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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Galantas Gold Corporation | LSE:GAL | London | Ordinary Share | CA36315W3012 | COM SHS NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 12.50 | 11.50 | 13.50 | 12.50 | 12.50 | 12.50 | 7,470 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gold Ores | 0 | -16.63M | -0.1448 | -1.38 | 22.97M |
From Apr 2019 to Apr 2024
TIDMGAL
RNS Number : 6209O
Galantas Gold Corporation
29 May 2015
GALANTAS GOLD CORPORATION
TSXV & AIM : Symbol GAL
GALANTAS REPORTS RESULTS FOR THE QUARTER ENDED MARCH 31, 2015
May 29th, 2015: Galantas Gold Corporation (the 'Company') announces its financial results for the Quarter ended March 31, 2015.
Financial Highlights
The Net Loss for the Quarter ended March 31, 2015 amounted to $ 414,099 which compared with a Net Loss of $501,200 for the Quarter ended March 31, 2014. Highlights of the first quarter 2015 results, which are expressed in Canadian Dollars, are:
Hot Features
Premium
Quarter Ended March 31
-------------------------------------------------------------------------------- ----------------------------------
All in CDN$ 2015 2014
-------------------------------------------------------------------------------- ------------- -------------------
Revenue $ 1,123 $ 0
-------------------------------------------------------------------------------- ------------- -------------------
Cost of Sales $ 69,997 $ 77,234
-------------------------------------------------------------------------------- ------------- -------------------
(Loss) before the undernoted $ (68,874) $ (77,234)
-------------------------------------------------------------------------------- ------------- -------------------
Amortization $ 52,293 $ 65,092
-------------------------------------------------------------------------------- ------------- -------------------
General administrative expenses $ 261,532 $ 272,181
-------------------------------------------------------------------------------- ------------- -------------------
(Gain) Loss on disposal of property, plant and equipment $ - $ (548)
-------------------------------------------------------------------------------- ------------- -------------------
Unrealized gain on fair value of derivative financial liability $ ( 8,000)
-------------------------------------------------------------------------------- ------------- -------------------
Foreign exchange loss $ 39,400 $ 88,141
-------------------------------------------------------------------------------- ------------- -------------------
Net (Loss) for the Quarter $ (414,099) $ ( 502,100)
-------------------------------------------------------------------------------- ------------- -------------------
Working Capital (Deficit) $ (3,677,040) $ (4,468,576)
-------------------------------------------------------------------------------- ------------- -------------------
Cash (loss)generated from operations before changes in non-cash working capital $ (501,088) $ (519,533)
-------------------------------------------------------------------------------- ------------- -------------------
Cash at March 31, 2015 $ 380,764 $ 59,616
-------------------------------------------------------------------------------- ------------- -------------------
Revenue for the quarter ended March 31, 2015 consisted of jewelry sales and amounted to CDN$ 1,123 (2014: CDN$ Nil). Following the suspension of production during 2013 there have not been any shipments of concentrates from the mine.
Cost of sales for the quarter ended March 31, 2015 amounted to CDN$ 69,997 (2014: CDN$ 77,234) and include production costs and inventory movements. Production costs were mainly in connection with the ongoing care and maintenance costs at the Omagh mine.
The Net Loss for the quarter ended March 31, 2015, amounted to CDN$ 414,099 (2014: Net Loss CDN$ 502,100).
The Company's cash balances March 31, 2015 amounted to CDN$ 380,764 which compared with CDN$ 59,616 at March 31, 2014. The Company working capital deficit at March 31, 2015 amounted to CDN$ 3,677,040 which compared with a deficit of CDN$ 4,468,576 at March 31, 2014. During the first quarter the Company completed a Private Placement for aggregate gross proceeds of approximately UKGBP 316,677 through the issuing of 10,599,999 new shares at a price of UKGBP 0.03/CDN$0.05727 per common share. The proceeds are to be used for working capital purposes and to finance the Company's continued commitments in regard to its underground planning application.
