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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 | 650 | 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 : 2875U
Galantas Gold Corporation
22 November 2019
GALANTAS GOLD CORPORATION
TSXV & AIM: Symbol GAL
GALANTAS REPORTS RESULTS FOR THE THREE AND NINE MONTHSED SEPTEMBER 30, 2019
November 22, 2019 : Galantas Gold Corporation (the 'Company') is pleased to announce its financial results for the Three and Nine months ended September 30, 2019.
Financial Highlights
Highlights of the 2019 third quarter's and first nine month's results, which are expressed in Canadian Dollars, are summarized below:
Hot Features
Premium
All figures denominated in Canadian Dollars (CDN$)
Third Quarter Ended Nine Months Ended
September 30 September 30
2019 2018 2019 2018
Revenue (from jewellery gold sales) $ 5,788 $ 14,203 $ 5,788 $ 71,243
Cost and expenses of operations $ (37,098) $ (42,365) $ (192,606) $ (100,581)
Loss before the undernoted $ (31,310) $ (28,162) $ (186,818) $ (29,338)
Depreciation $ (93,865) $ (77,394) $ (280,355) $ (219,623)
General administrative expenses $ (606,535) $ (576,256) $ (1,855,345) $ (1,601,299)
Unrealized gain on fair value of derivative financial
liability $ 0 $ 0 $ 0 $ 10,000
Foreign exchange gain/(loss) $ 13,664 $ (24,905) $ (66,908) $ (91,465)
Net Loss for the period $ (718,046) $ (706,717) $ (2,389,426) $ (1,931,725)
Working Capital Deficit $ (5,108,181) $ (5,237,069) $ (5,108,181) $(5,237,069)
Cash loss from operating activities before changes in
non-cash working capital $ (514,132) $ (429,393) $ (1,578,613) $ (1,191,733)
Cash at September 30 (2019 & 2018) $ 1,356,147 $ 1,259,642 $ 1,356,147 $ 1,259,642
Provisional Revenues from concentrate sales offset
against Development Assets. $519,000 $ 0 $978,000 $ 0
The Net Loss for the three months ended September 30, 2019 amounted to CDN$ 718,046 (2018 Q3: CDN$ 706,717) and the cash loss from operating activities before changes in non-cash working capital for the third quarter of 2019 amounted to CDN$ 514,132 (2018 Q3: CDN$ 429,393). The Net Loss for the nine months ended September 30, 2019 amounted to CDN $ 2,389,426 (2018: CDN$ 1,931,725) and the cash loss from operating activities before changes in non-cash working capital for the first nine months of 2019 amounted to CDN$ 1,578,613 (2018: CDN$ 1,191,733).
The Company had cash balances of $ 1,356,147 at September 30, 2019 compared to $ 1,259,642 at September 30, 2018. The working capital deficit at September 30, 2019 amounted to $ 5,108,181 compared to a working capital deficit of $ 5,237,069 at September 30, 2018.
Shipments of concentrate under the off-take arrangements commenced during the second quarter. Provisional revenues from concentrate sales during the three and nine months ended September 30, 2019 totaled approximately US$ 519,000 and US$ 978,000 respectively. However, until the mine reaches the commencement of commercial production, the net proceeds from concentrate sales will be offset against Development assets.
During the third quarter of 2019 the Company completed a part brokered private placement of 23,529,412 common shares, at an issue price of UKGBP0.0425 ($0.068) per share for gross proceeds of UKGBP1,000,000 ($ 1,600,000). A four month plus one day hold period apply to the shares and the shares rank pari passu with the existing shares in issue of the Company. The net proceeds raised by the placement are intended to be used to implement recently identified optimization initiatives at the Omagh gold mine, including increased mechanization and improved underground infrastructure, as well as for general working capital of the Company.
Subsequent to September 30, 2019 Galantas announced a temporary suspension of blasting operations at its Omagh gold mine (see press release dated October 29, 2019). Blasting operations are currently limited, since all blasting must be supervised by the Police Service of Northern Ireland (PSNI). Presently the blasting arrangements are not sufficient for the desired level of operations. The Company has been working with the authorities to increase blasting availability to normal levels for an underground mine. Progress has been made and substantive investment made in accordance with recommendations, however, the Company is still awaiting final approvals from the authorities in order to be able to implement its increased blasting protocols. The Company has been waiting for some time for these approvals and although the Company expects to receive the approvals based on previous discussions with the relevant authorities, a date for receipt of the required approvals and therefore the date on which implementation of the increased blasting schedule is not yet known. The current arrangements are not sufficient to allow for the expansion of mine operations as envisaged by the Company's existing mine plan and until changes are agreed, the present inefficiencies caused by those arrangements form an increasing financial burden, which has proved a significant drain on the financial resources of the Company. Accordingly, in order to reduce costs, while some mine operations will continue at the Omagh gold mine, consultation with the workforce is underway regarding a reduction in the numbers employed.
Subsequent to announcement of the temporary suspension of blasting, progress has been made with the authorities and the Company continues to work towards a resolution of the matter.
The processing plant, which uses non-toxic flotation processing to provide a concentrate, is expected to continue to operate in the near term and is being fed from underground stock. The mine operates within regulated environmental constraints and has a zero lost time incident record.
In light of the economic impingement on the Company's operations, the Company is beginning to seek strategic alternatives including reviewing its licenses and operations; and considering the possibility of engaging in a joint venture or other options with third parties and alternative financing structures. The Company expects it will have to raise funds within the next six months and will update the market in due course.
