
|
|
6,488,362
|
|
|
6,119,308
|
|
|
Less
current portion
|
|
(6,488,362
|
)
|
|
(6,119,308
|
)
|
|
Financing facilities - non-current portion
|
$
|
-
|
|
$
|
-
|
|
11. Convertible Debentures
(i) On December 20, 2023, the
Company closed a $3,502,054 (US$ 2,627,000) convertible debenture.
The convertible debenture is unsecured, is for a term of three year
commencing on the date that it is issued, carries a coupon of 10%
per annum and is convertible into common shares of the Company.
Each debenture consists of US$1,000 principal amount of unsecured
convertible debentures. The convertible debentures have a term of
36 months from the date of issuance with a conversion price of
US$0.255 being the equivalent of a conversion price of $0.35 per
conversion share. A four month hold period will apply to common
shares converted through the convertible debenture. The hold period
will expire on April 21, 2024.
In accordance with the terms of the
convertible debentures, if, at any time following the issuance of
the convertible debentures, the closing price of the common shares
of the Company on the TSXV equals or exceeds $0.70 per common share
for 10 consecutive trading days or more, the Company may elect to
convert all but not less than all of the outstanding principal
amount of the convertible debentures into conversion shares at the
conversion price, upon giving the holders of the convertible
debentures not less than 30 calendar days advance written notice.
On December 20, 2026, any outstanding principal amount of
convertible debentures plus any accrued and unpaid interest thereon
shall be repaid by the Company in cash.
Interest on the principal amount
outstanding under each convertible debenture shall accrue during
the period commencing on December 20, 2023 until December 20, 2026
and shall be payable in cash on an annual basis on December 31st of
each year (each, an "Interest Payment Date"); provided, however,
that the first interest payment date shall be December 31, 2024.
Each convertible debenture shall bear interest at a minimum
interest rate of 10% per annum (the "Base Interest Rate"). During
each interest period (an "Interest Period"), being the period
commencing on December 20, 2023 to but excluding the first Interest
Payment Date and thereafter the period from and including an
Interest Payment Date to but excluding the next Interest Payment
Date or other applicable payment date, the Base Interest Rate will
be adjusted based on a gold price of US$2,000 per ounce, with the
Base Interest Rate being increased by 1% per annum for each US$100
in which the average gold price for such Interest Period exceeds
US$2,000 per ounce, up to a maximum interest rate of 30% per annum;
provided, however, that, without the prior acceptance of the TSXV,
the average interest rate shall not exceed 24% per annum during the
term of the convertible debentures. Any adjustment to the Base
Interest Rate in respect of an Interest Period shall be calculated
based on the average gold price quoted by the London Bullion Market
Association, being the LBMA Gold Price PM, in respect of the
Interest Period ending on December 31, 2024, from December 20, 2023
to and including December 15, 2024, and for each subsequent
Interest Period, from January 1st to and including December 15th of
that year or 15 days prior to the applicable payment
date.
Melquart, an insider and control
person of the Company (as defined by the TSXV), subscribed for
US$875,000. Ocean Partners, which has a common director with the
Company, acquired US$875,000 aggregate principal amount of
convertible debentures.
The Company paid a cash finder's fee
of US$40,500 (CAD$53,990) and issued 158,823 non-transferable
finder's warrants to Canaccord Genuity Corp. in consideration for
providing certain finder services to the Company under the
offering. Each finder warrant is exercisable to acquire one common
share in the capital of the Company at an exercise price of $0.35
per common share at any time on or before December 20, 2026. The
fair value of the 158,823 finder warrants was estimated at $24,670
using the Black-Scholes option pricing model with the following
assumptions: expected dividend yield - 0%, expected volatility -
107.02%, risk-free interest rate - 3.71% and an expected average
life of 3 years.
The debentures consist of the
liability component and conversion feature. Due to the convertible
debenture being denominated in US$, the conversion feature has been
presented as a non-cash derivative liability.
On the date of issuance, the fair
value of the derivative liability was estimated to be $1,495,208
using the Black-Scholes option pricing model with the following
assumptions: expected dividend yield - 0%, expected volatility -
95.0%, risk-free interest rate - 3.94% and an expected average life
of 3 years.
