Galantas Gold Corporation RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2024

RNS Number : 7364N

Galantas Gold Corporation

27 November 2024

 

GALANTAS GOLD CORPORATION

TSXV & AIM: Symbol GAL

 

 

GALANTAS REPORT FINANCIAL RESULTS FOR THE QUARTER ENDED September 30, 2024

 

November 27, 2024:  Galantas Gold Corporation (the 'Company') is pleased to announce its unaudited financial results for the Quarter ended September 30, 2024.

 

 

Financial Highlights

 

Highlights of the third quarter 2024 results, which are expressed in Canadian Dollars, are summarized below:

 

All figures denominated in Canadian Dollars (CDN$)	Quarter Ended September 30         2024                     2023
Revenue	$     0	$     0
Cost and expenses of operations	$   (22,283)	$    (24,728)
Loss before the undernoted	$   (22,283)	$    (24,728)
Depreciation	$   (110,126)	$    (135,597)
General administrative expenses	$   (1,174,156)	$    (858,600)
Foreign exchange gain (loss)	$   (26,553)	$    (294,430)
Unrealized gain on derivative fair value adjustment	$    592,489	$     0
Net (Loss) for the quarter	$   (740,629)	$    (1,313,355)
Working Capital Deficit	$   (14,098,845)	$    (14,010,771)
Cash gain/(loss) from operating activities before changes in non-cash working capital	$   21,801	$    (1,088,096)
Cash at September 30, 2024	$   383,011	$    609,047

 

Sales revenue for the quarter ended September 30, 2024 amounted to $ Nil compared to revenue of $ Nil for the quarter ended September 30, 2023. Shipments of concentrate commenced during the third quarter of 2019. Concentrate sales provisional revenues totalled US$ 197,000 for the third quarter of 2024 compared to US$ 333,000 for the third quarter of 2023. Until the mine commences commercial production, the net proceeds from concentrate sales are being offset against development assets.

 

The Net Loss for the quarter ended September 30, 2024 amounted to $ 740,629 (2023: $ 1,313,355) and the cash inflow from operating activities before changes in non-cash working capital for the quarter ended September 30, 2024 amounted to $21,801 (2023: cash outflow $1,088,096). 

 

The Company had a cash balance of $ 383,011 at September 30, 2024 compared to $ 609,047 at September 30, 2023. The working capital deficit at September 30, 2024 amounted to $ 14,098,845 compared to a working capital deficit of $ 14,010,771 at September 30, 2023.

 

Safety is a high priority for the Company and we continue to invest in safety-related training and infrastructure. The zero lost time accident rate since the start of underground operations continues. Environmental monitoring demonstrates a high level of regulatory compliance.

 

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/7364N_1-2024-11-26.pdf

 

 

Qualified Person

 

The financial components of this disclosure have been reviewed by Alan Buckley (Chief Financial Officer) and the production and permitting components by Brendan Morris (COO), 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.

 

Enquiries

Galantas Gold Corporation
Mario Stifano - CEO
Email: [e-mail]
Website: www.galantas.com
Telephone: [phone]

 

Grant Thornton UK LLP (Nomad)                  

Harrison Clarke, Elliot Peters                                                   

Telephone: [phone]   

 

SP Angel Corporate Finance LLP (AIM Broker)

David Hignell, Charlie Bouverat (Corporate Finance)

Grant Barker (Sales and Broking)

Telephone: [phone]

 

 

GALANTAS GOLD CORPORATION

Condensed Interim Consolidated Financial Statements

(Expressed in Canadian Dollars)

(Unaudited)

Three and Nine Months Ended September 30, 2024

 

 

 

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.

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Galantas Gold Corporation

Condensed Interim Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

(Unaudited)

		As at			As at
		September 30,			December 31,
		2024			2023
ASSETS
Current assets
Cash and cash equivalents	$	383,011		$	2,593,265
Accounts receivable and prepaid expenses (note 4)		1,321,219			1,596,880
Inventories (note 5)		-			18,184
Total current assets		1,704,230			4,208,329
Non-current assets
Property, plant and equipment (note 6)		25,650,366			23,094,171
Long-term deposit (note 8)		542,400			505,110
Exploration and evaluation assets (note 7)		5,438,541			4,776,409
Total non-current assets		31,631,307			28,375,690
Total assets	$	33,335,537		$	32,584,019
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities (notes 9 and 17)	$	3,380,616		$	3,662,842
Financing facilities (note 10)		-			6,119,308
Due to related parties (note 15)		12,422,459			5,838,256
Other liability (note 15)		-			1,187,437
Total current liabilities		15,803,075			16,807,843
Non-current liabilities
Due to related parties (note 15)		-			638,432
Decommissioning liability (note 8)		665,158			611,452
Convertible debenture (note 11)		6,235,957			1,923,509
Derivative liability (note 11)		792,607			1,245,627
Total non-current liabilities		7,693,722			4,419,020
Total liabilities		23,496,797			21,226,863
Equity
Share capital (note 12(a)(b))		71,782,203			71,809,999
Reserves		20,074,711			18,579,467
Deficit		(82,018,174	)		(79,032,310	)
Total equity		9,838,740			11,357,156
Total equity and liabilities	$	33,335,537		$	32,584,019