Production/Mine Development
During the third quarter of 2019 the Omagh gold mine continued limited production of gold concentrate from feed produced in the development of the Kearney vein. The plant, which produces a gold & silver concentrate using a non-toxic, froth-flotation process, is running on a batch basis from a stockpile of underground vein material plus additional feed produced from on-vein development operations.
Underground development of the decline tunnel continued to be progressed during the third quarter of 2019 with further crosscuts allowing access to lower levels of vein development which forms the development necessary to demarcate production panels. On-vein development continued on the 1084 (second) level and the 1072 (third) level continued. The vein on the 1072 (third) was reached early in the second quarter and on vein development has commenced. Development has continued southwards on the third (1072) level with gold grades within the expected range.
During the quarter the Company reported that the access drive on the fourth (1060) level has intersected the Kearney vein ahead of schedule. The intersection shows strongly developed mineralization. The north and south faces of the vein were channel sampled. The average of the two channels was 8.35 g/t gold over an average true width of 2.65 metres. The vein intersection is expected to allow in-vein development both north and south on the fourth (1060) level. Development on the fourth level is anticipated to produce increased feed tonnage to the processing plant, which produces a concentrate sold under an off-take contract. The Company also reported that drivage from the 1072 access has been taken northwards, in-vein, for approximately 40 metres. Mineralisation beyond the first 20 metres is currently excluded from the geological model, due to paucity of data. The mineralization was shown to be persistent and has been followed in an in-vein development. Two channel samples, taken across the face as the drivage was developed at 24.1m and 27.6m into the third level (1072) north development, showed a grade of 6.2g/t gold and 16.3 g/t gold respectively, each with a true width of 3 metres. The vein will continue to be followed northwards on the third (1072) level and elevates potential for additional mineralisation to be added to the resource model if discovered on the adjacent first (1096), second (1084) and fourth (1060) levels, which have not yet accessed this area. To date some two kilometres of underground drivages have been developed, with exposure of the main Kearney vein on four levels. A fifth level is near the point of intersection. The mine is serviced by a decline tunnel of 1 in 6 gradients, of dimensions approximately 4.5m by 4.5m. Recent vein intersections on the 1060 (fourth) level have proven to be strongly mineralized with vein sections some 3 metres wide and of grade mapped at over 10g/t gold.
Milling operations progressed during the third quarter of 2019 on an extended dayshift basis, as feed became available. Additional milling shifts which were expected to be added in the fourth quarter, will not be added until increased underground blasting arrangements are implemented. The processing plant, which was used formerly for open-pit operations, has had the benefit of a recent upgrade and further upgrades are planned. Recent analyses suggest that the product from the plant meets quality criteria and operates at a high efficiency.
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/2875U_1-2019-11-21.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
Roland Phelps C.Eng - President & CEO
Email: info@galantas.com
Website: www.galantas.com
Telephone: +44 (0) 2882 241100
Grant Thornton UK LLP (Nomad)
Philip Secrett, Richard Tonthat, Harrison Clarke:
Telephone: +44(0)20 7383 5100
Whitman Howard Ltd (Broker & Corporate Adviser)
Nick Lovering, Grant Barker:
Telephone: +44(0)20 7659 1234
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
September 30, December 31,
2019 2018
------------------------------------------------------- ------------- ------------
ASSETS
Current assets
Cash and cash equivalents $ 1,356,147 $ 6,188,554
Accounts receivable and prepaid expenses (note 4) 464,561 287,273
Inventories (note 5) - 11,335
------------------------------------------------------- ------------- ------------
Total current assets 1,820,708 6,487,162
Non-current assets
Property, plant and equipment (note 6) 19,886,574 16,487,501
Long-term deposit (note 8) 488,700 523,170
Exploration and evaluation assets (note 7) 736,507 760,023
------------------------------------------------------- ------------- ------------
Total non-current assets 21,111,781 17,770,694
------------------------------------------------------- ------------- ------------
Total assets $ 22,932,489 $ 24,257,856
------------------------------------------------------- ------------- ------------
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities (note 9) $ 2,263,359 $ 2,257,329
Current portion of financing facilities (note 10) 374,670 382,974
Due to related parties (note 14) 4,290,860 4,119,642
------------------------------------------------------- ------------- ------------
Total current liabilities 6,928,889 6,759,945
Non-current liabilities
Non-current portion of financing facilities (note 10) 1,083,499 1,081,190
Decommissioning liability (note 8) 547,860 578,242
------------------------------------------------------- ------------- ------------
Total non-current liabilities 1,631,359 1,659,432
------------------------------------------------------- ------------- ------------
Total liabilities 8,560,248 8,419,377
------------------------------------------------------- ------------- ------------
Capital and reserves
Share capital (note 11(a)(b)) 50,134,215 48,628,055
Reserves 8,380,191 8,963,163
Deficit (44,142,165) (41,752,739)
------------------------------------------------------- ------------- ------------
Total equity 14,372,241 15,838,479
------------------------------------------------------- ------------- ------------
Total equity and liabilities $ 22,932,489 $ 24,257,856
------------------------------------------------------- ------------- ------------
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
Going concern (note 1)
Contingency (note 16)
Event after the reporting period (note 17)
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
------------------------------------------ ----------- ----------- ----------- -----------
Revenues
Jewellery sales (note 13) $ 5,788 $ 14,203 $ 5,788 $ 71,243
Cost and expenses of operations
Cost of sales 37,098 42,365 192,606 100,581
Depreciation (note 6) 93,865 77,394 280,355 219,623
------------------------------------------ ----------- ----------- ----------- -----------
130,963 119,759 472,961 320,204
------------------------------------------ ----------- ----------- ----------- -----------
Loss before general administrative and
other (income) expenses (125,175) (105,556) (467,173) (248,961)
------------------------------------------ ----------- ----------- ----------- -----------
General administrative expenses
Management and administration wages (note
14) 228,339 222,724 675,645 596,141
Other operating expenses 79,617 47,742 161,897 151,919
Accounting and corporate 13,034 16,370 41,647 46,730
Legal and audit 18,018 12,747 59,464 76,950
Stock-based compensation 57,631 39,657 269,694 185,512
Shareholder communication and investor
relations 47,917 43,210 158,886 148,840
Transfer agent 1,415 1,939 9,068 8,066
Director fees (note 14) 8,500 6,000 26,000 19,250