As at December 31, 2023, the fair
value of the derivative liability was revalued at $1,245,627 using
the Black-Scholes option pricing model with the following
assumptions: expected dividend yield - 0%, expected volatility -
94.9%, risk-free interest rate - 3.91% and an expected average life
of 2.97 years.
On issuance the fair value of the
liability component was recorded at $2,006,846, discounted at an
effective interest rate of 37%.
The Company incurred transaction
costs of $153,481 which was allocated pro-rata on the value of the
conversion feature and the liability component.
During the year ended December 31,
2023, the Company recorded accretion expense of $33,265 and
interest expense of $29,184 as loan interest and bank charges less
deposit interest in the consolidated statement of loss.
As at March 31, 2024, the fair value
of the derivative liability was revalued at $830,639 using the
Black-Scholes option pricing model with the following assumptions:
expected dividend yield - 0%, expected volatility - 95%, risk-free
interest rate - 4.20% and an expected average life of 2.72
years.
During the three months ended March
31, 2024, the Company recorded accretion expense of $183,024 and
interest expense of $88,569 as loan interest and bank charges less
deposit interest in the unaudited condensed interim consolidated
statement of loss.
(ii) On February 5, 2024, the
Company announced that it closed a debt settlement transaction,
pursuant to which the Company settled US$2,711,000 of indebtedness
owing to Ocean Partners through the issuance of US$2,711,000
aggregate principal amount of unsecured convertible debentures of
the Company.
The convertible debenture issued in
connection with the debt settlement were issued on substantially
the same terms as the unsecured convertible debentures closed on
December 20, 2023. The convertible debentures issued pursuant to
the debt settlement are subject to a four-month hold period which
will expire on June 6, 2024.
The debentures consist of the
liability component and conversion feature. Due to the convertible
debenture being denominated in US$, the conversion feature has been
presented as a non-cash derivative liability.
On the date of issuance, the fair
value of the derivative liability was estimated to be $748,337
using the Black-Scholes option pricing model with the following
assumptions: expected dividend yield - 0%, expected volatility -
95.0%, risk-free interest rate - 4.28% and an expected average life
of 2.87 years.
The fair value of the liability
component was recorded at $2,918,833, discounted at an effective
interest rate of 20%.
As at March 31, 2024, the fair value
of the derivative liability was revalued at $639,475 using the
Black-Scholes option pricing model with the following assumptions:
expected dividend yield - 0%, expected volatility - 95%, risk-free
interest rate - 4.20% and an expected average life of 2.72
years.
During the three months ended March
31, 2024, the Company recorded accretion expense of $105,428 and
interest expense of $66,306 as loan interest and bank charges less
deposit interest in the unaudited condensed interim consolidated
statement of loss.
|
|
|
Convertible
debenture
|
|
|
Derivative
liability
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
$
|
-
|
|
$
|
-
|
|
|
Principal amount (i)
|
|
3,502,054
|
|
|
-
|
|
|
Derivative liability component
(i)
|
|
(1,495,208
|
)
|
|
1,495,208
|
|
|
Transaction costs (i)
|
|
(153,481
|
)
|
|
-
|
|
|
Transaction costs allocated to
derivative liability component (i)
|
|
7,695
|
|
|
(7,695
|
)
|
|
Interest expense (i)
|
|
29,184
|
|
|
-
|
|
|
Accretion expense (i)
|
|
33,265
|
|
|
-
|
|
|
Change in fair value (i)
|
|
-
|
|
|
(241,886
|
)
|
|
Balance, December 31, 2023
|
|
1,923,509
|
|
|
1,245,627
|
|
|
Principal amount (ii)
|
|
3,667,170
|
|
|
-
|
|
|
Derivative liability component
(ii)
|
|
(748,337
|
)
|
|
748,337
|
|
|
Interest expense (i)(ii)
|
|
154,875
|
|
|
-
|
|
|
Accretion expense (i)(ii)
|
|
288,452
|
|
|
-
|
|
|
Change in fair value
(i)(ii)
|
|
-
|
|
|
(523,850
|
)
|
|
Balance, March 31, 2024
|
$
|
5,285,669
|
|
$
|
1,470,114
|
|
12. Share Capital and Reserves
a) Authorized share capital
At March 31, 2024, 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 March 31, 2024, the issued share