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Going concern (note 1)

Incorporation and nature of operations (note 2)

Contingency (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,
		2024			2023			2024			2023
Revenues
Sales of concentrate (note 14)	$	-		$	-		$	-		$	-
Cost and expenses of operations
Cost of sales		22,283			24,728			69,933			147,824
Depreciation (note 6)		110,126			135,597			323,633			390,691
		132,409			160,325			393,566			538,515
Loss before general administrative and other income		(132,409	)		(160,325	)		(393,566	)		(538,515	)
General administrative expenses
Management and administration wages (note 15)		179,955			136,117			440,937			421,076
Other operating expenses		34,353			60,368			107,378			210,572
Accounting and corporate		17,737			26,658			71,343			245,054
Legal and audit		34,235			51,117			137,700			140,561
Stock-based compensation (note 12(d))		73,061			29,277			358,929			329,658
Shareholder communication and investor relations		43,750			63,126			245,283			444,808
Transfer agent		16,618			10,614			77,669			61,670
Director fees (note 15)		-			35,000			70,000			105,000
General office		14,523			7,724			48,258			74,203
Accretion expenses (notes 8, 10, 11 and 15)		338,711			94,043			970,031			299,790
Loan interest and bank charges less deposit         interest (notes 10, 11 and 15)		421,213			344,556			1,327,302			956,868
		1,174,156			858,600			3,854,830			3,289,260
Other expense (income)
Foreign exchange loss (gain)		26,553			294,430			(61,175	)		234,710
Unrealized gain on derivative fair value         adjustment (note 11)		(592,489	)		-			(1,201,357	)		-
		(565,936	)		294,430			(1,262,532	)		234,710
Net loss for the period	$	(740,629	)	$	(1,313,355	)	$	(2,985,864	)	$	(4,062,485	)
Basic and diluted net loss per share (note 13)	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.04	)
Weighted average number of common shares         outstanding - basic and diluted (note 13)		114,770,587			114,841,403			114,725,407			110,976,336

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 Income (Loss)

(Expressed in Canadian Dollars)

(Unaudited)

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2024			2023			2024			2023
Net loss for the period	$	(740,629	)	$	(1,313,355	)	$	(2,985,864	)	$	(4,062,485	)
Other comprehensive income (loss)
Items that will be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations		864,230			(154,630	)		1,136,315			471,287
Total comprehensive income (loss)	$	123,601		$	(1,467,985	)	$	(1,849,549	)	$	(3,591,198	)

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,
		2024			2023
Operating activities
Net loss for the period	$	(2,985,864	)	$	(4,062,485	)
Adjustment for:
Depreciation (note 6)		323,633			390,691
Stock-based compensation (note 12(d))		358,929			329,658
Accrued interest (notes 10, 11 and 15)		1,607,352			1,209,383
Foreign exchange loss		949,077			744,867
Accretion expenses (notes 8, 10, 11 and 15)		970,031			299,790
Gain on derivative fair value adjustment (note 11)		(1,201,357	)		-
Non-cash working capital items:
Accounts receivable and prepaid expenses		295,238			439,346
Inventories		18,184			68,552
Accounts payable and other liabilities		(474,672	)		1,171,840
Net cash and cash equivalents (used in) provided by operating activities		(139,449	)		591,642
Investing activities
Net purchase of property, plant and equipment		(1,666,862	)		(2,301,514	)
Exploration and evaluation assets		(422,865	)		(2,074,404	)
Net cash and cash equivalents used in investing activities		(2,089,727	)		(4,375,918	)
Financing activities
Proceeds of private placements (note 12(b)(i))		-			2,963,142
Share issue costs		-			(204,993	)
Proceeds from exercise of warrants		-			31,200
Repayments to related parties		-			(21,552	)
Proceeds from financing facilities		-			580,392
Net cash and cash equivalents provided by financing activities		-			3,348,189
Net change in cash and cash equivalents		(2,229,176	)		(436,087	)
Effect of exchange rate changes on cash held in foreign currencies		18,922			6,491
Cash and cash equivalents, beginning of period		2,593,265			1,038,643
Cash and cash equivalents, end of period	$	383,011		$	609,047
Cash	$	383,011		$	609,047
Cash equivalents		-			-
Cash and cash equivalents	$	383,011		$	609,047