General office 2,653 2,077 8,915 6,499
Accretion expenses (notes 8 and 10) 67,288 105,044 186,317 185,441
Loan interest and bank charges less
deposit interest (note 14) 82,123 78,746 257,812 175,951
------------------------------------------ ----------- ----------- ----------- -----------
606,535 576,256 1,855,345 1,601,299
Other (income) expenses
Unrealized gain on fair value of
derivative financial liability - - - (10,000)
Foreign exchange (gain) loss (13,664) 24,905 66,908 91,465
------------------------------------------ ----------- ----------- ----------- -----------
(13,664) 24,905 66,908 81,465
------------------------------------------ ----------- ----------- ----------- -----------
Net loss for the period $ (718,046) $ (706,717) $ (2,389,426) $ (1,931,725)
------------------------------------------ ----------- ----------- ----------- -----------
Basic and diluted net loss per share (note
12) $ (0.00) $ (0.00) $ (0.01) $ (0.01)
------------------------------------------ ----------- ----------- ----------- -----------
Weighted average number of common shares
outstanding - basic and diluted 310,115,353 188,775,647 303,131,184 187,954,266
------------------------------------------ ----------- ----------- ----------- -----------
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 Comprehensive Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
---------------------------------------------- --------- --------- ----------- -----------
Net loss for the period $ (718,046) $ (706,717) $ (2,389,426) $ (1,931,725)
Other comprehensive loss
Items that will be reclassified subsequently
to profit or loss
Exchange differences on translating
foreign operations (257,290) (242,921) (852,666) (39,967)
---------------------------------------------- --------- --------- ----------- -----------
Total comprehensive loss $ (975,336) $ (949,638) $ (3,242,092) $ (1,971,692)
---------------------------------------------- --------- --------- ----------- -----------
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)
Nine Months Ended
September 30,
2019 2018
------------------------------------------------------------------------- ----------- -----------
Operating activities
Net loss for the period $ (2,389,426) $ (1,931,725)
Adjustment for:
Depreciation (note 6) 280,355 219,623
Stock-based compensation 269,694 185,512
Interest expense (note 14) 264,726 166,227
Foreign exchange gain (190,279) (6,811)
Accretion expenses (notes 8 and 10) 186,317 185,441
Unrealized gain on fair value of derivative financial liability - (10,000)
Non-cash working capital items:
Accounts receivable and prepaid expenses (202,034) 72,191
Inventories 11,335 4,070
Accounts payable and other liabilities 157,997 615,208
Due to related parties 177,501 280,676
------------------------------------------------------------------------- ----------- -----------
Net cash and cash equivalents used in operating activities (1,433,814) (219,588)
------------------------------------------------------------------------- ----------- -----------
Investing activities
Purchase of property, plant and equipment (4,766,426) (759,264)
Proceeds from sale of property, plant and equipment 14,215 -
Exploration and evaluation assets (24,197) (2,865,336)
------------------------------------------------------------------------- ----------- -----------
Net cash and cash equivalents used in investing activities (4,776,408) (3,624,600)
------------------------------------------------------------------------- ----------- -----------
Financing activities
Proceeds of private placement (note 11(b)) 1,600,000 1,571,771
Share issue costs (note 11(b)) (93,840) (72,740)
Advances from related parties - 854,567
Proceeds from financing facilities (note 10) - 2,021,280
Financing charges related to financing liabilities (note 10) - (41,674)
Repayment of financing facilities (note 10) (34,287) (4,511)
------------------------------------------------------------------------- ----------- -----------
Net cash and cash equivalents (used in) provided by financing activities 1,471,873 4,328,693
------------------------------------------------------------------------- ----------- -----------
Net change in cash and cash equivalents (4,738,349) 484,505
Effect of exchange rate changes on cash held in foreign currencies (94,058) (4,621)
Cash and cash equivalents, beginning of period 6,188,554 779,758
------------------------------------------------------------------------- ----------- -----------
Cash and cash equivalents, end of period $ 1,356,147 $ 1,259,642
------------------------------------------------------------------------- ----------- -----------
Cash $ 1,356,147 $ 1,259,642
Cash equivalents - -
------------------------------------------------------------------------- ----------- -----------
Cash and cash equivalents $ 1,356,147 $ 1,259,642
------------------------------------------------------------------------- ----------- -----------
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 Foreign
settled
share-based currency
Share Warrants payments translation
capital reserve reserve reserve Deficit Total
------------------ ----------- -------- ----------- ----------- ------------ -----------
Balance, December
31, 2017 $ 39,759,172 $ - $ 7,038,978 $ 619,209 $ (38,867,302) $ 8,550,057
Shares issued in
private
placement (note
11(b)(i)) 1,571,771 - - - - 1,571,771
Share issue costs (72,740) - - - - (72,740)
Warrants issued
(note 10(ii)) - 786,000 - - - 786,000
Stock-based
compensation - - 185,512 - - 185,512
Exchange
differences on
translating foreign operations - - - (39,967) - (39,967) Net loss for the period - - - - (1,931,725) (1,931,725) ------------------ ----------- -------- ----------- ----------- ------------ ----------- Balance, September 30, 2018 $ 41,258,203 $ 786,000 $ 7,224,490 $ 579,242 $ (40,799,027) $ 9,048,908 ------------------ ----------- -------- ----------- ----------- ------------ ----------- Balance, December 31, 2018 $ 48,628,055 $ 786,000 $ 7,264,147 $ 913,016 $ (41,752,739) $ 15,838,479 Shares issued in private placement (note 11(b)(ii)) 1,600,000 - - - - 1,600,000 Share issue costs (93,840) - - - - (93,840) Stock-based compensation - - 269,694 - - 269,694 Exchange differences on translating foreign operations - - - (852,666) - (852,666) Net loss for the period - - - - (2,389,426) (2,389,426) ------------------ ----------- -------- ----------- ----------- ------------ ----------- Balance, September 30, 2019 $ 50,134,215 $ 786,000 $ 7,533,841 $ 60,350 $ (44,142,165) $ 14,372,241 ------------------ ----------- -------- ----------- ----------- ------------ -----------
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 and Nine Months Ended September 30, 2019 (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 uncertainties related to events or conditions that may cast 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 Flintridge Resources Limited ("Flintridge") who are engaged in the acquisition, exploration and development of gold properties, mainly in Omagh, Northern Ireland and Omagh Minerals Limited ("Omagh") who are engaged in the exploration of gold properties, mainly in the Republic of Ireland. The Omagh mine has an open pit mine, which was in production until 2013 when production was suspended and is reported as property, plant and equipment and as an underground mine which having established technical feasibility and commercial viability in December 2018 has resulted in associated exploration and evaluation assets being reclassified as an intangible development asset and reported as property, plant and equipment.