capital amounted to $71,699,799. The continuity of issued share
capital for the periods presented is as follows:
|
|
|
Number of
common
shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
|
103,518,509
|
|
$
|
69,664,056
|
|
|
Shares issued in private placement
(i)
|
|
8,230,951
|
|
|
2,963,142
|
|
|
Warrants issued (i)
|
|
-
|
|
|
(1,284,806
|
)
|
|
Share issue costs (i)
|
|
-
|
|
|
(245,168
|
)
|
|
Exercise of warrants
|
|
14,000
|
|
|
7,311
|
|
|
Balance, March 31, 2023
|
|
111,763,460
|
|
$
|
71,104,535
|
|
|
|
|
Number of
common
shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
|
114,841,403
|
|
$
|
71,809,999
|
|
|
Shares cancelled
|
|
(306,110
|
)
|
|
(110,200
|
)
|
|
Balance, March 31, 2024
|
|
114,535,293
|
|
$
|
71,699,799
|
|
(i) On March 27, 2023, the Company
closed a non-brokered private placement of 8,230,951 units at a
price of $0.36 per unit for gross proceeds of $2,963,142. Each unit
consists of one common share of the Company and one common share
purchase warrant, with each warrant entitling the holder to
purchase an additional common share at a price of $0.55 per share
until March 27, 2028. The fair value of the 8,230,951 warrants was
estimated at $1,284,806 using the Black-Scholes option pricing
model with the following assumptions: expected dividend yield - 0%,
expected volatility - 126.22%, risk-free interest rate - 2.96% and
an expected average life of 5 years.
The Company paid the agents a cash
commission equal to $130,966 and issued 237,162 non-transferable
broker warrants of the Company. Each broker warrant is exercisable
to acquire one common share at an exercise price of $0.36
until March 27, 2025. The fair value of the 237,162 warrants was
estimated at $40,175 using the Black-Scholes option pricing model
with the following assumptions: expected dividend yield - 0%,
expected volatility - 99.18%, risk-free interest rate - 3.61% and
an expected average life of 2 years.
Ocean Partners acquired 691,666
units for consideration of $249,000 and Brendan Morris, an officer
of the Company, acquired 468,416 units for consideration of
$168,630.
c) Warrant reserve
The following table shows the
continuity of warrants for the periods presented:
|
|
|
Number
of
warrants
|
|
|
Weighted
average
exercise
price
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
|
24,051,900
|
|
$
|
0.45
|
|
|
Issued (notes 12(b)(i) and
15(a)(vi))
|
|
9,068,113
|
|
|
0.54
|
|
|
Exercised
|
|
(14,000
|
)
|
|
0.40
|
|
|
Expired
|
|
(250,000
|
)
|
|
0.50
|
|
|
Balance, March 31, 2023
|
|
32,856,013
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023 and March 31,
2024
|
|
19,658,904
|
|
$
|
0.54
|
|
The following table reflects the
actual warrants issued and outstanding as of March 31,
2024:
|
Expiry date
|
|
Number
of warrants
|
|
|
Grant
date
fair value
($)
|
|
|
Exercise
price
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 30, 2024
|
|
820,000
|
|
|
144,464
|
|
|
0.45
|
|
|
January 31, 2025
|
|
500,000
|
|
|
65,527
|
|
|
0.55
|
|
|
February 13, 2025
|
|
100,000
|
|
|
16,984
|
|
|
0.41
|
|
|
February 28, 2025
|
|
7,666,669
|
|
|
1,644,859
|
|
|
0.55
|
|
|
March 27, 2025
|
|
407,962
|
|
|
40,175
|
|
|
0.36
|
|
|
December 20, 2026
|
|
158,823
|
|
|
24,670
|
|
|
0.35
|
|
|
March 27, 2028
|
|
7,924,841
|
|
|
1,284,806
|
|
|
0.55
|
|
|
April 26, 2028
|
|
2,080,609
|
|
|
324,828
|
|
|
0.55
|
|
|
|
|
19,658,904
|
|
|
3,546,313
|
|
|
0.54
|
|
d) Stock options
The following table shows the
continuity of stock options for the periods
presented:
|
|
|
Number of
options
|
|
|
Weighted
average
exercise
price
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
|
6,152,500
|
|
$
|
0.78
|
|
|
Cancelled (i)
|
|
(177,500
|
)
|
|
0.71
|
|
|
Balance, March 31, 2023
|
|
5,975,000
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023
|
|
5,862,500
|
|
$
|
0.78
|
|
|
Expired
|
|
(85,000
|
)
|
|
0.90
|
|
|
Balance, March 31, 2024
|
|
5,777,500
|
|
$
|
0.78
|
|
(i) The portion of the estimated
fair value of options granted in the current and prior periods and
vested during the three months ended March 31, 2024, amounted to
$29,814 (three months ended March 31, 2023 - $183,723). In
addition, during the three months ended March 31, 2024, nil options
granted in the prior years were cancelled (three months ended March
31, 2023 - 177,500 options cancelled).