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			Warrants			payments			translation
		capital			reserve			reserve			reserve			Deficit			Total
Balance, December 31, 2022	$	69,664,056		$	3,903,004		$	11,887,678		$	(275,577	)	$	(70,464,170	)	$	14,714,991
Shares issued in private placement (note 12(b)(i))		2,963,142			-			-			-			-			2,963,142
Shares issue for services arrangement (note 12(b)(ii))		420,000			-			-			-			-			420,000
Shares issue for debt settlement (note 12(b)(iii))		749,020			-			-			-			-			749,020
Warrants issued (note 12(b)(i)(iii))		(1,609,634	)		1,609,634			-			-			-			-
Warrants issued		-			82,511			-			-			-			82,511
Share issue costs (note 12(b)(i))		(245,168	)		40,175			-			-			-			(204,993	)
Stock-based compensation (note 12(d))		-			-			329,658			-			-			329,658
Exercise of warrants		40,733			(9,533	)		-			-			-			31,200
Warrants expired		-			(1,829,245	)		1,829,245			-			-			-
Exchange differences on translating foreign operations		-			-			-			471,287			-			471,287
Net loss for the period		-			-			-			-			(4,062,485	)		(4,062,485	)
Balance, September 30, 2023	$	71,982,149		$	3,796,546		$	14,046,581		$	195,710		$	(74,526,655	)	$	15,494,331
Balance, December 31, 2023	$	71,809,999		$	3,546,313		$	14,345,538		$	687,616		$	(79,032,310	)	$	11,357,156
Shares cancelled		(110,200	)		-			-			-			-			(110,200	)
Convertible debenture converted (note 11)		82,404			-			-			-			-			82,404
Stock-based compensation (note 12(d))		-			-			358,929			-			-			358,929
Warrants expired		-			(144,464	)		144,464			-			-			-
Exchange differences on translating foreign operations		-			-			-			1,136,315			-			1,136,315
Net loss for the period		-			-			-			-			(2,985,864	)		(2,985,864	)
Balance, September 30, 2024	$	71,782,203		$	3,401,849		$	14,848,931		$	1,823,931		$	(82,018,174	)	$	9,838,740

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, 2024 (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 subsidiaries Gairloch Resources Limited ("Gairloch") incorporated on November 16, 2023 and Cavanacaw Corporation ("Cavanacaw"). Cavanacaw has a 100% shareholding in Galántas Irish Gold Limited ("Galántas"), 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 on forecast cash flows being met, further financing negotiations being completed together. Management' assumptions in relation to future financing, 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.

Based on the financial projections which have been prepared for a five-year period and using assumptions which management believes to be prudent, alongside ongoing negotiations with both current and prospective investors and creditors, management believes it is appropriate to prepare the unaudited condensed interim consolidated financial statements on the going concern basis.

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. The unaudited condensed interim consolidated financial statements do not include any adjustments that would result if forecast cash flows were not achieved, if the existing creditors withdrew their support or if further financing could not be raised from current or potential investors.

During the year ended December 31, 2023, the Company raised gross proceeds of $3M through the issuance of shares to investors and $3.5M through the issuance of convertible debentures.

As at September 30, 2024, the Company had a deficit of $82,018,174 (December 31, 2023 - $79,032,310). Comprehensive loss for the nine months ended September 30, 2024 was $1,849,549 (nine months ended September 30, 2023 - $3,591,198). These conditions raise material uncertainties which may cast significant doubt as to whether the Company will be able to continue as a going concern. However, management believes 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. 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.

On November 16, 2023, Gairloch was incorporated.

The Company's operations include the consolidated results of Gairloch, 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. On September 1, 2021, the Company's common shares started trading under the symbol GALKF on the OTCQX in the United States. 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 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 IFRS issued and outstanding as of November 22, 2024 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, 2023. Any subsequent changes to IFRS that are given effect in the Company's annual consolidated financial statements for the year ending December 31, 2024 could result in restatement of these unaudited condensed interim consolidated financial statements.

4. Accounts Receivable and Prepaid Expenses

		As at			As at
		September 30,			December 31,
		2024			2023
Sales tax receivable - Canada	$	11,179		$	15,067
Valued added tax receivable - Northern Ireland		149,838			9,959
Accounts receivable		43,303			83,266
Prepaid expenses		1,116,899			1,488,588
	$	1,321,219		$	1,596,880

Prepaid expenses includes advances for consumables and for construction of the passing bays in the Omagh mine. Prepaid expenses includes also $1,000,000 pursuant to services agreement for the underground development at the Omagh Gold Project.