The going concern assumption is dependent upon forecast cash flows at the Omagh mine being met together with the continued support of both Cavanacaw Corporation and Galantas Gold Corporation. The directors assumptions in relation to future levels of production, gold prices and mine operating costs are crucial to forecast cash flows being achieved. Should production be significantly delayed, revenues fall short of expectations or operating costs and capital costs increase significantly, there may be insufficient cash flows to sustain day to day operations without seeking further finance. Refer to Note 17 - Event After the Reporting Period.
As at September 30, 2019, the Company had a deficit of $44,142,165 (December 31, 2018 - $41,752,739). Comprehensive loss for the nine months ended September 30, 2019 was $3,242,092 (nine months ended September 30, 2018 - comprehensive loss of $1,971,692). These losses raise material uncertainties which cast significant doubt as to whether the Company will be able to continue as a going concern. Management is confident that it will 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, Northern Ireland. Cavanacaw also has developed a premium jewellery business founded on the gold produced under the name Galántas Irish Gold Limited ("Galántas"). As at July 1, 2007, the Company's Omagh mine began production and in 2013 production was suspended. On April 1, 2014, Galántas amalgamated its jewelry business with Omagh.
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 ("TSXV") and London Stock Exchange AIM under the symbol GAL. The primary office is located at The Canadian Venture Building, 82 Richmond Street East, Toronto, Ontario, Canada, M5C 1P1.
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 ("IFRIC"). 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 November 20, 2019 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, 2018, except as noted below. Any subsequent changes to IFRS that are given effect in the Company's annual consolidated financial statements for the year ending December 31, 2019 could result in restatement of these unaudited condensed interim consolidated financial statements.
New accounting standards adopted
(i) On June 7, 2017, the IASB issued IFRIC 23 - Uncertainty Over Income Tax Treatments. The interpretation provides guidance on the accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over income tax treatments. The interpretation is applicable for annual periods beginning on or after January 1, 2019. At January 1, 2019, the Company adopted this standard and there was no material impact on the Company's unaudited condensed interim consolidated financial statements.
(ii) On January 13, 2016, the IASB issued IFRS 16 - Leases ("IFRS 16"). The new standard is effective for annual periods beginning on or after January 1, 2019. IFRS 16 will replace IAS 17 - Leases ("IAS 17"). This standard introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. IFRS 16 substantially carries forward the lessor accounting requirements of IAS 17, while requiring enhanced disclosures to be provided by lessors. Other areas of the lease accounting model have been impacted, including the definition of a lease. Transitional provisions have been provided. The Company adopted IFRS 16 in its unaudited condensed interim consolidated financial statements for the period beginning on January 1, 2019. As the Company has no material lease contracts
that fall under IFRS 16, the adoption of this standard has not resulted in any material changes in the unaudited condensed interim consolidated financial statements.
