Galantas Gold shares slide on Northern Ireland approval delays

Galantas Gold Corporation announced a temporary suspension of blasting operations at its Omagh gold mine in Northern Ireland on Tuesday.

The AIM-traded firm said blasting operations were currently limited, since all blasting must be supervised by the Police Service of Northern Ireland.

It said that at present, the arrangements were not sufficient for the desired level of operations.

The company said it had been working with authorities to increase blasting availability to normal levels for an underground mine.

Progress had been made, and “substantive investment” made in accordance with recommendations, however, the firm said it was still awaiting final approvals from the authorities in order to be able to implement its increased blasting protocols.

Galantas said it had been waiting “for some time” for those approvals, and although the company expected to receive approvals based on previous discussions with the relevant authorities, a date for receipt of the required approvals - and therefore the date on which the increased blasting schedule would be implemented - was 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,” the Galantas board said in its statement.

“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.”

Galantas said it expected it would have to raise funds within the next six months, and would update the market in due course.

On the operational front, the firm said around two kilometres of underground drivages had been developed, with exposure of the main Kearney vein on four levels.

A fifth level was near the point of intersection, with the mine serviced by a decline tunnel of one-in-six gradient, of dimensions approximately 4.5m by 4.5m.

Recent vein intersections on the 1060, or fourth, level had proven to be “strongly mineralised”, with vein sections some three metres wide and of grade mapped at over 10 grams of gold per tonne.

“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,” the board said.

“Detailed mapping has been made of the exposed mineralisation underground by in-house personnel.”

Those studies were said to be more intense than achievable by core-drilling, because of the continuity of exposure.

Zones of high grade mineralisation had been identified, linking adjacent levels, and the reasons behind the emplacement of those zones was considered to now be identified.

“The implication is that such zones are expected to continue at depth, with enhanced exploration potential for targeting high grade gold resources particularly to the north and within the company's license area,” the board explained.

As at 1217 GMT, shares in Galantas Gold were down 44.44% at 2p.