The following is an aged analysis of receivables:

		As at			As at
		September 30,			December 31,
		2024			2023
Less than 3 months	$	164,112		$	50,614
3 to 12 months		21,163			45,330
More than 12 months		19,045			12,348
Total accounts receivable	$	204,320		$	108,292

5. Inventories

		As at			As at
		September 30,			December 31,
		2024			2023
Concentrate inventories	$	-		$	18,184

 

6. Property, Plant and Equipment

		Freehold			Plant
		land and			and			Motor			Office			Development			Assets under
Cost		buildings			machinery			vehicles			equipment			assets (i)			construction			Total
Balance, December 31, 2022	$	2,252,053		$	8,721,798		$	220,866		$	216,029		$	21,402,040		$	-		$	32,812,786
Additions		-			-			-			-			3,423,820			26,939			3,450,759
Cash receipts from concentrate sales		-			-			-			-			(1,491,453	)		-			(1,491,453	)
Impairment		-			-			-			-			(3,353,077	)		-			(3,353,077	)
Foreign exchange adjustment		71,058			274,128			6,969			6,816			658,736			-			1,017,707
Balance, December 31, 2023		2,323,111			8,995,926			227,835			222,845			20,640,066			26,939			32,436,722
Additions		-			-			-			-			1,926,569			-			1,926,569
Transfer		-			28,928			-			-			-			(28,928	)		-
Cash receipts from concentrate sales (note 14)		-			-			-			-			(712,747	)		-			(712,747	)
Foreign exchange adjustment		171,505			661,628			16,820			16,451			1,510,289			1,989			2,378,682
Balance, September 30, 2024	$	2,494,616		$	9,686,482		$	244,655		$	239,296		$	23,364,177		$	-		$	36,029,226
Accumulated depreciation
Balance, December 31, 2022	$	1,876,242		$	6,378,013		$	158,615		$	144,067		$	-		$	-		$	8,556,937
Depreciation		3,954			482,088			17,864			11,097			-			-			515,003
Foreign exchange adjustment		59,213			201,755			5,062			4,581			-			-			270,611
Balance, December 31, 2023		1,939,409			7,061,856			181,541			159,745			-			-			9,342,551
Depreciation		2,454			303,460			10,399			7,320			-			-			323,633
Foreign exchange adjustment		155,405			531,346			13,830			12,095			-			-			712,676
Balance, September 30, 2024	$	2,097,268		$	7,896,662		$	205,770		$	179,160		$	-		$	-		$	10,378,860
Carrying value
Balance, December 31, 2023		383,702		$	1,934,070		$	46,294		$	63,100		$	20,640,066		$	26,939		$	23,094,171
Balance, September 30, 2024	$	397,348		$	1,789,820		$	38,885		$	60,136		$	23,364,177		$	-		$	25,650,366

(i) Development assets are expenditures for the underground mining operations in Omagh.

7. Exploration and Evaluation Assets

		Acquisition			Exploration
Cost		costs			costs			Total
Balance, December 31, 2022	$	-		$	2,665,313		$	2,665,313
Additions		1,140,115			1,162,710			2,302,825
Impairment		-			(282,493	)		(282,493	)
Foreign exchange adjustment		-			90,764			90,764
Balance, December 31, 2023		1,140,115			3,636,294			4,776,409
Additions		-			422,865			422,865
Foreign exchange adjustment		-			239,267			239,267
Balance, September 30, 2024	$	1,140,115		$	4,298,426		$	5,438,541
Carrying value
Balance, December 31, 2023	$	1,140,115		$	3,636,294		$	4,776,409
Balance, September 30, 2024	$	1,140,115		$	4,298,426		$	5,438,541

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, 2024 based on a risk-free discount rate of 1% (December 31, 2023 - 1%) and an inflation rate of 1.50% (December 31, 2023 - 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, 2024, the estimated fair value of the liability is $665,158 (December 31, 2023 - $611,452). Changes in the provision during the nine months ended September 30, 2024 are as follows:

		As at			As at
		September 30,			December 31,
		2024			2023
Decommissioning liability, beginning of period	$	611,452		$	582,441
Accretion		8,226			10,601
Foreign exchange		45,480			18,410
Decommissioning liability, end of period	$	665,158		$	611,452

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, 2023 - GBP  300,000), of which GBP 300,000 was funded as of September 30, 2024 (GBP 300,000 was funded as of December 31, 2023) and reported as long-term deposit of $542,400 (December 31, 2023 - $505,110).