4. Accounts Receivable and Prepaid Expenses
As at As at
September 30, December 31,
2019 2018
----------------------------------------------- ------------- ------------
Sales tax receivable - Canada $ 2,689 $ 7,629
Valued added tax receivable - Northern Ireland 194,020 153,948
Accounts receivable 135,536 109,927
Prepaid expenses 132,316 15,769
----------------------------------------------- ------------- ------------
$ 464,561 $ 287,273
----------------------------------------------- ------------- ------------
The following is an aged analysis of receivables:
As at As at
September 30, December 31,
2019 2018
-------------------------- ------------- ------------
Less than 3 months $ 329,901 $ 268,995
More than 12 months 2,344 2,509
-------------------------- ------------- ------------
Total accounts receivable $ 332,245 $ 271,504
-------------------------- ------------- ------------
5. Inventories
As at As at
September 30, December 31,
2019 2018
------------------------ -------------- ------------
Concentrate inventories $ - $ 11,335
------------------------ --------------- ------------
6. Property, Plant and Equipment
Freehold Plant Mine
land and and Motor Office development Development
Cost buildings machinery vehicles equipment costs assets Total
----------- ---------- ---------- -------- --------- ----------- ----------- -----------
Balance,
December
31, 2017 $ 2,340,221 $ 5,477,586 $ 141,364 $ 104,456 $ 15,340,722 $ - $ 23,404,349
Additions - 557,607 21,014 46,996 - 4,266,806 4,892,423
Transfer
(1) - - - - (15,340,722) 10,468,410 (4,872,312)
Foreign
exchange
adjustment 65,953 153,418 3,984 2,944 - (38,803) 187,496
----------- ---------- ---------- -------- --------- ----------- ----------- -----------
Balance,
December
31, 2018 2,406,174 6,188,611 166,362 154,396 - 14,696,413 23,611,956
Additions - 717,961 28,576 13,447 - 4,006,442 4,766,426
Disposals - - (32,220) - - - (32,220)
Foreign
exchange
adjustment (158,535) (405,524) (10,961) (10,173) - (961,616) (1,546,809)
----------- ---------- ---------- -------- --------- ----------- ----------- -----------
Balance,
September
30, 2019 $ 2,247,639 $ 6,501,048 $ 151,757 $ 157,670 $ - $ 17,741,239 $ 26,799,353
----------- ---------- ---------- -------- --------- ----------- ----------- -----------
Freehold Plant Mine
land and and Motor Office development Development
Accumulated buildings machinery vehicles equipment costs assets Total
depreciation
------------- ---------- ---------- -------- --------- ----------- ----------- -----------
Balance,
December 31,
2017 $ 1,908,720 $ 4,496,935 $ 91,189 $ 88,977 $ 8,651,776 $ - $ 15,237,597
Depreciation 12,433 311,201 18,005 9,360 - - 350,999
Transfer (1) - - - - (8,651,776) - (8,651,776)
Foreign
exchange
adjustment 53,892 128,444 2,716 2,583 - - 187,635
------------- ---------- ---------- -------- --------- ----------- ----------- -----------
Balance,
December 31,
2018 1,975,045 4,936,580 111,910 100,920 - - 7,124,455
Depreciation 6,939 255,062 11,322 7,032 - - 280,355
Disposal - - (13,750) - - - (13,750)
Foreign
exchange
adjustment (130,392) (333,173) (7,801) (6,915) - - (478,281)
------------- ---------- ---------- -------- --------- ----------- ----------- -----------
Balance,
September
30, 2019 $ 1,851,592 $ 4,858,469 $ 101,681 $ 101,037 $ - $ - $ 6,912,779
------------- ---------- ---------- -------- --------- ----------- ----------- -----------
Freehold Plant Mine
land and and Motor Office development Development
Carrying buildings machinery vehicles equipment costs assets Total
value
---------- --------- ---------- -------- --------- ----------- ----------- -----------
Balance,
December
31, 2018 $ 431,129 $ 1,252,031 $ 54,452 $ 53,476 $ - $ 14,696,413 $ 16,487,501
---------- --------- ---------- -------- --------- ----------- ----------- -----------
Balance,
September
30, 2019 $ 396,047 $ 1,642,579 $ 50,076 $ 56,633 $ - $ 17,741,239 $ 19,886,574
---------- --------- ---------- -------- --------- ----------- ----------- -----------
(1) During the year ended December 31, 2018, the Company transferred the cost of its Exploration and evaluation assets (note 7) to Development assets.
7. Exploration and Evaluation Assets
Exploration and evaluation assets are expenditures for the underground mining operations in Omagh. The Company had announced in December 2016 that it would commence the first phase of underground development and re-start concentrate shipments at its Omagh mine. Underground development of a decline tunnel, located at the base of the existing open pit, commenced in the first quarter 2017.
The granting of planning consent during the second quarter of 2015 for an underground operation at the Omagh site permits the continuation and expansion of gold mining. This planning consent was appealed by a third party in a judicial review hearing which commenced in September 2016 and was then adjourned to and completed in February 2017. Judgement was received in September 2017 whereby the third party's request for the quashing of the planning consent was denied. However, in November, the Company reported that it had received notice of an application by the third party to the Court of Appeal in relation to the positive judicial review judgment. This appeal was completed in February 2018. In November 2018, the Company announced that the Court of Appeal has delivered its judgement in regard to an appeal against the Company's planning consent. The Court has determined that the appeal has failed and thus the planning consent is confirmed.
Exploration
and
evaluation
Cost assets
---------------------------- -----------
Balance, December 31, 2017 $ 3,948,452
Additions 254,140
Transfer (i) (3,624,624)
Foreign exchange adjustment 182,055
---------------------------- -----------
Balance, December 31, 2018 760,023
Additions 24,197
Foreign exchange adjustment (47,713)
---------------------------- -----------
Balance, September 30, 2019 $ 736,507
---------------------------- -----------
Exploration
and
evaluation
Carrying value assets
---------------------------- -----------
Balance, December 31, 2018 $ 760,023
---------------------------- -----------
Balance, September 30, 2019 $ 736,507
---------------------------- -----------
(i) During the year ended December 31, 2018, the Company transferred the cost of its Exploration and evaluation assets (note 6) to Development assets.
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 September 30, 2019 based on a risk-free discount rate of 1% (December 31, 2018 - 1%) and an inflation rate of 1.50% (December 31, 2018 - 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 September 30, 2019, the estimated fair value of the liability is $547,860 (December 31, 2018 - $578,242). Changes in the provision during the nine months ended September 30, 2019 are as follows:
As at As at
September 30, December 31,
2019 2018
----------------------------------------------- ------------- ------------
Decommissioning liability, beginning of period $ 578,242 $ 551,680
Accretion 8,019 10,925
Foreign exchange (38,401) 15,637
----------------------------------------------- ------------- ------------
Decommissioning liability, end of period $ 547,860 $ 578,242
----------------------------------------------- ------------- ------------
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, 2018 - GBP 300,000), of which GBP 300,000 was funded as of September 30, 2019 (GBP 300,000 was funded as of December 31, 2018) and reported as long-term deposit of $488,700 (December 31, 2018 - $523,170).