Production
Production at the Omagh mine remains suspended awaiting planning consent to continue operations underground. Due to continued delays in the planning process, management has made significant redundancies in the workforce, alongside other cost reduction measures.
During the first half of 2014 the Company carried out pilot tests with regards to the processing of tailing cells filled during the earlier operation of the mine. The results of these tests indicated that it is possible to successfully process the tailing cells. However a subsequent investigation of process economics suggested that the operation may best be carried out in conjunction with processing ore from the underground mine.
Exploration
The granting of a further two prospecting licences in the Republic of Ireland (ROI) during 2014 brought the total number of licences held in both Northern Ireland and the Republic of Ireland to eleven covering a total area to 766.5 square kilometres. Exploration work during 2014 which included detailed mapping and sampling, focused on four broad exploration targets which were identified based on the potential for mineralisation with consideration given to land accessibility and suitable exposure. Three of the target areas were within the original ROI licence block (Lough Derg) with the fourth being in the OM4 licence within Northern Ireland. During the first quarter of 2015 fieldwork commenced within three more recently acquired ROI licences. In addition results received from fieldwork on the OM4 licence were evaluated and formed the basis of the DETI licence report submitted later in the quarter.
Permitting
During 2012 the planning application for an underground mine together with the Environmental Impact Study in connection with the proposed underground development were submitted to the Planning Services. The Company has been advised that officials at the Northern Ireland Department of Environment (Planning) have now completed consultations, finalised its report and submitted it to the Minister of Environment for determination. The Company understands that the report contains a recommendation to approve the Company's application, though the Minister is not bound by the recommendation. The Company understands a decision is imminent. However it should be noted that the timeline for delivery of the determination is not within the control of the Company.
Roland Phelps, President & CEO, Galantas Gold Corporation, commented, "The robust results of the recent economic study, with the upcoming planning determination, which we expect to be positive, lead us to be confident about the establishment of a sound business based on the Omagh gold property. "
Annual General Meeting
The Annual and Special Meeting of the Company has been called for 11am on Thursday 25(th) June 2015. It will be held at DSA Corporate Services, Suite 1000, 36 Toronto Street, Toronto, Ontario, Canada.
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/6209O_-2015-5-29.pdf
Qualified Person
The financial components of this disclosure has been reviewed by Leo O' Shaughnessy (Chief Financial Officer) and the production, exploration and permitting components by Roland Phelps (President & CEO), 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.
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.
Enquiries
Galantas Gold Corporation
Jack Gunter P.Eng - Chairman
Roland Phelps C.Eng - President & CEO
Email: info@galantas.com
Website: www.galantas.com
Telephone: +44 (0) 2882 241100
Charles Stanley Securities (AIM Nomad & Broker)
Mark Taylor
Telephone +44 (0)20 7149 6000
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 As at
March 31, December 31,
2015 2014
--------------------------------------------------- ----------- ------------
ASSETS
Current assets
Cash $ 380,764 $ 20,259
Accounts receivable and prepaid expenses (note 4) 89,261 102,213
Inventories (note 5) 115,829 111,137
--------------------------------------------------- ----------- ------------
Total current assets 585,854 233,609
Non-current assets
Property, plant and equipment (note 6) 7,324,503 7,087,455
Long-term deposit (note 8) 565,020 542,130
Exploration and evaluation assets (note 7) 2,172,688 2,070,772
--------------------------------------------------- ----------- ------------
Total non-current assets 10,062,211 9,700,357
--------------------------------------------------- ----------- ------------
Total assets $ 10,648,065 $ 9,933,966
--------------------------------------------------- ----------- ------------
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities (note 9) $ 885,236 $ 869,322
Due to related parties (note 13) 3,377,658 3,095,983
--------------------------------------------------- ----------- ------------
Total current liabilities 4,262,894 3,965,305
Non-current liabilities
Decommissioning liability (note 8) 579,889 553,544
Derivative financial liability (note 10(c)) 392,000 368,000
