Galantas Gold Corporation (the Company) (TSX VENTURE:GAL)(AIM:GAL) is pleased to
announce a revised estimate of gold resources, economic study, planning and
environmental update on its wholly owned, Omagh Gold Mine in Northern Ireland.
RESOURCE REVIEW
The revised estimate of resources is written in compliance with the Pan European
Reporting Code (PERC), Canadian Institute of Mining, Metallurgy and Petroleum
(CIM) standards and Canadian National Instrument (NI) 43-101.
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RESOURCE ESTIMATE : GALANTAS 2014
CUT-OFF 2 g/t Au Increase
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RESOURCE TONNES GRADE Au Ozs GAL 2013
CATEGORY (Au g/t) report
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MEASURED 138,241 7.24 32,202 55%
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INDICATED 679,992 6.78 147,784 21.4%
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INFERRED 1,373,879 7.71 341,123 15.4%
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Minerals Resources that are not Mineral Reserves do not have demonstrated
economic viability.
Overall there has been a 19% increase in resources since the Galantas 2013
Resource Report (reported 12th June 2013) and a 60% increase in resources since
the 2012 Resource Report by ACA Howe International Ltd (reported 3rd July 2012).
The increases since 2012 largely relate to the Kearney and Joshua veins, since
this is where the drilling program has been concentrated. The drilling program
was mainly designed to focus on increasing the quantity of Measured and
Indicated resources on these two veins, to support potential bank funding
opportunities for the financing of production. The resource estimate for each
vein is tabulated below.
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RESOURCE ESTIMATE BY VEIN : GALANTAS 2014
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MEASURED INDICATED
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TONNES GRADE Contained Tonnes GRADE Contained
Au (g/t) Au (oz) Au (g/t) Au (oz)
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KEARNEY 76,936 7.48 18,490 383,220 6.66 82,055
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JOSHUA 54,457 7.25 12,693 216,211 7.92 55,046
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KERR 6,848 4.63 1,019 12,061 4.34 1,683
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ELKINS 68,500 4.24 9,000
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GORMLEYS
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PRINCES
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SAMMY'S
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KEARNEY NORTH
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TOTAL 138,241 7.25 32,202 679,992 6.78 147,784
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RESOURCE ESTIMATE BY VEIN : GALANTAS 2014
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INFERRED
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Tonnes GRADE Contained
Au (g/t) Au (oz)
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KEARNEY 909,277 6.61 193,330
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JOSHUA 291,204 10.74 100,588
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KERR 23,398 3.2 2,405
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ELKINS 20,000 5.84 3,800
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GORMLEYS 75,000 8.78 21,000
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PRINCES 10,000 38.11 13,000
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SAMMY'S 27,000 6.07 5,000
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KEARNEY
NORTH 18,000 3.47 2,000
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TOTAL 1,373,879 7.71 341,123
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The resources are calculated at a cut-off grade of 2 g/t gold (Au), numbers are
rounded, gold grades are capped at 75 g/t gold and a minimum mining width of
0.9m has been applied.
Measured and Indicated resources on Kearney vein have increased to 100,545
ounces of gold (2014) from 69,000 ounces (2012). Measured and Indicated
resources on Joshua vein have increased to 67,739 ounces of gold (2014) from
15,800 ounces (2012). The Kearney and Joshua veins are the early targets of
underground mining. Combined Measured and Indicated resource category on these
two veins are estimated at 168,284 ounces of gold, with 293,918 ounces of gold
in the Inferred resource category. Both vein systems are open at depth.
REGULATORY CONTEXT
The economic study includes use of Measured and Indicated resources with a
restricted portion of Inferred resources, estimated for two veins (Joshua and
Kearney veins). The Inferred resources (which have lower statistical support
than Measured or Indicated Resources) are contiguous with Measured or Indicated
resources and / or lie within scheduled mining areas. The use of Inferred
resources, in a restricted qualifying manner, is permitted by the PERC code in
regard to economic studies but is excluded within NI 43-101, except within a
"Preliminary Economic Assessment (PEA)". In compliance with the disclosure
requirements of NI 43-101, it has been determined that the economic study
including associated inferred resources is deemed a Preliminary Economic
Assessment. PERC is an approved code is respect of NI 43-101. As part of PERC
requirements, a comparative study (Feasibility) is included in the detailed
technical report which does not include Inferred resources and also includes
studies on sensitivity to gold price.
In compliance with NI 43-101 2.3.3(a) "the preliminary economic assessment is
preliminary in nature, that it includes inferred mineral resources that are
considered too speculative geologically to have economic considerations applied
to them that would enable them to be categorized as mineral reserves and there
is no certainty that the preliminary economic assessment will be realized."
RESULTS OF THE ECONOMIC STUDY
The total of scheduled Measured and Indicated ounces utilised within the mining
study is 104,627 ounces. The Inferred resources scheduled in the economic study
are estimated at 60,635 ounces. Total Inferred resource estimated on the Joshua
and Kearney orebodies is 293,918 ounces of gold. The amount of Inferred
resources included in the economic estimate amounts to 20.6% of the total
Inferred resources estimated on these veins. Were Inferred resources excluded
within the mining plan, approximately 1 year would be removed from the estimate
of mine life and annual output would be reduced.