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 and professional fees activities.
As at As at
September 30, December 31,
2019 2018
--------------------------------------------- ------------- ------------
Accounts payable $ 1,410,227 $ 1,017,939
Accrued liabilities 853,132 1,239,390
--------------------------------------------- ------------- ------------
Total accounts payable and other liabilities $ 2,263,359 $ 2,257,329
--------------------------------------------- ------------- ------------
The following is an aged analysis of the accounts payable and other liabilities:
As at As at
September 30, December 31,
2019 2018
--------------------------------------------- ------------- ------------
Less than 3 months $ 1,473,604 $ 1,066,881
3 to 12 months 446,022 775,693
12 to 24 months 37,592 71,394
More than 24 months 306,141 343,361
--------------------------------------------- ------------- ------------
Total accounts payable and other liabilities $ 2,263,359 $ 2,257,329
--------------------------------------------- ------------- ------------
10. Financing Facilities
Amounts payable on the long-term debts are as follow:
As at As at
September 30, December 31,
2019 2018
------------------------------------------ ------------- ------------
Financing facilities, beginning of period $ 1,081,190 $ 19,689
Financing facility received (ii) - 2,021,280
Less bonus warrants issued (ii) - (786,000)
Less financing costs (ii) - (41,674)
Less current portion (374,670) (382,974)
Repayment of financing facilities (34,287) (6,357)
Accretion 178,298 240,621
Foreign exchange adjustment 232,968 16,605
------------------------------------------ ------------- ------------
Financing facilities - long term portion $ 1,083,499 $ 1,081,190
------------------------------------------ ------------- ------------
(i) In June 2015, the Company obtained financing in the amount of GBP 19,900 for the purchase of a vehicle. The financing is for three years at interest of 6.79% per annum with monthly principal and interest payments of GBP 377 together with a final payment in August 2019 of GBP 9,540. The financing was secured on the vehicle.
(ii) In April 2018, the Company signed a concentrate pre-payment agreement and loan facility for US$1.6 million with a United Kingdom based company (the "Lender"), with a maturity date of December 31, 2020. The interest is set at US$ 12 month LIBOR + 8.75% and payable monthly. No interest shall be charged for 6 months and repayments shall commence against deliveries in 2019. There was a US$25,000 arrangement fee.
In respect of the loan facility, a fixed and floating security, subordinated to an existing security to G&F Phelps Ltd. ("G&F Phelps"), is being put in place over Flintridge assets. G&F Phelps has a first charge on Flintridge assets in respect of its loan facility and the Lender required an intercreditor agreement between G&F Phelps and the Lender.
As consideration for the loan facility, the United Kingdom based company received 15,000,000 bonus warrants of the Company. Each bonus warrant is exercisable into one common share of the Company and is subject to an initial four months plus one day hold period from the date of issuance of the bonus warrants. The bonus warrants have a maximum life of two years (the "Expiry Time"). On April 19, 2018, the 15,000,000 bonus warrants were granted. In the event that the weighted average closing price per common share of the Company is more than $0.20 per share for more than five consecutive trading days, the Company shall be entitled to accelerate the Expiry Time to a date that is 30 days from the date on which the Company announces the accelerated Expiry Time by press release.
The fair value of the 15,000,000 bonus warrants was estimated at $786,000 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 113.55%, risk-free interest rate - 1.91% and an expected average life of 2 years.
During the three and nine months ended September 30, 2019, the Company recorded accretion expense of $64,718 and $178,298, respectively in the unaudited condensed interim consolidated statements of loss in regards with this loan facility (year ended December 31, 2018 - $240,621).
During the three and nine months ended September 30, 2019, the Company recorded a repayment of $34,287 (GBP 21,048) in regards with this loan facility (year ended December 31, 2018 - $nil).
11. Share Capital and Reserves a) Authorized share capital
At September 30, 2019, 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 September 30, 2019, the issued share capital amounted to $50,134,215. The change in issued share capital for the periods presented is as follows:
Number of
common
shares Amount
---------------------------------------- ----------- -----------
Balance, December 31, 2017 187,549,186 $ 39,759,172
Shares issued in private placement (i) 22,137,619 1,571,771
Share issue costs - (72,740)
----------------------------------------- ----------- -----------
Balance, September 30, 2018 209,686,805 $ 41,258,203
----------------------------------------- ----------- -----------
Balance, December 31, 2018 299,686,805 $ 48,628,055
Shares issued in private placement (ii) 23,529,412 1,600,000
Share issue costs - (93,840)
----------------------------------------- ----------- -----------
Balance, September 30, 2019 323,216,217 $ 50,134,215
----------------------------------------- ----------- -----------
(i) On September 25, 2018, the Company closed a private placement of 22,137,619 common shares for gross proceeds of $1,571,771. United Kingdom placees have subscribed at a price of GBP 0.042 per common share. Canadian placees have subscribed at a price of $0.071 per common share.
Melquart Ltd, ("Melquart") subscribed for a total of 11,904,762 common shares and Melquart's staked increased to 19.2% of the Company's issued common shares.
Ross Beaty subscribed for 2,380,952 common shares, which, in addition to the shares he already holds, give rise to an 17.9% holding.
Roland Phelps (President and Chief Executive Officer) subscribed for 4,761,905 common shares, which, in addition to the shares he already holds, give rise to an 18.7% holding.