--------------------------------------------------- ----------- ------------
Total non-current liabilities 971,889 921,544
--------------------------------------------------- ----------- ------------
Total liabilities 5,234,783 4,886,849
--------------------------------------------------- ----------- ------------
Capital and reserves
Share capital (note 10(a)(b)) 32,351,440 31,825,575
Reserves 6,858,729 6,604,330
Deficit (33,796,887) (33,382,788)
--------------------------------------------------- ----------- ------------
Total equity 5,413,282 5,047,117
--------------------------------------------------- ----------- ------------
Total equity and liabilities $ 10,648,065 $ 9,933,966
--------------------------------------------------- ----------- ------------
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
Going concern (note 1)
Contingent liability (note 15)
Approved on behalf of the Board:
"Ronald Phelps" , Director "Lionel J. Gunter" , Director
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months
Ended
March 31,
2015 2014
------------------------------------------------------------------------------ ---------- ----------
Revenues
Gold sales $ 1,123 $ -
Cost and expenses of operations
Cost of sales (note 12) 69,997 77,234
Depreciation (note 6) 52,293 65,092
------------------------------------------------------------------------------ ---------- ----------
122,290 142,326
------------------------------------------------------------------------------ ---------- ----------
Loss before the undernoted (121,167) (142,326)
------------------------------------------------------------------------------ ---------- ----------
General administrative expenses
Management and administration wages (note 13) 130,619 138,033
Other operating expenses 33,772 36,904
Accounting and corporate 15,396 14,627
Legal and audit 21,810 28,942
Shareholder communication and investor relations 30,217 25,604
Transfer agent 1,980 3,076
Director fees (note 13) 5,000 5,000
General office 1,981 2,322
Accretion expenses (note 8) 2,966 2,883
Loan interest and bank charges (note 13) 17,791 14,790
------------------------------------------------------------------------------ ---------- ----------
261,532 272,181
Other expenses
Gain on disposal of property, plant and equipment - (548)
Unrealized gain on fair value of derivative financial liability (note 10(c)) (8,000) -
Foreign exchange loss 39,400 88,141
------------------------------------------------------------------------------ ---------- ----------
31,400 87,593
------------------------------------------------------------------------------ ---------- ----------
Net loss for the period $ (414,099) $ (502,100)
------------------------------------------------------------------------------ ---------- ----------
Basic and diluted net loss per share (note 11) $ (0.01) $ (0.01)
------------------------------------------------------------------------------ ---------- ----------
Weighted average number of common shares outstanding - basic and diluted 81,747,570 51,242,015
------------------------------------------------------------------------------ ---------- ----------
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 Loss and Other Comprehensive Income
(Expressed in Canadian Dollars)
(Unaudited)
Three Months
Ended
March 31,
2015 2014
--------------------------------------------------------------- --------- ---------
Net loss for the period $ (414,099) $ (502,100)
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
Foreign currency translation differences 254,399 451,759
--------------------------------------------------------------- --------- ---------
Total comprehensive loss $ (159,700) $ (50,341)
--------------------------------------------------------------- --------- ---------
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,
2015 2014
------------------------------------------------------------------------------ --------- ---------
Operating activities
Net loss for the period $ (414,099) $ (502,100)
Adjustment for:
Depreciation 52,293 65,092
Foreign exchange (134,248) (84,860)
Gain on disposal of property, plant and equipment - (548)
Accretion expenses (note 8) 2,966 2,883
Unrealized gain on fair value of derivative financial liability (note 10(c)) (8,000) -
Non-cash working capital items:
Accounts receivable and prepaid expenses 12,952 151,206
Inventories (4,692) (15,437)
Accounts payable and other liabilities 15,914 (93,851)
Due to related parties 236,313 287,561
------------------------------------------------------------------------------ --------- ---------
Net cash used in operating activities (240,601) (190,054)
------------------------------------------------------------------------------ --------- ---------
Investing activities
Purchase of property, plant and equipment - (33,727)
Proceeds from sale of property, plant and equipment - 917
