Galantas Reports Results for Third Quarter 2011
November 28 2011 - 8:00AM
Marketwired Canada
Galantas Gold Corporation (TSX VENTURE:GAL)(AIM:GAL) (the 'Company') results for
the three and nine months ended September 30, 2011 have been published.
Net Income for the three months ended September 30, 2011 amounted to CAD$
445,646 compared to a Net Income of CAD$ 206,069 for the three months ended
September 30, 2010. When Net Income is adjusted for non-cash items on the Income
Statement (before changes in non-cash working capital), the cash generated from
operating activities amounted to CAD$ 792,682 for the third quarter of 2011
compared to CAD$ 358,514 for the third quarter of 2010.
Net Income for the nine months ended September 30, 2011 amounted to CAD$
1,165,045 compared to a Net Income of CAD$ 810,934 for the nine months ended
September 30, 2010. When Net Income is adjusted for non cash items on the Income
Statement (before changes in non-cash working capital), the cash generated from
operating activities amounted to CAD$ 2,001,466 for the first nine months of
2011 compared to CAD$ 1,538,537 for the first nine months of 2010.
The main reason for the improved results was the higher gold prices achieved
together with increased production at its Northern Ireland subsidiary during
2011. Gains were partially offset, however, by an increase in costs during the
two intervals.
Production at the Omagh mine during the three months ended September 30, 2011
was well above production levels achieved during both the first quarter of 2011
and the corresponding third quarter of 2010 but below the record quarterly
production achieved during the second quarter of 2011. The three and nine-month
figures to September 30, 2011 and their comparative 2010 figures are summarized
in the table below.
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Three Months Three Months Nine Months Nine Months
to September to September to September to September
30 2011 30 2010 30 2011 30 2010
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Tonnes Milled 13,707 8,375 36,539 29,729
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Average Grade g/t
gold 4.34 4.75 4.73 4.73
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Concentrate Dry
Tonnes 545 309 1,582 1,226
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Gold Grade
(concentrate) 91.2 131 98.3 119.9
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Gold Produced (oz) 1,597 1,303 5,007 4,729
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Gold Produced (kg) 49.6 40.5 155.6 147.1
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Silver Grade 236.5 296.1 239.4 337.6
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Silver Produced (oz) 4,142 2,942 12,176 13,299
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Silver Produced (kg) 128.8 91.5 378.7 413.6
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Lead Produced tonnes 56.3 51 227 202.4
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Gold Equivalent (oz) 1,766 1,426 5,658 5,283
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The 2011 production figures and metal contents are provisional and subject to
averaging or umpiring provisions under the concentrate off - take agreement
detailed in a press release dated October 3, 2007.
Highlights of the 2011 third quarter and first nine months results, which are
expressed in Canadian Dollars (CAD$), are:
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Third Quarter Ended Nine Months Ended
All figures denominated in September 30 September 30
Canadian Dollars (CAD$)
2011 2010 2011 2010
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Revenue 2,510,985 1,759,978 6,979,698 5,244,089
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Cost of Sales 1,247,229 1,118,807 3,621,382 3,125,974
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Amortization 222,079 133,961 603,939 579,847
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Income (loss) before the
undernoted 1,041,677 507,210 2,754,377 1,538,268
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General administrative
expenses 655,568 250,566 1,647,918 698,390
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Foreign exchange/(gain)
loss (59,537) 50,575 (58,586) 28,944
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Net Income for the period 445,646 206,069 1,165,045 810,934
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During the third quarter, Omagh Minerals Limited ('OML') received an
environmental compliance study conducted by the Northern Ireland Environment
Agency. The report confirmed that OML continued to be within terms of its
consent and met the relevant Environmental Quality Standards.
The Company notes that a further delay has been introduced into the planning
process regarding road transport of surplus rock. The application is recommended
for approval by the Planning Service, Department of Environment, Northern
Ireland but has not yet been determined. OML does not have clarity as to a
timetable for removal of surplus rock, for which storage at the mine site is
limited. Consequently an employment review is continuing which is likely to lead
to a reduction in the number of employees, via redundancy procedures (after
statutory consultation is complete), due to a switch to the processing of lower
grade material.
An active program of drilling is taking place to assess the gold and silver
mineralisation at depth on the Omagh property in order to examine potential for
underground mining. During 2011 (to the end of the third quarter), a total of
2558.6 metres has been drilled and a total of 33 drill holes completed. Detailed
financial studies have been carried out to estimate the cost of underground
development and these studies will be released in conjunction with a revised
resource report for the property. The report will comment upon the financial
studies and be to a standard suitable for publication in Canada (National
Instrument 43-101). An interim report is scheduled for late spring 2012.
Plans to develop an underground mine are at an advanced stage and are expected
to be submitted for permitting around the end of 2011. The plans include a cut
and cover adit within the backfilled open pit (being currently worked), with a
spiral decline to the base of a proposed Phase 1 Underground Mine, and a
raise-bored shaft to provide emergency egress and ventilation. The principal
mining method proposed is shrinkage-stoping and long term stability will be
assured by backfilling with waste rock and clean tailing sands. Potentially the
mine may progress to deeper levels than that planned for Phase 1 but this will
be subject to the identification of further resources by drilling. The current
drilling program is designed to identify resources to approximately 350 metres
below surface, for a potential Phase 1 mine. Permitting procedures have been
commenced in conjunction with continued drilling to enable an earlier
determination of planning permits.
An Environmental Impact Assessment (EIA), based upon new data and that from 14
years of environmental monitoring, is being drawn up to be submitted to Planning
Service, Northern Ireland. The EIA considers the processes involved, including
impact on water, air and noise, amongst other environmental factors.
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.
This disclosure has been reviewed by Leo O' Shaughnessy (Chief Financial
Officer) and Roland Phelps (President and CEO), who are qualified under the
meaning of N.I 43-101 and who have also reviewed this release for the purposes
of AIM requirements. The information is based upon financial and operating 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, the commercial viability of processing lower grade material, actual
and estimated metallurgical recoveries; mining operational risk; regulatory
restrictions, including environmental regulatory restrictions and liability;
risks of sovereign involvement; speculative nature of gold exploration;
dilution; competition; loss of key employees; additional funding requirements;
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.
Galantas Gold Corporation Issued and Outstanding Shares total 235,650,055.
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