(ii) On August 21, 2019, the Company closed a private placement of 23,529,412 common shares for gross proceeds of GBP 1,000,000 ($1,600,000) at an issue price of GBP 0.0425 (CAD$0.068) per share. The hold period will expire on December 22, 2019.
Miton Asset Management Limited ("Miton") subscribed for a total of 3,764,706 common shares and Miton's staked increased to 16.63% of the Company's issued common shares.
Melquart subscribed for a total of 15,341,174 common shares and Melquart's staked increased to 24.00% of the Company's issued common shares.
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, 2017 636,000 $ 0.07
Issued (note 10(ii)) 15,000,000 0.16
Expired (636,000) 0.07
--------------------------------------------------- ---------- --------
Balance, September 30, 2018 15,000,000 $ 0.16
--------------------------------------------------- ---------- --------
Balance, December 31, 2018 and September 30, 2019 15,000,000 $ 0.16
--------------------------------------------------- ---------- --------
The following table reflects the actual warrants issued and outstanding as of September 30, 2019:
Grant date Exercise
Number fair value price
Expiry date of warrants ($) ($)
--------------- ----------- ---------- --------
April 19, 2020 15,000,000 786,000 0.1575
---------------- ----------- ---------- --------
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, 2017 8,600,000 $ 0.12
Granted (i) 1,000,000 0.11
Expired (750,000) 0.14
----------------------------- ---------- --------
Balance, September 30, 2018 8,850,000 $ 0.12
----------------------------- ---------- --------
Balance, December 31, 2018 8,850,000 $ 0.12
Granted (ii)(iii) 5,700,000 0.09
Expired (600,000) 0.11
----------------------------- ---------- --------
Balance, September 30, 2019 13,950,000 $ 0.10
----------------------------- ---------- --------
(i) On April 19, 2018, 1,000,000 stock options were granted to key employees and consultants of the Company to purchase common shares at a price of $0.11 per share until April 19, 2023. The options will vest as to one third on April 19, 2018 and one third on each of the following two anniversaries. The fair value attributed to these options was $99,400 and was expensed in the unaudited condensed interim consolidated statements of loss and credited to equity settled share-based payments reserve. During the three and nine months ended September 30, 2019, included in stock-based compensation is $4,176 and $22,286, respectively (three and nine months ended September 30, 2018 -$12,527 and $55,464, respectively) related to the vested portion of these options.
The fair value of the options was estimated using the Black-Scholes option pricing model with the following assumptions: dividend yield - 0%; volatility - 172%; risk-free interest rate - 2.16% and an expected life of 5 years.
(ii) On February 13, 2019, 3,200,000 stock options were granted to directors, officers, consultants and employees of the Company to purchase common shares at a price of $0.09 per share until February 13, 2024. The options will vest as to one third on February 13, 2019 and one third on each of the following two anniversaries. The fair value attributed to these options was $247,360 and was expensed in the unaudited condensed interim consolidated statements of loss and credited to equity settled share-based payments reserve. During the three and nine months ended September 30, 2019, included in stock-based compensation is $29,226 and $155,200, respectively related to the vested portion of these options.
The fair value of the options was estimated using the Black-Scholes option pricing model with the following assumptions: dividend yield - 0%; volatility - 129%; risk-free interest rate - 1.84% and an expected life of 5 years.
(iii) On June 27, 2019, 2,500,000 stock options were granted to directors and employees of the Company to purchase common shares at a price of $0.09 per share until June 27, 2024. The options will vest as to one third on June 27, 2019 and one third on each of the following two anniversaries. The fair value attributed to these options was $145,500 and was expensed in the unaudited condensed interim consolidated statements of loss and credited to equity settled share-based payments reserve. During the three and nine months ended September 30, 2019, included in stock-based compensation is $24,229 and $67,435, respectively related to the vested portion of these options.
The fair value of the options was estimated using the Black-Scholes option pricing model with the following assumptions: dividend yield - 0%; volatility - 128%; risk-free interest rate - 1.37% and an expected life of 5 years.
The following table reflects the actual stock options issued and outstanding as of September 30, 2019:
Weighted average Number of
remaining Number of options Number of
Exercise contractual options vested options
Expiry date price ($) life (years) outstanding (exercisable) unvested
------------------ --------- ---------------- ----------- ------------- ----------
June 1, 2020 0.105 0.67 3,350,000 3,350,000 -
June 12, 2020 0.105 0.70 150,000 150,000 -
March 25, 2022 0.135 2.48 3,950,000 3,950,000 -
April 19, 2023 0.110 3.55 1,000,000 1,000,000 -
February 13, 2024 0.090 4.38 3,000,000 1,000,000 2,000,000
June 27, 2024 0.090 4.75 2,500,000 833,333 1,666,667
------------------ --------- ---------------- ----------- ------------- ----------
0.095 2.07 13,950,000 10,283,333 3,666,667
------------------ --------- ---------------- ----------- ------------- ----------
12. Net Loss per Common Share
The calculation of basic and diluted loss per share for the three and nine months ended September 30, 2019 was based on the loss attributable to common shareholders of $718,046 and $2,389,426, respectively (three and nine months ended September 30, 2018 - $706,717 and $1,931,725, respectively) and the weighted average number of common shares outstanding of 310,115,353 and 303,131,184, respectively (three and nine months ended September 30, 2018 - 188,775,647 and 187,954,266, respectively) for basic and diluted loss per share. Diluted loss did not include the effect of 15,000,000 warrants (three and nine months ended September 30, 2018 - 15,000,000) and 13,950,000 options (three and nine months ended September 30, 2018 - 8,850,000) for the three and nine months ended September 30, 2019, as they are anti-dilutive.
