Galantas Gold plans to raise up to C$6.6mln to bring Northern Ireland gold mine to full production

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Galantas Gold Corp (LON:GAL, TSXV:GAL) plans to raise as much as C$6.6mln (£3.8mln) through a private placement to bankroll the Galantas gold mine in Northern Ireland into full production and said its chief executive will step down.

The placement consists of a minimum of 17mln to 22 mln units, comprising one common share and one warrant, at C$0.30 each. The gross proceeds are expected to be between C$5.1mln and C$6.6mln.

Each warrant will be exercisable into one additional share at an exercise price of C$0.40 for 24 months from the closing date. There will be a four-month hold period on the trading of securities issued in connection with this offering.

The net funds raised by the dual-listed company will be mainly used for bringing the Galantas mine in Omagh into full commercial production and for exploration to expand the high-grade gold resources.

Melquart Ltd, the company’s largest shareholder, is expected to subscribe for 2 mln units for gross proceeds of C$600,000, and chief executive Roland Phelps is expected to subscribe for units worth the equivalent of £250,000 or about C$435,000, it said.

On closing, Phelps will retire as CEO and as a member of the board and be replaced by Mario Stifano, an experienced mining executive who raised over $700 million in capital for mining companies such as Lake Shore Gold Corp, Cordoba Minerals Corp and Dore Copper Mine Corp. Stifano will be nominated as an Ocean Partners UK Ltd representative on the board following regulatory approval.

Commodities trader Ocean Partners will subscribe for a minimum of 1.67mln units and will purchase any additional units up to a maximum of C$4,500,000 required to reach the minimum gross proceeds of C$5,100,000, including Melquart’s subscription.

On the closing date, the board of Galantas will appoint an Ocean Partners nominee, Brent Omland, as a director, to replace Phelps on the board. Omland, a Canadian Chartered Accountant with 15 years’ experience in the mining, metals and trading sectors, is currently chief financial officer of Ocean Partners.

An existing offtake agreement with Ocean Partners is expected to be extended from a minimum total of 50,000 tonnes of concentrate deliveries to a minimum total of 150,000 tonnes and marketed at market rates, Galantas said.

“The current operation, brought to full production, provides an exciting opportunity in a highly prospective gold district,” said Stifano. “In line with the new capital and plans to move to full production, following the closing date, I plan to introduce a bolstered and experienced operating team.”

The company will also follow up on the significant exploration potential of numerous veins including the Joshua vein that intersected 21.6 meters of 9.9 grams per tonne gold on the major structure that hosts the world-class Dalradian gold project, as well as New Found Gold’s recent Queensway discovery.

“With the support of Ocean Partners as a critical long-term offtaker and partner, we believe we can unlock significant value for all stakeholders and shareholders,” Stifano added.

On the closing date of the private placement, the maturity date of an Ocean Partners loan due on December 31, 2021 will be extended to December 31, 2023 and the maturity date of a G&F Phelps Ltd loan due on June 30, 2021 will be extended to December 31, 2023. G&F Phelps is a company controlled by current CEO Phelps.

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