TIDMGAL
RNS Number : 5375X
Galantas Gold Corporation
21 December 2023
GALANTAS GOLD ANNOUNCES CLOSING OF US$2.6 MILLION PRIVATE
PLACEMENT OF UNSECURED CONVERTIBLE DEBENTURES AND TERMS OF DEBT
SETTLEMENT TRANSACTION
Not for distribution to United States news wire services or for
dissemination in the United States
DECEMBER 21 , 2023, TORONTO, CANADA - Galantas Gold Corporation
(TSX-V & AIM: GAL; OTCQX: GALKF) ("Galantas" or the "Company")
is pleased to announce the closing of its previously announced
non-brokered private placement, pursuant to which the Company sold
US$2,627,000 aggregate principal amount of unsecured convertible
debentures of the Company (the "Debentures"), in the principal
amount of US$1,000 per Debenture (the "Offering"). The net proceeds
of the Offering are expected to be used for exploration and
development, working capital and for general corporate
purposes.
Each Debenture is convertible at the option of the holder
thereof into common shares in the capital of the Company (the
"Conversion Shares") at a conversion price of US$0.255 per
Conversion Share (the "Conversion Price") at any time prior to 5:00
p.m. (Toronto time) on the last business day immediately preceding
December 20, 2026 (the "Maturity Date"). In accordance with the
terms of the Debentures, if, at any time following the issuance of
the Debentures, the closing price of the common shares of the
Company on the TSX Venture Exchange (the "TSXV") equals or exceeds
C$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 Debentures into Conversion
Shares at the Conversion Price, upon giving the holders of the
Debentures not less than 30 calendar days advance written notice.
On the Maturity Date, any outstanding principal amount of
Debentures plus any accrued and unpaid interest thereon shall be
repaid by the Company in cash.
Interest on the principal amount outstanding under each
Debenture shall accrue during the period commencing on the date
hereof (the "Closing Date") until the Maturity Date and shall be
payable in cash on an annual basis on December 31(st) of each year
(each, an "Interest Payment Date"); provided, however, that the
first Interest Payment Date shall be December 31, 2024. Each
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 the Closing Date
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 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 the Closing Date to and including December 15, 2024, and for
each subsequent Interest Period, from January 1(st) to and
including December 15(th) of that year or 15 days prior to the
applicable payment date.
In connection with the Offering, the Company paid a cash
finder's fee of US$40,500 and issued 158,823 non-transferable
finder's warrants ("Finder 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 C$0.35 per common share at any time on or before December 20,
2026.
In connection with the Offering, Ocean Partners UK Ltd. acquired
US$875,000 aggregate principal amount of Debentures.
The Offering remains subject to the final acceptance of the
TSXV. The securities issued pursuant to the Offering are subject to
a four-month hold period under applicable Canadian securities laws
which will expire on April 21, 2024.
The securities offered have not been, nor will they be,
registered under the United States Securities Act of 1933, as
amended, or any state securities law, and may not be offered or
sold in the United States absent registration or an exemption from
such registration requirements. This news release shall not
constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of the securities in any state in which
such offer, solicitation or sale would be unlawful.
Debt Settlement Transaction
The Company is also pleased to announce the terms of a proposed
debt settlement transaction (the "Debt Settlement") with an arm's
length creditor of the Company pursuant to which the Company
intends to settle approximately US$2,712,000 of indebtedness
through the issuance of US$2,712,000 aggregate principal amount of
Debentures on substantially the same terms as the Debentures issued
under the Offering.
Closing of the Debt Settlement is expected to occur on or about
December 29, 2023, and remains subject to certain closing
conditions including, but not limited to, the receipt of all
necessary approvals, including the conditional acceptance of the
TSXV. The securities issued pursuant to the Debt Settlement will be
subject to a four-month hold period under applicable Canadian
securities laws.
61-101 Disclosure
In connection with the Offering, Melquart Ltd. ("Melquart")
subscribed for US$875,000 aggregate principal of Debentures.
