Galantas Gold Corporation
TSX VENTURE : GAL
AIM : GAL

Galantas Gold Corporation

October 03, 2007 10:00 ET

Galantas Details Falconbridge Payments and Goldsmiths Order

TORONTO, ONTARIO--(Marketwire - Oct. 3, 2007) - Galantas Gold Corporation (TSX:GAL)(AIM:GAL) (the Company), which has a 100% interest in Ireland's only gold mine, has today given further detail of its contract with Falconbridge Ltd, a subsidiary of Xstrata plc (Falconbridge).

The contract provides for payments by Falconbridge of a provisional sum, at 80% of estimated shipment contractual value, for containers of flotation concentrate, 15 days after the containers are loaded onboard ship at Belfast port. The remaining 20 % of the contractual value falls due and is payable 15 days after the "Quotational Period". The "Quotational Period" is the third month after delivery and it is the average metal price in that month which is used to fix the contractual value of the shipment. The contract includes fixed treatment charges that are payable to Falconbridge on a tonnage basis, charges related to the amount of metals (gold, silver and lead) present, fixed transport charges and deductions for any deleterious elements. Revenues are payable to the Company at the rate of 95 % of the gold, silver and lead values present less the Falconbridge fixed and variable charges.

Following analysis of samples taken by an independent sampler, there is a written protocol which averages samples or allows for umpire analysis as necessary.

There have been 28 containers shipped to Falconbridge up to September 27, 2007 containing 640.4 wet tonnes. The amount received in interim payments (80% of estimated contractual value) as of 28th September 2007 is $522,605 in US Funds. The estimated gross value of shipments to date of the press release is $835,466 USD with individual container value averaging $30,430 USD. This includes amounts related to containers 1-4, 6, & 8-30. Since the end of the second quarter, 18 containers have been shipped (up to September 26, 2007). The revenue from these containers is estimated at $500,046 USD, of which $400,037 USD is due as the interim payment with $254,269 USD already been received. None of these figures include value for 3 containers sent for separate gold processing as feedstock for the jewellery business. The approximate value of the flotation and gravity concentrate within the 3 containers, were they to have been sold to Falconbridge instead of being processed, is estimated at $54,625 USD. It is strongly emphasised that all the estimated values contained in this disclosure are approximate only and are subject to change or confirmation by the protocol. The revenues from concentrate sale will partially offset development costs.

Concentrate grades achieved to date are less than those anticipated by laboratory test-work. Increased operator experience and additional plant modifications are expected to make improvements. Lower concentrate grade adversely affects concentrate revenue because of the fixed treatment costs and shipping charges noted above.

Plant operation has continued to improve in terms of productivity. Since June 26th, 2007, the date of the last Trading Update, until September 26th 2007, 20 containers have been shipped, containing approximately 466.2 wet tonnes of flotation concentrate. The total number of containers shipped to date total 31 containing approximately 710.0 wet tonnes of concentrate. A graph demonstrating the productivity of the mill on a weekly basis will be published on www.galantas.com.

The processing of 45.7 tonnes (2 containers) of concentrate by a specialist laboratory has been completed and a total of 4.45kgs unrefined gold bullion (dore) has been received. The shipment has been transferred to refiners for the production of certified Irish gold suitable for the jewellery business. Approximately half of the refining is complete and that portion is undergoing manufacture by Galantas' jewellery contractors.

Advance orders have been received from Goldsmiths Group plc and UK and Irish-based independent retailers in excess of Pounds Sterling 150,000 (CDN$303,000). This was above expectation and "free" gold production (that small percentage of the mine's gold output that can be produced as dore on site) is being up-rated. Goldsmiths are expected to launch selected items from the Galantas product range in 15 United Kingdom shops in November. Included are stores in Brent Cross - North London, the Metro Centre - Gateshead, Leeds, Cambridge, Cardiff, Liverpool, Glasgow and Birmingham.

The total number of retailers is expected to number between 25 and 30 by the end of 2007.

Galantas Gold Corporation Issued and Outstanding Shares following the placing total 175,675,855.

This press release includes certain "Forward-Looking Statements" within the meaning of the US Private Securities Reform Act of 1995. Other than statements of historical fact, all statements, such as but not limited to the number of retailers or locations of retailers or estimated values of concentrates, are "Forward-Looking Statements" that involve such various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "Forward-Looking Statements".

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release.

Contact Information

  • Galantas Gold Corporation
    Jack Gunter P.Eng
    Executive Chairman
    +44 (0) 2882 241100
    or
    Galantas Gold Corporation
    Roland Phelps C.Eng
    President & CEO
    +44 (0) 2882 241100
    Email: info@galantas.com
    Website: www.galantas.com
    or
    ARM Corporate Finance Limited
    Nick Harriss
    +44 (0) 20 7512 0191
    or
    Lewis Charles Securities Limited
    Kealan Doyle
    +44 (0) 207 456 9100