Exploration and evaluation assets (17,019) (9,381)
------------------------------------------------------------------------------ --------- ---------
Net cash used in investing activities (17,019) (42,191)
------------------------------------------------------------------------------ --------- ---------
Financing activities
Proceeds of private placement 607,062 -
Share issue costs (49,197) -
Advances from related parties 45,362 127,792
------------------------------------------------------------------------------ --------- ---------
Net cash provided by financing activities 603,227 127,792
------------------------------------------------------------------------------ --------- ---------
Net change in cash 345,607 (104,453)
Effect of exchange rate changes on cash held in foreign currencies 14,898 (2,548)
Cash, beginning of period 20,259 166,617
Cash, end of period $ 380,764 $ 59,616
------------------------------------------------------------------------------ --------- ---------
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 payments translation
capital reserve reserve Deficit Total
---------------------- ----------- -------------- ----------- ------------ ----------
Balance, December 31,
2013 $ 29,874,693 $ 5,471,109 $ 782,351 $ (28,118,061) $ 8,010,092
Net loss and other
comprehensive income
for the period - - 451,759 (502,100) (50,341)
---------------------- ----------- -------------- ----------- ------------ ----------
Balance, March 31,
2014 $ 29,874,693 $ 5,471,109 $ 1,234,110 $ (28,620,161) $ 7,959,751
---------------------- ----------- -------------- ----------- ------------ ----------
Balance, December 31,
2014 $ 31,825,575 $ 5,471,109 $ 1,133,221 $ (33,382,788) $ 5,047,117
Shares issued in
private placement
(note 10(b)(i)) 607,062 - - - 607,062
Warrants issued (note
10(b)(i)) (32,000) - - - (32,000)
Share issue costs (49,197) - - - (49,197)
Net loss and other
comprehensive income
for the period - - 254,399 (414,099) (159,700)
---------------------- ----------- -------------- ----------- ------------ ----------
Balance, March 31,
2015 $ 32,351,440 $ 5,471,109 $ 1,387,620 $ (33,796,887) $ 5,413,282
---------------------- ----------- -------------- ----------- ------------ ----------
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, 2015 (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 material uncertainties related to events or conditions that may cast significant 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 subsidiary Cavanacaw Corporation ("Cavanacaw"). Cavanacaw has a 100% shareholding in both Omagh Minerals Limited ("Omagh") and Flintridge Resources Limited ("Flintridge") who are engaged in the acquisition, exploration and development of gold properties, mainly in Omagh, Northern Ireland. The Omagh mine has an open pit mine, which is in production and reported as property, plant and equipment and an underground mine which is in the exploration stage and reported as exploration and evaluation assets. The production at the open pit mine was suspended later in 2013 due to falling grades and gold prices.
The going concern assumption is dependent upon the ability of the Company to obtain the following:
a. Planning permission for the development of an underground mine in Omagh; and
b. Securing sufficient financing to fund ongoing operational activity and the development of
the underground mine.
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.
As at March 31, 2015, the Company had a deficit of $33,796,887 (December 31, 2014 - $33,382,788). Management is confident that it will be able to secure the required financing to enable the Company to 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. Cavanacaw also has developed a premium jewellery business founded on the gold produced under the name Galántas Irish Gold Limited ("Galántas"). On April 1, 2014, Galántas amalgamated it's jewelry business with Omagh.
As at July 1, 2007, the Company's Omagh mine began production.
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.
The Company's operations include the consolidated results of Cavanacaw, and its wholly-owned subsidiaries Omagh, Galántas and Flintridge.
The Company's common shares are listed on the TSX Venture Exchange and London Stock Exchange AIM under the symbol GAL. The primary office is located at 36 Toronto Street, Suite 1000, Toronto, Ontario, Canada, M5C 2C5.
3. Basis of Preparation
Statement of compliance
The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee. 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 IFRSs issued and outstanding as of May 27, 2015 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, 2014. Any subsequent changes to IFRS that are given effect in the Company's annual consolidated financial statements for the year ending December 31, 2015 could result in restatement of these unaudited condensed interim consolidated financial statements.