Melquart is a "related party" of the Company by virtue of being a
control person of the Company within the meaning of Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions ("MI 61-101"). Accordingly, the participation
of Melquart in the Offering constitutes a "related party
transaction" for purposes of MI 61-101. The Company has completed
the Offering in reliance on exemptions from the formal valuation
and minority approval requirements of MI 61-101. The Company is
exempt from the formal valuation requirement in Section 5.4 of MI
61-101 in reliance on Section 5.5(b) of MI 61-101 as no securities
of the Company are listed or quoted on a specified market under MI
61-101. Additionally, the Company is exempt from the minority
approval requirement in Section 5.6 of MI 61-101 in reliance on
Section 5.7(1)(a) of MI 61-101 as neither the fair market value of
the subject matter of, nor the fair market value of the
consideration for, the Offering, insofar as it involves "interested
parties", exceeds 25% of the Company's market capitalization as
calculated in accordance with MI 61-101. The Company did not file a
material change report more than 21 days before the expected
closing date of the Offering as the participation therein by
Melquart was not confirmed until shortly prior to closing, and the
Company wished to close the Offering as expeditiously as
possible.
Melquart is also deemed a related party of the Company by virtue
of being a Substantial Shareholder of the Company as defined in the
AIM Rules for Companies. As a consequence, the Directors of the
Company consider, having consulted with their nominated adviser,
Grant Thornton UK LLP, that the terms of Melquart's involvement in
the Offering are fair and reasonable insofar as shareholders are
concerned.
About Galantas Gold Corporation
Galantas Gold Corporation is a Canadian public company that
trades on the TSXV and the London Stock Exchange AIM market, both
under the symbol GAL. It also trades on the OTCQX Exchange under
the symbol GALKF. The Company's strategy is to create shareholder
value by operating and expanding gold production and resources at
the Omagh Project in Northern Ireland, and exploring the Gairloch
Project hosting the Kerry Road gold-bearing VMS deposit in
Scotland.
Enquiries
Galantas Gold Corporation
Mario Stifano: Chief Executive Officer
Email: info@galantas.com
Website: www.galantas.com
Telephone: +44(0)28 8224 1100
Grant Thornton UK LLP (AIM Nomad)
Philip Secrett, Harrison Clarke, Enzo Aliaj
Telephone: +44(0)20 7383 5100
SP Angel Corporate Finance LLP (AIM Broker)
David Hignell, Charlie Bouverat (Corporate Finance)
Grant Barker (Sales & Broking)
Telephone: +44(0)20 3470 0470
Forward-Looking Statements
This news 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 the
use of proceeds of the Offering, the terms of the Debt Settlement,
the timing and ability of the Company to close the Debt Settlement
(if at all) and on the terms announced, the timing and ability of
the Company to receive necessary regulatory approvals in respect of
the Offering and the Debt Settlement, and the plans, operations and
prospects of the Company. 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'
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 news 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 news release, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
(UK) DEALING NOTIFICATION FORM
FOR USE BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITY AND
THEIR CLOSELY ASSOCIATED PERSONS
1. Details of the person discharging managerial responsibilities/person
closely associated
a) Name: Ocean Partners UK Ltd
----------------------------------- ----------------------------------
Reason for the notification
2.
-----------------------------------------------------------------------
a) Position/status: Ocean Partners UK Ltd
is a person closely associated
with Brent Omland, a Director
of Galantas
----------------------------------- ----------------------------------
b) Initial notification/Amendment: Initial Notification
----------------------------------- ----------------------------------
3. Details of the issuer, emission allowance market
participant, auction platform, auctioneer or auction
monitor
-----------------------------------------------------------------------
a) Name: Galantas Gold Corporation
----------------------------------- ----------------------------------
b) LEI: LEI: 213800JKVPLLKO4KVB93
----------------------------------- ----------------------------------
4. Details of the transaction(s): section to be repeated
for (i) each type of instrument; (ii) each type of
transaction; (iii) each date; and (iv) each place
where transactions have been conducted
-----------------------------------------------------------------------
a) Description of the financial Debentures
instrument type of instrument
Identification Code N/A
----------------------------------- ----------------------------------
b) Nature of the transaction Private Placement of Debentures
----------------------------------- ----------------------------------
c) Price(s) and volume Price Volume
US$1,000 875
----------------------------------- ----------------------------------
d) Aggregated information N/A single transaction
----------------------------------- ----------------------------------
e) Date of the transaction December 20, 2023
----------------------------------- ----------------------------------
f) Place of the transaction Outside of a trading venue
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END
MSCURAORORUUUUA
(END) Dow Jones Newswires
December 21, 2023 02:00 ET (07:00 GMT)
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