Galantas Gold Corporation

Galantas Gold Corporation

November 28, 2011 09:00 ET

Galantas Reports Results for Third Quarter 2011

TORONTO, ONTARIO--(Marketwire - Nov. 28, 2011) - Galantas Gold Corporation (TSX VENTURE:GAL)(AIM:GAL) (the 'Company') results for the three and nine months ended September 30, 2011 have been published.

Net Income for the three months ended September 30, 2011 amounted to CAD$ 445,646 compared to a Net Income of CAD$ 206,069 for the three months ended September 30, 2010. When Net Income is adjusted for non-cash items on the Income Statement (before changes in non-cash working capital), the cash generated from operating activities amounted to CAD$ 792,682 for the third quarter of 2011 compared to CAD$ 358,514 for the third quarter of 2010.

Net Income for the nine months ended September 30, 2011 amounted to CAD$ 1,165,045 compared to a Net Income of CAD$ 810,934 for the nine months ended September 30, 2010. When Net Income is adjusted for non cash items on the Income Statement (before changes in non-cash working capital), the cash generated from operating activities amounted to CAD$ 2,001,466 for the first nine months of 2011 compared to CAD$ 1,538,537 for the first nine months of 2010.

The main reason for the improved results was the higher gold prices achieved together with increased production at its Northern Ireland subsidiary during 2011. Gains were partially offset, however, by an increase in costs during the two intervals.

Production at the Omagh mine during the three months ended September 30, 2011 was well above production levels achieved during both the first quarter of 2011 and the corresponding third quarter of 2010 but below the record quarterly production achieved during the second quarter of 2011. The three and nine-month figures to September 30, 2011 and their comparative 2010 figures are summarized in the table below.

Three Months to September 30 2011 Three Months to September 30 2010 Nine Months to September 30 2011 Nine Months to September 30 2010
Tonnes Milled 13,707 8,375 36,539 29,729
Average Grade g/t gold 4.34 4.75 4.73 4.73
Concentrate Dry Tonnes 545 309 1,582 1,226
Gold Grade (concentrate) 91.2 131 98.3 119.9
Gold Produced (oz) 1,597 1,303 5,007 4,729
Gold Produced (kg) 49.6 40.5 155.6 147.1
Silver Grade 236.5 296.1 239.4 337.6
Silver Produced (oz) 4,142 2,942 12,176 13,299
Silver Produced (kg) 128.8 91.5 378.7 413.6
Lead Produced tonnes 56.3 51 227 202.4
Gold Equivalent (oz) 1,766 1,426 5,658 5,283

The 2011 production figures and metal contents are provisional and subject to averaging or umpiring provisions under the concentrate off - take agreement detailed in a press release dated October 3, 2007.

Highlights of the 2011 third quarter and first nine months results, which are expressed in Canadian Dollars (CAD$), are:

All figures denominated in Canadian Dollars (CAD$) Third Quarter Ended September 30
Nine Months Ended September 30
2011 2010 2011 2010
Revenue 2,510,985 1,759,978 6,979,698 5,244,089
Cost of Sales 1,247,229 1,118,807 3,621,382 3,125,974
Amortization 222,079 133,961 603,939 579,847
Income (loss) before the undernoted 1,041,677 507,210 2,754,377 1,538,268
General administrative expenses 655,568 250,566 1,647,918 698,390
Foreign exchange/(gain) loss (59,537 ) 50,575 (58,586 ) 28,944
Net Income for the period 445,646 206,069 1,165,045 810,934

During the third quarter, Omagh Minerals Limited ('OML') received an environmental compliance study conducted by the Northern Ireland Environment Agency. The report confirmed that OML continued to be within terms of its consent and met the relevant Environmental Quality Standards.

The Company notes that a further delay has been introduced into the planning process regarding road transport of surplus rock. The application is recommended for approval by the Planning Service, Department of Environment, Northern Ireland but has not yet been determined. OML does not have clarity as to a timetable for removal of surplus rock, for which storage at the mine site is limited. Consequently an employment review is continuing which is likely to lead to a reduction in the number of employees, via redundancy procedures (after statutory consultation is complete), due to a switch to the processing of lower grade material.

An active program of drilling is taking place to assess the gold and silver mineralisation at depth on the Omagh property in order to examine potential for underground mining. During 2011 (to the end of the third quarter), a total of 2558.6 metres has been drilled and a total of 33 drill holes completed. Detailed financial studies have been carried out to estimate the cost of underground development and these studies will be released in conjunction with a revised resource report for the property. The report will comment upon the financial studies and be to a standard suitable for publication in Canada (National Instrument 43-101). An interim report is scheduled for late spring 2012.

Plans to develop an underground mine are at an advanced stage and are expected to be submitted for permitting around the end of 2011. The plans include a cut and cover adit within the backfilled open pit (being currently worked), with a spiral decline to the base of a proposed Phase 1 Underground Mine, and a raise-bored shaft to provide emergency egress and ventilation. The principal mining method proposed is shrinkage-stoping and long term stability will be assured by backfilling with waste rock and clean tailing sands. Potentially the mine may progress to deeper levels than that planned for Phase 1 but this will be subject to the identification of further resources by drilling. The current drilling program is designed to identify resources to approximately 350 metres below surface, for a potential Phase 1 mine. Permitting procedures have been commenced in conjunction with continued drilling to enable an earlier determination of planning permits.

An Environmental Impact Assessment (EIA), based upon new data and that from 14 years of environmental monitoring, is being drawn up to be submitted to Planning Service, Northern Ireland. The EIA considers the processes involved, including impact on water, air and noise, amongst other environmental factors.

The detailed results and Management Discussion and Analysis (MD&A) are available on and 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.

This disclosure has been reviewed by Leo O' Shaughnessy (Chief Financial Officer) and Roland Phelps (President and CEO), who are qualified under the meaning of N.I 43-101 and who have also reviewed this release for the purposes of AIM requirements. The information is based upon financial and operating 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, the commercial viability of processing lower grade material, 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; 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.

Galantas Gold Corporation Issued and Outstanding Shares total 235,650,055.

Neither 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 release.

Contact Information

  • Galantas Gold Corporation
    Jack Gunter P.Eng
    +44 (0) 2882 241100

    Galantas Gold Corporation
    Roland Phelps C.Eng
    President & CEO
    +44 (0) 2882 241100

    Maclir Consulting Ltd
    Courtenay Heading
    Investor Relations Consultant
    (UK) +44 (0) 7624 424 455

    Religare Capital Markets
    Ben Jeynes
    +44 (0) 20 7444 0800

    Beaufort International Associates Ltd
    Barry Gibb/Saif Janjua
    Corporate Finance
    +44 (0) 20 7930 8222