Recent accounting pronouncement
IFRS 9 - Financial Instruments ("IFRS 9") was issued by the IASB in October 2010 and will replace IAS 39 - Financial Instruments: Recognition and Measurement ("IAS 39"). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. In July 2014, the IASB issued the final version of IFRS 9. The final amendments made in the new version include guidance for the classification and measurement of financial assets and a third measurement category for financial assets, fair value through other comprehensive income. The standard also contains a new expected loss impairment model for debt instruments measured at amortized cost or fair value through other comprehensive income, lease receivables, contract assets and certain written loan commitments and financial guarantee contracts. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. IFRS 9 will be effective for accounting periods beginning January 1, 2018. The Company is currently assessing the impact of this pronouncement.
4. Accounts Receivable and Prepaid Expenses
As at As at
March 31, December 31,
2015 2014
----------------------------------------------- --------- ------------
Sales tax receivable - Canada $ 4,493 $ 1,469
Valued added tax receivable - Northern Ireland 12,820 14,894
Accounts receivable 38,871 35,999
Prepaid expenses 33,077 49,851
----------------------------------------------- --------- ------------
$ 89,261 $ 102,213
----------------------------------------------- --------- ------------
The following is an aged analysis of accounts receivable:
As at As at
March 31, December 31,
2015 2014
-------------------------- --------- ------------
Less than 3 months $ 17,313 $ 16,363
3 to 12 months 13,146 11,316
More than 12 months 25,725 24,683
-------------------------- --------- ------------
Total accounts receivable $ 56,184 $ 52,362
-------------------------- --------- ------------
5. Inventories
As at As at
March 31, December 31,
2015 2014
------------------------ --------- ------------
Concentrate inventories $ 12,242 $ 11,746
Finished goods 103,587 99,391
------------------------ --------- ------------
$ 115,829 $ 111,137
------------------------ --------- ------------
6. Property, Plant and Equipment
Freehold Plant Mine
land and and Motor Office development
Cost buildings machinery vehicles equipment Moulds costs Total
----------- ---------- ---------- -------- --------- ------- ----------- -----------
Balance,
December
31, 2013 $ 2,949,209 $ 5,161,722 $ 79,723 $ 114,845 $ 64,115 $ 13,878,530 $ 22,248,144
Additions 2,087 - - 2,091 - 129,840 134,018
Disposals - (131,705) - (4,724) (64,115) - (200,544)
Transfer (585,067) - - - - 585,067 -
Foreign
exchange
adjustment 74,286 129,311 2,009 (920) - 349,581 554,267
----------- ---------- ---------- -------- --------- ------- ----------- -----------
Balance,
December
31, 2014 2,440,515 5,159,328 81,732 111,292 - 14,943,018 22,735,885
Foreign
exchange
adjustment 103,044 216,658 3,450 4,699 - 630,928 958,779
----------- ---------- ---------- -------- --------- ------- ----------- -----------
Balance,
March 31,
2015 $ 2,543,559 $ 5,375,986 $ 85,182 $ 115,991 $ - $ 15,573,946 $ 23,694,664
----------- ---------- ---------- -------- --------- ------- ----------- -----------
Freehold Plant Mine
land and and Motor Office development
Accumulated
depreciation buildings machinery vehicles equipment Moulds costs Total
------------- ---------- ---------- -------- --------- ------- ----------- -----------
Balance,
December 31,
2013 $ 1,364,975 $ 4,029,181 $ 57,034 $ 59,054 $ 64,115 $ 6,573,466 $ 12,147,825
Depreciation 14,465 211,554 4,520 7,274 - - 237,813
Disposals - (118,069) - (3,663) (64,115) - (185,847)
Impairment 558,982 78,812 12,926 24,213 - 2,495,269 3,170,202
Foreign
exchange
adjustment 30,630 98,907 1,323 (1,675) - 149,252 278,437
------------- ---------- ---------- -------- --------- ------- ----------- -----------
Balance,
December 31,
2014 1,969,052 4,300,385 75,803 85,203 - 9,217,987 15,648,430
Depreciation 6,245 44,647 385 1,016 - - 52,293
Foreign
exchange
adjustment 92,892 180,541 3,201 3,600 - 389,204 669,438
------------- ---------- ---------- -------- --------- ------- ----------- -----------
Balance,
