Galantas sales still nil as it moves towards commercial production

Galantas Gold reported nil sales revenue in its first quarter on Friday, in line with the comparative period a year earlier, following the start of concentrate shipments in the third quarter.

The AIM-traded firm said provisional concentrate sales revenue totalled $0.57m for the first quarter, compared to $0.19m in the prior year.

Until the mine begins commercial production, the board said the net proceeds from concentrate sales were being offset against development assets.

Its net loss for the quarter totalled to $0.64m, narrowing from $0.68m a year earlier, while the cash outflow from operating activities before changes in non-cash working capital amounted to $0.3m, compared to $0.35m in the first quarter of 2020.

The company said it had a cash balance of $0.49m as at 31 March, down from $0.94m 12 months prior, while its working capital deficit widened to $8.53m from $7.3m year-on-year.

“Certain underground work continued during 2020,” the board said in its statement.

“The processing plant operated on a limited basis with feedstock for the plant being from low grade stock.

“In March 2020 and following UK government guidelines regarding Covid-19, processing operations temporarily ceased until May when the company announced that concentrate processing had recommenced.”

The firm carried out maintenance on the processing plant during the milling suspension, to minimise future maintenance interruptions.

The restart followed a review of Northern Ireland and British government health advice around Covid-19, a risk assessment, and the introduction of appropriate modifications to working practices.

“On 3 February 2021, the company announced that a formal agreement regarding blasting was reached between the company's operating subsidiary and the Police Service of Northern Ireland (PSNI).

“The PSNI have responsibilities regarding the supervision of the use of blasting materials in Northern Ireland.

“The agreement provides the potential for a materially improved economic arrangement for an expansion of underground blasting, required for full production, to take place at the Omagh Mine.”

Galantas said the agreement followed a “comprehensive review” by the PSNI and regulators, and on 12 March, it announced that limited blasting underground had re-started.

“Development mining of the Kearney gold vein has re-started on a single shift basis.

“It is expected to produce a feed of higher gold grade for the processing plant than the current feed, which comes from low grade stock.

“Total concentrate production is expected to rise, driven by an expected higher feed grade.”

During the period of suspension, key mining skill sets were preserved by the incorporation of personnel within process plant operations, the firm explained.

The limited re-start was being carried out within limited cash resources, using a single existing equipment suite, which Galantas said was fully operational.

“Underground blasting continued with mining on a single shift basis.

“As expected, development of the Kearney vein has produced a feed of higher gold grade for the processing plant than the existing feed, which comes from low grade stock.

“Until the mine reaches the commencement of commercial production, the net proceeds from concentrate sales will be offset against development assets.”

At 1226 BST, shares in Galantas Gold Corporation were down 4.75% at 38.1p.