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,
		2024			2023
Accounts payable	$	2,106,262		$	2,131,257
Accrued liabilities		1,274,354			1,531,585
Total accounts payable and other liabilities	$	3,380,616		$	3,662,842

The following is an aged analysis of the accounts payable and other liabilities:

		As at			As at
		September 30,			December 31,
		2024			2023
Less than 3 months	$	566,979		$	1,672,744
3 to 12 months		1,102,367			807,338
12 to 24 months		896,142			474,290
More than 24 months (see also note 17)		815,128			708,470
Total accounts payable and other liabilities	$	3,380,616		$	3,662,842

10.  Financing Facilities

Amounts payable on the Company's financial facilities are as follow:

		As at			As at
		September 30,			December 31,
		2024			2023
G&F Phelps
Financing facility, beginning of period	$	6,119,308		$	4,836,267
Financing facility transferred to due to related parties (i)		(7,096,775	)		-
Accretion		-			259,354
Interest		633,566			961,722
Shares for debt settlement		-			(100,000	)
Foreign exchange adjustment		343,901			161,965
		-			6,119,308
Less current portion		-			(6,119,308	)
Financing facilities - non-current portion	$	-		$	-

(i) During the nine months ended September 30, 2024, the G&F Phelps loans were transferred to Ocean Partners with the same terms.

11.  Convertible Debentures

(i) On December 20, 2023, the Company closed a $3,502,054 (US$ 2,627,000) convertible debenture. The convertible debenture is unsecured, is for a term of three year commencing on the date that it is issued, carries a coupon of 10% per annum and is convertible into common shares of the Company. Each debenture consists of US$1,000 principal amount of unsecured convertible debentures. The convertible debentures have a term of 36 months from the date of issuance with a conversion price of US$0.255 being the equivalent of a conversion price of $0.35 per conversion share. A four month hold period will apply to common shares converted through the convertible debenture. The hold period expired on April 21, 2024.

In accordance with the terms of the convertible debentures, if, at any time following the issuance of the convertible debentures, the closing price of the common shares of the Company on the TSXV equals or exceeds $0.70 per common share for 10 consecutive trading days or more, the Company may elect to convert all but not less than all of the outstanding principal amount of the convertible debentures into conversion shares at the conversion price, upon giving the holders of the convertible debentures not less than 30 calendar days advance written notice. On December 20, 2026, any outstanding principal amount of convertible debentures plus any accrued and unpaid interest thereon shall be repaid by the Company in cash.

Interest on the principal amount outstanding under each convertible debenture shall accrue during the period commencing on December 20, 2023 until December 20, 2026 and shall be payable in cash on an annual basis on December 31st of each year (each, an "Interest Payment Date"); provided, however, that the first interest payment date shall be December 31, 2024. Each convertible debenture shall bear interest at a minimum interest rate of 10% per annum (the "Base Interest Rate"). During each interest period (an "Interest Period"), being the period commencing on December 20, 2023 to but excluding the first Interest Payment Date and thereafter the period from and including an Interest Payment Date to but excluding the next Interest Payment Date or other applicable payment date, the Base Interest Rate will be adjusted based on a gold price of US$2,000 per ounce, with the Base Interest Rate being increased by 1% per annum for each US$100 in which the average gold price for such Interest Period exceeds US$2,000 per ounce, up to a maximum interest rate of 30% per annum; provided, however, that, without the prior acceptance of the TSXV, the average interest rate shall not exceed 24% per annum during the term of the convertible debentures. Any adjustment to the Base Interest Rate in respect of an Interest Period shall be calculated based on the average gold price quoted by the London Bullion Market Association, being the LBMA Gold Price PM, in respect of the Interest Period ending on December 31, 2024, from December 20, 2023 to and including December 15, 2024, and for each subsequent Interest Period, from January 1st to and including December 15th of that year or 15 days prior to the applicable payment date.

Melquart, an insider and control person of the Company (as defined by the TSXV), subscribed for US$875,000. Ocean Partners, which has a common director with the Company, acquired US$875,000 aggregate principal amount of convertible debentures.

The Company paid a cash finder's fee of US$40,500 (CAD$53,990) and issued 158,823 non-transferable finder's warrants to Canaccord Genuity Corp. in consideration for providing certain finder services to the Company under the offering. Each finder warrant is exercisable to acquire one common share in the capital of the Company at an exercise price of $0.35 per common share at any time on or before December 20, 2026. The fair value of the 158,823 finder warrants was estimated at $24,670 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 107.02%, risk-free interest rate - 3.71% and an expected average life of 3 years.

The debentures consist of the liability component and conversion feature. Due to the convertible debenture being denominated in US$, the conversion feature has been presented as a non-cash derivative liability.

On the date of issuance, the fair value of the derivative liability was estimated to be $1,495,208 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 95.0%, risk-free interest rate - 3.94% and an expected average life of 3 years.

As at December 31, 2023, the fair value of the derivative liability was revalued at $1,245,627 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 94.9%, risk-free interest rate - 3.91% and an expected average life of 2.97 years.

On issuance the fair value of the liability component was recorded at $2,006,846, discounted at an effective interest rate of 37%.

The Company incurred transaction costs of $153,481 which was allocated pro-rata on the value of the conversion feature and the liability component.

