Galantas Gold Corporation

Galantas Gold Corporation

March 12, 2009 11:00 ET

Trading Update: Galantas Reports Continued Progress at Omagh Gold-Mine

TORONTO, ONTARIO--(Marketwire - March 12, 2009) - Galantas Gold Corporation (the Company) (TSX VENTURE:GAL)(AIM:GAL) has received provisional results for the fourth quarter of 2008 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 last quarter of 2008 (ending December 31st) saw production of an estimated 434.4 wet tonnes (405.7 dry tonnes) of concentrate. Metals content of the quarter's shipments are expected to total 1371.6 ounces of gold (42.66 kgs), 3695.1 ounces of silver (114.93 kgs) and 50.19 tonnes of lead. Production for the last quarter of 2008, when compared with the last quarter of 2007, saw an increase of 21.7% in terms of (dry) concentrate output, a 46.9% increase in gold output, 67.8% increase in silver output and a 96% increase in lead output.

In January and February 2009 concentrate production was estimated at 133.77 wet tonnes (125.18 dry tonnes) and 185.13 wet tonnes (175.45 dry tonnes) respectively.

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.

As of early February, the road contractor has completed the current phase of surplus rock removal and removed his equipment. OML continues to have a good relationship with the contractor who has improved the standard of several of the access roads to the mine at his own cost. The impact of the equipment removal will negatively effect costs but this is moderated by the increased amount of plant now available on site.

A decision was made not to purchase three Bell trucks brought in for hire / potential purchase. Due to downward pressure on equipment prices, more competitive arrangements have been organised which make available additional Volvo trucks. An 85 tonne excavator, believed currently the largest available in Ireland, is on hire. In addition to increased loading capacity, this excavator is able to dig most virgin rock without pre ripping (a function previously undertaken by the road contractor's bull-dozer). Active consideration is being given to the up-rating and addition of some items of mobile pit equipment, if financing proves available, as two near-term, existing leasing commitments expire shortly (March and May 2009 respectively).

Surface stripping and preparation during the fourth quarter of 2008 has extended the length of the open pit to its permitted maximum under planning controls. Manpower on site has been increased to 39 with the additional labour directed to working extra equipment in the pit. Re-routing of power lines prior to development of phase 2 extraction is in progress and it is expected that this work will be completed within the required time frame.

Process plant operating hours have been increased to 128 hours per week, organised as a five day week with one Saturday shift. The shift pattern has been modified to allow for greater labour flexibility. During the first week of January the process plant ball mill was re-lined.

The average monthly price of gold expressed in British Pounds Sterling has continued to remain strong with a record average of over Pounds Sterling 640 per troy ounce in February 2009, due to the weakness of Sterling and the strong price of gold in US Dollars.

The Company has changed Auditors to McCarney Greenwood LLP, Chartered Accountants.

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 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 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 and CEO
    +44 (0) 2882 241100
    Blomfield Corporate Finance Limited
    Nick Harriss
    +44 (0) 207 489 4500
    Lewis Charles Securities Limited
    Kealan Doyle
    +44 (0) 207 456 9100
    Lewis Charles Securities Limited
    Nicholas Nicolaides
    +44 (0) 207 456 9100