The following table reflects the
actual stock options issued and outstanding as of March 31,
2024:
|
Expiry date
|
|
Exercise
price ($)
|
|
|
Weighted average
remaining
contractual
life (years)
|
|
|
Number of
options
outstanding
|
|
|
Number of
options
vested
(exercisable)
|
|
|
Number of
options
unvested
|
|
|
June 27, 2024
|
|
0.90
|
|
|
0.24
|
|
|
100,000
|
|
|
100,000
|
|
|
-
|
|
|
May 19, 2026
|
|
0.86
|
|
|
2.13
|
|
|
3,635,000
|
|
|
3,635,000
|
|
|
-
|
|
|
June 21, 2026
|
|
0.73
|
|
|
2.22
|
|
|
425,000
|
|
|
425,000
|
|
|
-
|
|
|
August 27, 2026
|
|
0.86
|
|
|
2.41
|
|
|
20,000
|
|
|
20,000
|
|
|
-
|
|
|
May 3, 2027
|
|
0.60
|
|
|
3.09
|
|
|
1,597,500
|
|
|
1,065,000
|
|
|
532,500
|
|
|
|
|
0.78
|
|
|
2.37
|
|
|
5,777,500
|
|
|
5,245,000
|
|
|
532,500
|
|
13. Net Loss per Common Share
The calculation of basic and diluted
loss per share for the three months ended March 31, 2024 was based
on the loss attributable to common shareholders of $653,616 (three
months ended March 31, 2023 - $1,393,614) and the weighted average
number of common shares outstanding of 114,732,865 (three months
ended March 31, 2023 - 103,893,399) for basic and diluted loss per
share. Diluted loss did not include the effect of 19,658,904
warrants (three months ended March 31, 2023 - 32,856,013) and
5,777,500 options (three months ended March 31, 2023 - 5,975,000)
for the three months ended March 31, 2024, 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 months
ended March 31, 2024 totalled approximately US$207,000
(CAD$279,897) (three months ended March 31, 2023 - US$255,000
(CAD$419,169). 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
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2024
|
|
|
2023
|
|
|
Interest on related party
loans
|
(i)
|
$
|
143,307
|
|
$
|
173,665
|
|
(i) Refer to note
15(a)(iv).
(ii) Refer to note
12(b).
(iii) Refer to note
11.