During the year ended December 31, 2023, the Company recorded accretion expense of $33,265 and interest expense of $29,184 as loan interest and bank charges less deposit interest in the consolidated statement of loss. 

As at September 30, 2024, the fair value of the derivative liability was revalued at $385,491 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 100%, risk-free interest rate - 2.94% and an expected average life of 2.22 years.

During the three and nine months ended September 30, 2024, the Company recorded accretion expense of $185,128 and $553,850, respectively and interest expense of $89,587 and $268,019, respectively as loan interest and bank charges less deposit interest in the unaudited condensed interim consolidated statement of loss. 

During the nine month ended September 30, 2024, $82,404 (US$60,000) of convertible debenture was converted into 235,294 common shares of the Company.

(ii) On February 5, 2024, the Company announced that it closed a debt settlement transaction, pursuant to which the Company settled US$2,711,000 of indebtedness owing to Ocean Partners through the issuance of US$2,711,000 aggregate principal amount of unsecured convertible debentures of the Company.

The convertible debenture issued in connection with the debt settlement were issued on substantially the same terms as the unsecured convertible debentures closed on December 20, 2023. The convertible debentures issued pursuant to the debt settlement are subject to a four-month hold period which will expire on June 6, 2024.

The debentures consist of the liability component and conversion feature. Due to the convertible debenture being denominated in US$, the conversion feature has been presented as a non-cash derivative liability.

On the date of issuance, the fair value of the derivative liability was estimated to be $748,337 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 95.0%, risk-free interest rate - 4.28% and an expected average life of 2.87 years.

The fair value of the liability component was recorded at $2,918,833, discounted at an effective interest rate of 20%.

As at September 30, 2024, the fair value of the derivative liability was revalued at $407,116 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 100%, risk-free interest rate - 2.94% and an expected average life of 2.22 years.

During the three and nine months ended September 30, 2024, the Company recorded accretion expense of $148,660 and $401,585, respectively and interest expense of $93,495 and $252,565, respectively as loan interest and bank charges less deposit interest in the unaudited condensed interim consolidated statement of loss. 

		Convertible			Derivative
		debenture			liability
Balance, December 31, 2022	$	-		$	-
Principal amount (i)		3,502,054			-
Derivative liability component (i)		(1,495,208	)		1,495,208
Transaction costs (i)		(153,481	)		-
Transaction costs allocated to derivative liability component (i)		7,695			(7,695	)
Interest expense (i)		29,184			-
Accretion expense (i)		33,265			-
Change in fair value (i)		-			(241,886	)
Balance, December 31, 2023		1,923,509			1,245,627
Principal amount (ii)		3,667,170			-
Derivative liability component (ii)		(748,337	)		748,337
Convertible debenture converted (i)		(82,404	)		-
Interest expense (i)(ii)		520,584			-
Accretion expense (i)(ii)		955,435			-
Change in fair value (i)(ii)		-			(1,201,357	)
Balance, September 30, 2024	$	6,235,957		$	792,607

 12.  Share Capital and Reserves

a) Authorized share capital

At September 30, 2024, 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, 2024, the issued share capital amounted to $71,782,203. The continuity of issued share capital for the periods presented is as follows:

		Number of
		common
		shares			Amount
Balance, December 31, 2022		103,518,509		$	69,664,056
Shares issued in private placement (i)		8,230,951			2,963,142
Shares issued for services arrangement (ii)		933,334			420,000
Shares issued for debt settlement (iii)		2,080,609			749,020
Warrants issued (i)(iii)		-			(1,609,634	)
Share issue costs (i)		-			(245,168	)
Exercise of warrants		78,000			40,733
Balance, September 30, 2023		114,841,403		$	71,982,149

 

		Number of common shares			Amount
Balance, December 31, 2023		114,841,403		$	71,809,999
Shares cancelled		(306,110	)		(110,200	)
Convertible debenture converted (note 11(i))		235,294			82,404
Balance, September 30, 2024		114,770,587		$	71,782,203

(i) On March 27, 2023, the Company closed a non-brokered private placement of 8,230,951 units at a price of $0.36 per unit for gross proceeds of $2,963,142. Each unit consists of one common share of the Company and one common share purchase warrant, with each warrant entitling the holder to purchase an additional common share at a price of $0.55 per share until March 27, 2028. The fair value of the 8,230,951 warrants was estimated at $1,284,806 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 126.22%, risk-free interest rate - 2.96% and an expected average life of 5 years. 

The Company paid the agents a cash commission equal to $130,966 and issued 237,162 non-transferable broker warrants of the Company. Each broker warrant is exercisable to acquire one common share at an exercise price of $0.36 until March 27, 2025. The fair value of the 237,162 warrants was estimated at $40,175 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 99.18%, risk-free interest rate - 3.61% and an expected average life of 2 years.