March 31,
2015 $ 2,068,189 $ 4,525,573 $ 79,389 $ 89,819 $ - $ 9,607,191 $ 16,370,161
------------- ---------- ---------- -------- --------- ------- ----------- -----------
Freehold Plant Mine
land and and Motor Office development
Carrying
value buildings machinery vehicles equipment Moulds costs Total
--------- --------- --------- -------- --------- ------ ----------- ----------
Balance,
December
31, 2014 $ 471,463 $ 858,943 $ 5,929 $ 26,089 $ - $ 5,725,031 $ 7,087,455
--------- --------- --------- -------- --------- ------ ----------- ----------
Balance,
March
31, 2015 $ 475,370 $ 850,413 $ 5,793 $ 26,172 $ - $ 5,966,755 $ 7,324,503
--------- --------- --------- -------- --------- ------ ----------- ----------
7. Exploration and Evaluation Assets
Exploration and evaluation assets are expenditures for the underground mining operations in Omagh. The proposed underground mine is dependent on the ability of the Company to obtain the necessary planning permission.
Exploration
and
evaluation
Cost assets
---------------------------- -----------
Balance, December 31, 2013 $ 1,875,771
Additions 92,872
Foreign exchange adjustment 102,129
---------------------------- -----------
Balance, December 31, 2014 2,070,772
Additions 17,019
Foreign exchange adjustment 84,897
---------------------------- -----------
Balance, March 31, 2015 $ 2,172,688
---------------------------- -----------
Exploration
and
evaluation
Carrying value assets
--------------------------- -----------
Balance, December 31, 2014 $ 2,070,772
--------------------------- -----------
Balance, March 31, 2015 $ 2,172,688
--------------------------- -----------
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, 2015 based on a risk-free discount rate of 1% (December 31, 2014 - 1%) and an inflation rate of 1.50% (December 31, 2014 - 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, 2015, the estimated fair value of the liability is $579,889 (December 31, 2014 - $553,544). Changes in the provision during the three months ended March 31, 2015 are as follows:
As at As at
March 31, December 31,
2015 2014
----------------------------------------------- --------- ------------
Decommissioning liability, beginning of period $ 553,544 $ 528,810
Accretion 2,966 11,489
Foreign exchange 23,379 13,245
----------------------------------------------- --------- ------------
Decommissioning liability, end of period $ 579,889 $ 553,544
----------------------------------------------- --------- ------------
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, 2014 - GBP 300,000), of which GBP 300,000 was funded as of March 31, 2015 (GBP 300,000 was funded as of December 31, 2014) and reported as long-term deposit of $565,020 (December 31, 2014 - $542,130).
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, amounts payable for financing activities and professional fees activities.
As at As at
March 31, December 31,
2015 2014
--------------------------------------------- --------- ------------
Accounts payable $ 279,247 $ 306,359
Accrued liabilities 605,989 562,963
--------------------------------------------- --------- ------------
Total accounts payable and other liabilities $ 885,236 $ 869,322
--------------------------------------------- --------- ------------
The following is an aged analysis of the accounts payable and other liabilities:
As at As at
March 31, December 31,
2015 2014
--------------------------------------------- --------- ------------
Less than 3 months $ 209,801 $ 240,145
3 to 12 months 169,372 183,164
12 to 24 months 145,974 120,987
More than 24 months 360,089 325,026
--------------------------------------------- --------- ------------
Total accounts payable and other liabilities $ 885,236 $ 869,322
--------------------------------------------- --------- ------------
10. Share Capital and Reserves
On April 14, 2014, the Company completed the consolidation of its issued and outstanding common shares on the basis of one post-consolidated common shares for five pre-consolidated common shares. As part of the share consolidation all applicable references to the number of shares, warrants and stock options and their exercise price and per share information has been restated.