(iv) As at March 31, 2024, the
Company owes Ocean Partners $3,422,239 (December 31, 2023 -
$5,673,150) which is recorded as due to related parties on the
unaudited condensed interim consolidated statement of financial
position.
|
|
|
March 31,
|
|
|
December
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
Balance, beginning of
period
|
$
|
5,673,150
|
|
$
|
4,978,069
|
|
|
Converted to convertible debentures
(note 11)
|
|
(2,575,382
|
)
|
|
-
|
|
|
Repayment
|
|
-
|
|
|
(24,735
|
)
|
|
Accretion
|
|
-
|
|
|
116,569
|
|
|
Interest
|
|
123,338
|
|
|
729,033
|
|
|
Foreign exchange
adjustment
|
|
201,133
|
|
|
(125,786
|
)
|
|
Balance, end of period
|
|
3,422,239
|
|
|
5,673,150
|
|
|
Less
current balance
|
|
(3,422,239
|
)
|
|
(5,673,150
|
)
|
|
Due
to related parties - non-current balance
|
$
|
-
|
|
$
|
-
|
|
(v) In February 2024, the loan
balance due to Ocean Partner was converted to convertible
debentures. Refer to note 11. As at March 31, 2024, balance related
to the loan is recorded as other liability on the unaudited
condensed interim consolidated statement of financial position is
$Nil (December 31, 2023 - $1,187,437).
|
|
|
March
31,
2024
|
|
|
December
31,
2023
|
|
|
Melquart Limited
|
|
|
|
|
|
|
|
Financing facilities, beginning of
period
|
$
|
638,432
|
|
$
|
-
|
|
|
Financing facility
received
|
|
-
|
|
|
580,392
|
|
|
Less bonus warrants issued
|
|
-
|
|
|
(16,984
|
)
|
|
Accretion
|
|
2,123
|
|
|
7,077
|
|
|
Interest
|
|
19,969
|
|
|
64,095
|
|
|
Foreign exchange
adjustment
|
|
10,666
|
|
|
3,852
|
|
|
Balance, end of period
|
|
671,190
|
|
|
638,432
|
|
|
Less
current portion
|
|
(671,190
|
)
|
|
-
|
|
|
Due
to related parties - non-current balance
|
$
|
-
|
|
$
|
638,432
|
|
(b) Remuneration of officer and
directors of the Company was as follows:
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
(1)
|
$
|
92,121
|
|
$
|
113,334
|
|
|
Stock-based compensation
|
|
21,569
|
|
|
141,231
|
|
|
|
$
|
113,690
|
|
$
|
254,565
|
|
(1) Salaries and benefits include director fees. As at March 31,
2024, due to directors for fees amounted to $105,000 (December 31,
2023 - $140,000) and due to officers, mainly for salaries and
benefits accrued amounted to $133,969 (December 31, 2023 -
$25,106), and is included with due to related parties.
(c) As at March 31, 2024, the
issued shares of Galantas total 114,535,293. Ross Beaty owns
3,744,747 common shares of the Company or approximately 3.3% of the
outstanding common shares. Premier Miton owns 4,848,243 common
shares of the Company or approximately 4.2%. Melquart owns,
directly and indirectly, 28,140,195 common shares of the Company or
approximately 24.6% of the outstanding common shares of the
Company. G&F Phelps owns 5,353,818 common shares of the Company
or approximately 4.7%. Eric Sprott owns 10,166,667 common shares of
the Company or approximately 8.9%. Mike Gentile owns 6,217,222
common shares of the Company or approximately 5.4%.
Excluding the Melquart Ltd, Premier
Miton, Mr. Beaty, Mr. Phelps, Mr. Sprott and Mr. Gentile
shareholdings discussed above, the remaining 49% 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 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:
|
March 31, 2024
|
|
United
Kingdom
|
|
|
Canada
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
$
|
687,365
|
|
$
|
2,277,679
|
|
$
|
2,965,044
|
|
|
Non-current assets
|
$
|
27,638,714
|
|
$
|
1,732,558
|
|
$
|
29,371,272
|
|
|
Revenues
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023
|
|
United
Kingdom
|
|
|
Canada
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
$
|
1,831,473
|
|
$
|
2,376,856
|
|
$
|
4,208,329
|
|
|
Non-current assets
|
$
|
26,702,212
|
|
$
|
1,673,478
|
|
$
|
28,375,690
|
|
|
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
$520,762 (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. Event After the Reporting
Period
On April 29, 2024, the Company
granted 3,175,000 stock options to directors, officers, employees
and consultants of the Company to purchase common shares at $0.23
per share until April 29, 2029. The options will vest as to one
third immediately and one third on each of April 29, 2025 and April
29, 2026.