Ocean Partners acquired 691,666 units for consideration of $249,000 and Brendan Morris, an officer of the Company, acquired 468,416 units for consideration of $168,630.

(ii) The Company has entered into an agreement to acquire the historical Gairloch drill and exploration database for (i) a payment of $420,000 (approximately GBP 252,153), to be satisfied through the issuance of common shares of the Company based on the 5-day volume weighted average price at the time of signing (subject to the approval of the TSXV) and (ii) GBP 50,000 in cash. On April 13, 2023, the Company issued 933,334 common shares per terms of the agreement.

(iii) On April 26, 2023, the Company agreed to the terms of a proposed shares-for-debt transaction with several arm's length creditors of the Company and agreed to settle a total of approximately $749,020 of indebtedness through the issuance of an aggregate of 2,080,609 units a deemed price of $0.36 per unit. Each unit consists of one common share of the Company and one common share purchase warrant, with each warrant entitling the holder to purchase an additional common share at a price of $0.55 per share until April 26, 2028. The fair value of the 2,080,609 warrants was estimated at $324,828 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 126.25%, risk-free interest rate - 2.98% and an expected average life of 5 years.

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, 2022		24,051,900		$	0.45
Issued (notes 12(b)(i)(iii) and 15(a)(vi))		11,148,722			0.54
Exercised		(78,000	)		0.40
Expired		(14,707,231	)		0.40
Balance, September 30, 2023		20,415,391		$	0.53
Balance, December 31, 2023		19,658,904		$	0.54
Expired		(820,000	)		0.45
Balance, September 30, 2024		18,838,904		$	0.54

The following table reflects the actual warrants issued and outstanding as of September 30, 2024:

					Grant date			Exercise
		Number			fair value			price
Expiry date		of warrants			($)			($)
January 31, 2025		500,000			65,527			0.55
February 13, 2025		100,000			16,984			0.41
February 28, 2025		7,666,669			1,644,859			0.55
March 27, 2025		407,962			40,175			0.36
December 20, 2026		158,823			24,670			0.35
March 27, 2028		7,924,841			1,284,806			0.55
April 26, 2028		2,080,609			324,828			0.55
		18,838,904			3,401,849			0.54

 

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, 2022		6,152,500		$	0.78
Expired		(25,000	)		1.10
Cancelled (i)		(340,000	)		0.76
Balance, September 30, 2023		5,787,500		$	0.78
Balance, December 31, 2023		5,862,500		$	0.78
Granted (ii)		3,175,000			0.23
Expired		(185,000	)		0.90
Cancelled (i)		(162,500	)		0.61
Balance, September 30, 2024		8,690,000		$	0.58

(i) The portion of the estimated fair value of options granted in the current and prior periods and vested during the three and nine months ended September 30, 2024, amounted to $73,061 and $358,929, respectively (three and nine months ended September 30, 2023 - $29,277 and $329,658, respectively). In addition, during the three and nine months ended September 30, 2024, nil and 162,500 options granted in the current and prior years were cancelled (three and nine months ended September 30, 2023 - nil and 340,000 options cancelled).

(ii) On April 29, 2024, the Company granted 3,175,000 stock options to directors, officers, employees and consultants of the Company to purchase common shares at $0.23 per share until April 29, 2029. The options will vest as to one third immediately and one third on each of April 29, 2025 and April 29, 2026. The fair value attributed to these options was $589,000 and the vested portion was expensed in the unaudited condensed interim consolidated statements of loss and credited to equity settled share-based payments reserve.

The following table reflects the actual stock options issued and outstanding as of September 30, 2024:

					Weighted average						Number of
					remaining			Number of			options			Number of
		Exercise			contractual			options			vested			options
Expiry date		price ($)			life (years)			outstanding			(exercisable)			unvested
May 19, 2026		0.86			1.63			3,560,000			3,560,000			-
June 21, 2026		0.73			1.72			425,000			425,000			-
August 27, 2026		0.86			1.91			20,000			20,000			-
May 3, 2027		0.60			2.59			1,560,000			1,560,000			-
April 29, 2029		0.23			4.58			3,125,000			1,041,667			2,083,333
		0.58			2.87			8,690,000			6,606,667			2,083,333

 

13. Net Loss per Common Share

The calculation of basic and diluted loss per share for the three and nine months ended September 30, 2024 was based on the loss attributable to common shareholders of $740,629 and $2,985,864, respectively (three and nine months ended September 30, 2023 - $1,313,355 and $4,062,485, respectively) and the weighted average number of common shares outstanding of 114,770,587 and 114,725,407, respectively (three and nine months ended September 30, 2023 - 114,841,403 and 110,976,336, respectively) for basic and diluted loss per share. Diluted loss did not include the effect of 18,838,904 warrants (three and nine months ended September 30, 2023 - 20,415,391) and 8,690,000 options (three and nine months ended September 30, 2023 - 5,787,500) for the three and nine months ended September 30, 2024, as they are anti-dilutive.

