Galantas Gold Corporation

Galantas Gold Corporation

May 21, 2009 10:00 ET

Galantas Further Upgrades Mining Equipment and Increases Production

TORONTO, ONTARIO--(Marketwire - May 21, 2009) - Galantas Gold Corporation (the Company)(TSX VENTURE:GAL)(AIM:GAL) has received provisional results for the first quarter of 2009 from its wholly owned subsidiary Omagh Minerals Limited (OML). OML operates the only gold mine in Ireland and produces a concentrate containing gold, silver and lead.

The first quarter of 2009 (ending March 31st) saw production of an estimated 511 wet tonnes (481 dry tonnes) of concentrate. Metals content of the quarter's shipments are expected to total approximately 1511 ounces of gold (47 kgs), 4786 ounces of silver (148.9 kgs) and 42.2 tonnes of lead.

Production for the first quarter of 2009, when compared with the first quarter of 2008, saw an increase of 37.4% in terms of (dry) concentrate output, a 48.3% increase in gold output, 119% increase in silver output and a 22.3% increase in lead output. When compared with the last quarter of 2008, gold output increased by 10%, silver output increased by 29.5% and lead output decreased by 15.8%.

Mill output for the first half of April was stopped by the breakdown of a ball mill gearbox. Although acquired new and specified for the task, the gearbox required to be completely rebuilt and there were delays in obtaining parts from continental Europe over the Easter holiday. Measures to obtain a spare of this critical single line component are underway. Production was increasing before the breakdown and this trend has continued after with 250 wet tonnes of concentrate being produced in the four week period operated since the breakdown.

The production figures and metal contents are provisional and subject to averaging or umpiring provisions under the concentrate off-take contract with Xstrata Corporation detailed in a press release dated 3rd October 2007.

Galantas announced in a Trading Update on 12th March 2009 that it was looking to enhance mining output by up-rating and adding equipment. With that intent, an additional, high capacity, Hitachi EX800H excavator and two, Volvo A40, articulated dump-trucks have been made available, on a commercial rental / purchase arrangement, by G&F Phelps Ltd, a company controlled by Roland Phelps, President & CEO of Galantas, and have been delivered to the Omagh site. This allows the stripping of overburden covering the Kerr Vein to commence following an overhaul of OML's Volvo EC 460 excavator. A time frame of two months has been budgeted for the Kerr stripping operation. The Hitachi EX850 excavator previously reported (12th March 2009) remains on long term hire. With the exception of the related party, who stood aside from the decision, the Directors of the Company have consulted with the Nominated Adviser and consider the terms of the rental / purchase arrangement to be fair and reasonable in so far as shareholders are concerned.

Power line removal works by Northern Ireland Electricity (NIE) have been completed. Over 100 extra trees have been planted to cover lines of sight opened up by safety coppicing work carried out by NIE. These are in addition to approximately 12,000 trees already planted within landscaping near land ownership boundaries.

In early May, the Company was grateful for the opportunity to meet with the Minister of the Environment for Northern Ireland (Mr. Sammy Wilson) and senior members of the planning service. The Minister was briefed on the work of the company to date and was advised that the Company will rely on new planning permissions and revisions to existing planning permissions in order to safeguard and develop operations and to utilise the prospecting work undertaken by the Geological Survey of Northern Ireland.

This disclosure has been reviewed by Nicholas Hardie C.Eng FIMMM, (General Manager), a qualified person under the meaning of N.I 43-101, who is responsible for the technical information in this disclosure. The information is based upon local production and financial data prepared by management under his supervision.

Galantas Gold Corporation Issued and Outstanding Shares total 190,100,055.

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 cost and production 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, performance or achievements to differ materially from those expressed or implied by the forward looking statements, including: gold price volatility; discrepancies between actual and estimated production, between actual and estimated reserves, and between actual and estimated metallurgical recoveries; mining operational risk; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign involvement; speculative nature of gold exploration; dilution; competition; loss of key employees; additional funding requirements; and defective title to mineral claims or property. These factors and others that could affect Galantas's forward-looking statements are discussed in greater detail in the section entitled "Risk Factors" in Galantas' Management Discussion & Analysis of the financial statements of Galantas and elsewhere in documents filed from time to time with the Canadian provincial securities regulators and other regulatory authorities. These factors should be considered carefully, and persons reviewing this press release should not place undue reliance on forward-looking statements. Galantas has no intention and undertakes no obligation to update or revise any forward-looking statements in this press release, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Galantas Gold Corporation
    Jack Gunter P.Eng
    +44 (0) 2882 241100
    Galantas Gold Corporation
    Roland Phelps C.Eng
    President and CEO
    +44 (0) 2882 241100
    Blomfield Corporate Finance Limited
    Nick Harriss
    +44 (0) 207 489 4500
    Lewis Charles Securities Limited
    Kealan Doyle & Nicholas Nicolaides
    +44 (0) 207 456 9100