13. Revenues
Shipments of concentrate under the off-take arrangements commenced during the second quarter of 2019. Concentrate sales provisional revenues during the three and nine months ended September 30, 2019 totalled approximately US$519,000 and US$978,000 respectively. However, until the mine reaches the commencement of commercial production, the net proceeds from concentrate sales will be offset against Development assets.
14. 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 Ended Nine Months Ended
September 30, September 30,
Note 2019 2018 2019 2018
-------------------------------- ----- ---------- ------- --------- -------
Interest on related party loans (i) $ 84,009 $ 77,140 $ 264,726 $171,409
--------------------------------- ------ ---------- ------- --------- -------
(a) The Company entered into the following transactions with related parties (continued):
(i) G&F Phelps, a company controlled by a director of the Company, had amalgamated loans to the Company of $2,972,541 (GBP 1,824,764) (December 31, 2018 - $3,182,205 - GBP 1,824,764) included with due to related parties bearing interest at 2% above UK base rates, repayable on demand and secured by a mortgage debenture on all the Company's assets. In April 2018, the interest increased to 6.75% + US$ 12 month LIBOR. Interest accrued on related party loans is included with due to related parties. As at September 30, 2019, the amount of interest accrued is $869,695 (GBP 533,883) (December 31, 2018 - $658,338 - GBP 377,509).
(b) Remuneration of officer and directors of the Company was as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
-------------------------- --------- -------- --------- -------
Salaries and benefits (1) $ 110,909 $ 109,833 $ 338,784 $337,939
Stock-based compensation 8,292 6,644 65,675 31,849
-------------------------- --------- -------- --------- -------
$ 119,201 $ 116,477 $ 404,459 $369,788
-------------------------- --------- -------- --------- -------
(1) Salaries and benefits include director fees. As at September 30, 2019, due to directors for fees amounted to $109,000 (December 31, 2018 - $166,000) and due to officers, mainly for salaries and benefits accrued amounted to $339,624 (GBP 208,486) (December 31, 2018 - $113,099 - GBP 64,854), and is included with due to related parties.
(c) As of September 30, 2019, Ross Beaty owns 37,447,478 common shares of the Company or approximately 11.59% of the outstanding common shares. Roland Phelps, CEO and director, owns, directly and indirectly, 49,338,167 common shares of the Company or approximately 15.26% of the outstanding common shares of the Company. Miton owns 53,764,706 common shares of the Company or approximately 16.63% . Melquart owns, directly and indirectly, 77,565,719 common shares of the Company or approximately 24.00% of the outstanding common shares of the Company. The remaining 32.52% 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.
15. 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 Flintridge. 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:
September 30, 2019 United Kingdom Canada Total ------------------- -------------- -------- ---------- Current assets $ 847,353 $ 973,355 $ 1,820,708 Non-current assets 21,058,072 53,709 21,111,781 ------------------- -------------- -------- ---------- December 31, 2018 United Kingdom Canada Total ------------------- -------------- ---------- ---------- Current assets $ 794,772 $ 5,692,390 $ 6,487,162 Non-current assets 17,706,643 64,051 17,770,694 ------------------- -------------- ---------- ---------- 16. Contingency
During the year ended December 31, 2010, the Company's subsidiary Omagh Minerals Limited received a payment demand from Her Majesty's Revenue and Customs ("HMRC") in the amount of $495,688 (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. Omagh Minerals believed this claim to be without merit. An appeal was lodged with the Tax Tribunals Service and the hearing started at the beginning of March 2017 and following a number of adjournments was completed in August 2018. During the nine months ended September 30, 2019, the Tax Tribunals Service issued their judgement dismissing the appeal by Omagh in respect of the assessments. A provision has now been included in the unaudited condensed interim consolidated financial statements in respect of the aggregates levy plus interest and penalty.
There is a contingent liability in respect of potential additional interest which may be applied in respect of the aggregates levy dispute. Omagh Minerals Limited is unable to make a reliable estimate of the amount of the potential additional interest that may be applied by HMRC.
17. Event After the Reporting Period
On October 29, 2019, the Company announced a temporary suspension of blasting operations as its Omagh gold mine, Northern Ireland. Blasting operations are currently limited, since all blasting must be supervised by the Police Service of Northern Ireland (the "Arrangements"). Presently the Arrangements are not sufficient for the desired level of operations. The Company has been working with the authorities to increase blasting availability to normal levels for an underground mine. Progress has been made and substantive investment made in accordance with recommendations, however, the Company is still awaiting final approvals from the authorities in order to be able to implement its increased blasting protocols. The Company has been waiting for some time for these approvals and although the Company expects to receive the approvals based on previous discussions with the relevant authorities, a date for receipt of the required approvals and therefore the date on which implementation of the increased blasting schedule is not yet known.
The current Arrangements are not sufficient to allow for the expansion of mine operations as envisaged by the Company's existing mine plan and until changes are agreed, the present inefficiencies caused by those Arrangements form an increasing financial burden, which has proved a significant drain on the financial resources of the Company.
Accordingly, in order to reduce costs, while some mine operations will continue at the Omagh gold mine, consultation with the workforce is underway regarding a reduction in the numbers employed.
In light of the economic impingement on the Company's operations, the Company is beginning to seek strategic alternatives including reviewing its licenses and operations; and considering the possibility of engaging in a joint venture or other options with third parties and alternative financing structures.
The Company expects it will have to raise funds within the next 6 months and will update the market in due course.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
QRTMMMZMRMRGLZM
(END) Dow Jones Newswires
November 22, 2019 02:00 ET (07:00 GMT)
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