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LOM Capital
Expenditure Year 1 Year 2 Year 3 Year 4
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Capital Excluding
Leasable
Equipment GBP 1,679,432 GBP 4,149,604 GBP 422,355 GBP 390,534
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Capital Leasable
Equipment GBP 1,273,469 GBP 1,334,177 GBP 0 GBP 0
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Contingency 15% GBP 442,935 GBP 822,567 GBP 63,353 GBP 58,580
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Working
Capital(i) GBP 1,000,000 GBP 0 GBP 0 GBP 0
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GRAND TOTAL
(UKGBP) GBP 4,395,836 GBP 6,306,349 GBP 485,708 GBP 449,115
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CDN$ TOTAL (1.83
CDN/GBP) $8,053,325 $11,553,294 $889,819 $822,756
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LOM Capital
Expenditure Year 5 Year 6 LOM
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Capital Excluding
Leasable
Equipment GBP 0 GBP 0 GBP 6,641,926
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Capital Leasable
Equipment GBP 0 GBP 0 GBP 2,607,646
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Contingency 15% GBP 0 GBP 0 GBP 1,387,436
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Working
Capital(i) GBP 0 GBP 0 GBP 1,000,000
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GRAND TOTAL
(UKGBP) GBP 0 GBP 0 GBP 11,637,007
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CDN$ TOTAL (1.83
CDN/GBP) $0 $0 $21,320,102
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LIFE OF MINE CAPITAL EXPENDITURE SUMMARY
(i)Working Capital includes payment delay for concentrate, VAT pre-payment
and 10% contingency
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Gold Price GBP
750/oz Year 1 Year 2 Year 3 Year 4
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Operating Costs GBP 5,693,338 GBP 10,430,904 GBP 11,964,071 GBP 11,261,136
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Revenue GBP 5,354,810 GBP 15,597,318 GBP 20,264,230 GBP 19,238,279
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Cash flow (UKGBP) -GBP 338,528 GBP 5,166,414 GBP 8,300,158 GBP 7,977,143
Cash flow
(1.83CDN/GBP) -$620,312 $9,467,531 $15,210,123 $14,616,519
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Gold Price GBP
750/oz Year 5 Year 6 LOM
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Operating Costs GBP 10,830,431 GBP 8,459,001 GBP 58,638,882
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Revenue GBP 19,774,130 GBP 11,741,821 GBP 91,970,588
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Cash flow (UKGBP) GBP 8,943,699 GBP 3,282,820 GBP 33,331,706
Cash flow
(1.83CDN/GBP) $16,388,344 $6,015,374 $61,074,685
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OPERATING CASH FLOW AT AN AVERAGE GOLD PRICE OF UKGBP 750 PER OUNCE
At a gold price of UKGBP 750 / ounce (USD$1260 at $1.68/UKGBP), the pre-tax
operating surplus after capital expenditure estimates an Internal Rate of Return
of 72% and, at an 8% discount rate, a net present value of approximately UKGBP
14.5m (CDN$26.6m) and a cash cost of production of UKGBP 394 per ounce (USD$662
at $1.68/UKGBP). The study scheduled approximately 36% of the combined resources
identified on the Kearney and Joshua veins.
The Technical Report (Galantas 2014) was prepared by the Galantas Gold
Corporation Geological and Mining Team under the supervision of R. Phelps C.Eng
MIMMM (President & CEO, Galantas Gold Corporation), a Qualified Person for the
purposes of NI 43-101 and the AIM Rules, who has reviewed and approved this
release. The Company intends to file the complete Technical Report on SEDAR
within 45 days of this release, as required by NI 43-101.
PLANNING UPDATE
The permitting process for the underground mine has been detailed and exhaustive
but has now reached the final stage. The Company is advised that the final
consultation response (from Natural Heritage, Northern Ireland Environment
Agency) has been received and is positive. The Company understands a timeline
within three months is possible for a final determination but the timing of such
is not in the Company's hands.
POSITIVE ENVIRONMENTAL COMPLIANCE UPDATE
The Company has received confirmation from the Northern Ireland Environment
Agency that 2013 marked another year of strict environmental compliance with
regulatory standards for out-flow water from the Omagh Gold-Mine.
COMMENT
Roland Phelps, President & CEO, Galantas Gold Corporation, commented, "Our
detailed geological, mining and economic studies demonstrate the excellent
potential of an underground mine at Omagh. With planning permits approaching the
final stage of determination, we are looking forward to building a sound
business that will provide local jobs within a safe environment. We haven't yet
found the limits of most of the veins we have discovered. Taking operations
underground allows production from a substantial gold resource that we expect
will continue to reveal itself, by underground drilling, as much larger than we
have already demonstrated. We are expecting to build the underground operations
to an initial target of around 32,000 ounces per year, based on what we already
know, increasing as additional resources are identified. Our ownership of an
existing processing plant, tailings facility and land package is a considerable
advantage in terms of minimising the capital required and we expect to make full
use of these assets."
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 resource estimates, economic estimates and technical studies,
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
geological interpretation, 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, including: gold price
volatility; discrepancies between actual and estimated production, actual and
estimated metal grades and geologically interpreted widths, actual and estimated
metallurgical recoveries; actual and estimated costs; mining operational risk;
regulatory and permitting 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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
Galantas Gold Corporation Issued and Outstanding Shares total 76,697,156.
FOR FURTHER INFORMATION PLEASE CONTACT:
Galantas Gold Corporation
L. Jack Gunter P.Eng
Chairman
+44 (0) 2882 241100
Galantas Gold Corporation
Roland Phelps C.Eng
President & CEO
+44 (0) 2882 241100
info@galantas.com
www.galantas.com
Charles Stanley Securities (AIM Nominated Adviser)
Mark Taylor
+44 (0)20 7149 6000
Galantas Gold (TSXV:GAL)
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