a) Authorized share capital
At March 31, 2015, 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, 2015, the issued share capital amounted to $32,351,440. The change in issued share capital for the periods presented is as follows:
Number of
common
shares Amount
---------------------------------------------- ---------- -----------
Balance, December 31, 2013 and March 31, 2014 51,242,015 $ 29,874,693
----------------------------------------------- ---------- -----------
Balance, December 31, 2014 76,697,155 $ 31,825,575
Shares issued in private placement (i) 10,599,999 607,062
Warrants issued (i) - (32,000)
Share issue costs - (49,197)
----------------------------------------------- ---------- -----------
Balance, March 31, 2015 87,297,154 $ 32,351,440
----------------------------------------------- ---------- -----------
(i) On February 16, 2015, the Company closed a private placement of 10,599,999 common shares at GBP 0.03 ($0.05727) per common share for gross proceeds of GBP 316,667 ($607,062). The common share issued are subject to a four month hold period. Commissions of $36,424 were paid in connection with the placement. The agent also received 636,000 broker warrants. Each broker warrant can be exercised for one common share at an exercise price of GBP 0.045 for a period of 3 years. A four month hold period applies from date of issue of the broker warrant, expiring June 17, 2015.
The fair value of the 636,000 broker warrants was estimated at $32,000 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 168.98%, risk-free interest rate -0.43% and an expected average life of 3 years. As a result of the exercise price of the broker warrants being denominated in a currency other than the functional currency, the broker warrants are considered a derivative financial liability.
c) Warrant reserve
The following table shows the continuity of warrants for the periods presented:
Weighted
average
Number of exercise
warrants price
---------------------------------------------- ---------- --------
Balance, December 31, 2013 and March 31, 2014 - $ -
---------------------------------------------- ---------- --------
Balance, December 31, 2014 10,330,000 $ 0.18
Issued (Note 10(b)(i)) 636,000 0.08
----------------------------------------------- ---------- --------
Balance, March 31, 2015 10,966,000 $ 0.18
----------------------------------------------- ---------- --------
The following table reflects the actual warrants issued and outstanding as of March 31, 2015:
Grant date Exercise Fair value
Number fair value price March 31, 2015
Expiry date of warrants ($) (GBP) ($)
------------------ ----------- ---------- -------- --------------
May 7, 2016 10,330,000 383,000 0.10 330,000
February 16, 2018 636,000 32,000 0.045 62,000
------------------- ----------- ---------- -------- --------------
10,966,000 415,000 0.10 392,000
------------------ ----------- ---------- -------- --------------
As a result of the exercise price of the warrants being denominated in a currency other than the functional currency, the warrants are considered a derivative financial liability. The warrants are revalued at each period end with any gain or loss in the fair value being record in the unaudited condensed interim consolidated statements of loss as an unrealized gain or loss on fair value of derivative financial liability.
On March 31, 2015, the fair value of the warrants was estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 157.47% to 165.40%; risk free interest rate of 0.50%; and an expected life of 1.10 years to 2.88 years. As a result, the fair value of the warrants was calculated to be $392,000 and the Company recorded an unrealized gain on fair value of derivative financial liability for the three months ended March 31, 2015 of $8,000.
d) Stock options
The following table shows the continuity of stock options for the periods presented:
Weighted
average
Number of exercise
options price
---------------------------------------------- --------- --------
Balance, December 31, 2013 and March 31, 2014 940,000 $ 0.50
----------------------------------------------- --------- --------
Balance, December 31, 2014 and March 31, 2015 940,000 $ 0.50
----------------------------------------------- --------- --------
There were no stock-based compensation for the three months ended March 31, 2015 and 2014.