14. 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, 2024 totalled approximately US$197,000 (CAD$265,930) and US$528,000 (CAD$712,747), respectively (three and nine months ended September 30, 2023 - US$333,000 (CAD$450,000) and US$849,000 (CAD$1,148,000), respectively. However, until the mine reaches the commencement of commercial production, the net proceeds from concentrate sales will be offset against Development assets.

15. Related Party Disclosures

Related parties pursuant to IFRS 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 exchange amount 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,
			2024			2023			2024			2023
Interest on related party loans	(i)	$	156,096		$	179,062		$	453,202		$	528,233

(i) Refer to note 15(a)(iv)(vi).

(ii) Refer to note 12(b).

(iii) Refer to note 11.

(iv) As at September 30, 2024, the Company owes Ocean Partners $11,385,141 (December 31, 2023 - $5,673,150) which is recorded as due to related parties on the unaudited condensed interim consolidated statement of financial position.

		September 30, December 31,
		2024			2023
Balance, beginning of period	$	5,673,150		$	4,978,069
Converted to convertible debentures (note 11)		(2,575,382	)		-
Loans transferred to Ocean Partners (note 10)		7,096,775			-
Repayment		-			(24,735	)
Accretion		-			116,569
Interest		390,042			729,033
Foreign exchange adjustment		800,556			(125,786	)
Balance, end of period		11,385,141			5,673,150
Less current balance		(11,385,141	)		(5,673,150	)
Due to related parties - non-current balance	$	-		$	-

(v) In February 2024, the loan balance due to Ocean Partner was converted to convertible debentures. Refer to note 11. As at September 30, 2024, balance related to the loan is recorded as other liability on the unaudited condensed interim consolidated statement of financial position is $nil (December 31, 2023 - $1,187,437).

(vi)

		September 30,			December 31,
		2024			2023
Melquart Limited
Financing facilities, beginning of period	$	638,432		$	-
Financing facility received		-			580,392
Less bonus warrants issued		-			(16,984	)
Accretion		6,370			7,077
Interest		63,160			64,095
Foreign exchange adjustment		49,927			3,852
Balance, end of period		757,889			638,432
Less current portion		(757,889	)		-
Due to related parties - non-current balance	$	-		$	638,432

 

(b) Remuneration of officer and directors of the Company was as follows:

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2024			2023			2024			2023
Salaries and benefits (1)	$	88,695		$	115,413		$	309,009		$	340,062
Stock-based compensation		50,266			20,992			245,962			242,340
	$	138,961		$	136,405		$	554,971		$	582,402

⁽¹⁾ Salaries and benefits include director fees. As at September 30, 2024, due to directors for fees amounted to $140,000 (December 31, 2023 - $140,000) and due to officers, mainly for salaries and benefits accrued amounted to $139,429 (December 31, 2023 - $25,106), and is included with due to related parties.

(c) As at September 30, 2024, the issued shares of Galantas total 114,841,403. Ross Beaty owns 3,744,747 common shares of the Company or approximately 3.3% of the outstanding common shares. Premier Miton owns 4,848,243 common shares of the Company or approximately 4.2%. Melquart owns, directly and indirectly, 28,140,195 common shares of the Company or approximately 24.5% of the outstanding common shares of the Company. G&F Phelps owns 5,353,818 common shares of the Company or approximately 4.7%. Eric Sprott owns 10,166,667 common shares of the Company or approximately 8.9%. Mike Gentile owns 6,217,222 common shares of the Company or approximately 5.4%.

Excluding the Melquart Ltd, Premier Miton, Mr. Beaty, Mr. Phelps, Mr. Sprott and Mr. Gentile shareholdings discussed above, the remaining 49% 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 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.

16. 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, 2024		United Kingdom			Canada			Total
Current assets	$	551,033		$	1,153,197		$	1,704,230
Non-current assets	$	29,789,956		$	1,841,351		$	31,631,307
Revenues	$	-		$	-		$	-
December 31, 2023		United Kingdom			Canada			Total
Current assets	$	1,831,473		$	2,376,856		$	4,208,329
Non-current assets	$	26,702,212		$	1,673,478		$	28,375,690
Revenues	$	-		$	-		$	-

 

17. Contingency

During the year ended December 31, 2010, the Company's subsidiary Omagh received a payment demand from Her Majesty's Revenue and Customs ("HMRC") in the amount of $550,156 (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 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 year ended December 31, 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 is unable to make a reliable estimate of the amount of the potential additional interest that may be applied by HMRC.

 

 

 

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