The following table reflects the actual stock options issued and outstanding as of March 31, 2015:
Weighted average Number of
remaining Number of options Number of
Exercise contractual options vested options
Expiry date price ($) life (years) outstanding (exercisable) unvested
------------------ --------- ---------------- ----------- ------------- ---------
November 23, 2015 0.50 0.65 200,000 200,000 -
January 28, 2016 0.50 0.83 50,000 50,000 -
September 6, 2016 0.50 1.43 690,000 690,000 -
------------------- --------- ---------------- ----------- ------------- ---------
0.50 1.24 940,000 940,000 -
------------------ --------- ---------------- ----------- ------------- ---------
11. Net Loss per Common Share
The calculation of basic and diluted loss per share for the three months ended March 31, 2015 was based on the loss attributable to common shareholders of $414,099 (three months ended March 31, 2014 - $502,100) and the weighted average number of common shares outstanding of 81,747,570 (three months ended March 31, 2014 - 51,242,015) for basic and diluted loss per share. Diluted loss did not include the effect of warrants and options for the three months ended March 31, 2015 and 2014, as they are anti-dilutive.
12. Cost of Sales
Three Months
March 31,
2015 2014
---------------------- ------- -------
Production wages $ 24,532 $ 40,463
Oil and fuel 8,799 11,558
Repairs and servicing 15,167 6,324
Equipment hire 2,113 319
Royalties 9,236 8,978
Other costs 10,150 9,592
---------------------- ------- -------
Cost of sales $ 69,997 $ 77,234
---------------------- ------- -------
13. Related Party Disclosures
Related parties 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 fair value 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
March 31,
Note 2015 2014
-------------------------------- ----- ------- ------
Interest on related party loans (i) $ 16,610 $13,592
-------------------------------- ----- ------- ------
(i) G&F Phelps Limited ("G&F Phelps"), a company controlled by a director of the Company, had amalgamated loans to the Company of $2,482,988 (GBP 1,318,354) (December 31, 2014 - $2,338,872 - GBP 1,294,268) included with due to related parties bearing interest at 2% above UK base rates, repayable on demand and secured by a mortgage debenture on all the Company's assets. Interest accrued on related party loans is included with due to related parties. As at March 31, 2015, the amount of interest accrued is $243,979 (GBP 129,542) (December 31, 2014 - $218,113 -GBP 120,698).
(b) Remuneration of key management of the Company was as follows:
Three Months
March 31,
2015 2014
-------------------------- -------- -------
Salaries and benefits (1) $ 116,288 $114,798
-------------------------- -------- -------
(1) Salaries and benefits include director fees. As at March 31, 2015, due to directors for fees amounted to $60,000 (December 31, 2014 - $55,000) and due to key management, mainly for salaries and benefits accrued amounted to $590,691 (GBP 313,630) (December 31, 2014 - $483,998 - GBP 267,831), and is included with due to related parties.
(c) As of March 31, 2015, Kenglo One Limited ("Kenglo") owns 13,222,068 common shares of the Company or approximately 15.15% of the outstanding common shares of the Company. Roland Phelps, Chief Executive Officer and director, owns, directly and indirectly, 21,472,915 common shares of the Company or approximately 24.60% of the outstanding common shares of the Company. The remaining 60.25% 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 owner.
The Company is not aware of any arrangements that may at a subsequent date result in a change in control of the Company.
14. 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 Galántas. 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, 2015 United Kingdom Canada Total ------------------- -------------- -------- ---------- Current assets $ 412,229 $ 173,625 $ 585,854 Non-current assets 10,001,535 60,676 10,062,211 ------------------- -------------- -------- ---------- Revenues $ 1,123 $ - $ 1,123 ------------------- -------------- -------- ---------- December 31, 2014 United Kingdom Canada Total ------------------- -------------- ------- --------- Current assets $ 208,066 $ 25,543 $ 233,609 Non-current assets 9,639,643 60,714 9,700,357 ------------------- -------------- ------- --------- 15. Contingent Liability
During the year ended December 31, 2010, the Company's subsidiary Omagh received a payment demand from Her Majesty's Revenue and Customs in the amount of $573,100 (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. The Company believes this claim is without merit. An appeal has been lodged and the Company's subsidiary Omagh intends to vigorously defend itself against this claim. A hearing date for the appeal has not yet been determined. No provision has been made for the claim in the unaudited condensed interim consolidated financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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