(MENAFN - GlobeNewsWire - Nasdaq) itemprop="articleBody">TORONTO, Dec. 05, 2018 (GLOBE NEWSWIRE) -- Galantas Gold Corporation (the 'Company' or 'Galantas'), the AIM and TSX Venture Exchange ('TSXV') quoted gold producer and explorer with a 100% interest in Northern Ireland's Omagh gold mine, wishes to clarify some of the provisions and provide an update to its previously announced proposed Private Placement of Common Shares (the 'Private Placement') and Shares for Debt transaction (the 'Shares for Debt Arrangement' or 'Arrangement') on November 19, 2018 and November 30, 2018.
The Private Placement will include funds raised in both UK and Canadian currency and is for a maximum of 80,000,000 shares, at an issue price of UK£0.05 (CAD$0.08625) per share, for gross proceeds of UK£4,000,000 (CAD$6,900,000). A four month plus one day hold period will apply to the shares and the shares will rank pari passu with the existing shares in issue of the Company. Insiders are expected to participate in the placing.
The net proceeds to be raised by the Private Placement are intended to be used for working capital purposes and to achieve full production status. Galantas has set a production target of 30,000 ounces of gold in concentrate per year (see note 1). The Company expects the Private Placement to complete the equity element of funding required to achieve the target.
The Company has received a subscription agreement from Melquart Ltd. ('Melquart'), who currently holds 40,224,545 common shares (representing 19.2% of the Company's total issued and outstanding common shares) to subscribe for an additional 22,000,000 common shares (a total of £1,100,000). On completion of the Private Placement and no Shares for Debt Arrangement, the subscription from Melquart will equate to a holding of 62,224,545 common shares or approximately 21% of the Company's total issued and outstanding common shares. With the completion of the Shares for Debt Arrangement, Melquart's holding will equate to approximately 20.76% of the issued and outstanding common shares.
Under Canadian securities law, Melquart would automatically be considered a 'control person' if they owned 20% or more of the common shares of the Company. Canadian regulations require that consent of a majority of disinterested shareholders be obtained for the creation of new control persons. The Company expects to achieve this via a written resolution.
Under the Shares for Debt Arrangement, Mr. Roland Phelps, President & CEO, Galantas Gold Corporation, intends to, subject to approvals, exchange 10,000,000 common shares for debt owed to him for past management fees, in the amount of £500,000 (CAD $862,500) at £0.05 (CAD $0.08625) per share. Mr. Phelps, by virtue of his executive role in the Company, is deemed a 'control person' under Canadian regulations. The consent of a majority of disinterested shareholders is required by the regulations to enact such an Arrangement. The Company will be seeking that by means of a written resolution.
The Private Placement and the Shares for Debt Arrangement, is still subject to TSXV and regulatory approval. A further announcement will be made in due course detailing the results of the Private Placement and Shares for Debt Arrangement.
The Company has received, through an advisor, expressions of interest in the Company's Omagh properties and operations. The Company will advise shareholders if matters of substance arise that may lead to corporate action.
The underground gold mine at Omagh has commenced limited production of gold concentrate, from feed produced in development of the Kearney vein and Galantas announced the first delivery of gold and silver concentrate on November 5, 2018. The processing plant uses a non-toxic flotation process to produce concentrates, without the use of cyanide or mercury. It satisfies strict environmental monitoring criteria set by the Northern Ireland regulatory authorities and has a zero lost time accident record since the start of underground development.
Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
Galantas Gold Corporation's Issued and Outstanding Shares total 209,686,805.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
Note 1: For further details see Galantas NI 43-101 / PERC Technical Report, July 2014 on Enquiries: Galantas Gold Corporation
L. Jack Gunter P.Eng – Chairman, Roland Phelps C.Eng – President & CEO
Email: / Telephone: (UK) +44 (0) 28 8224 1100
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett, Harrison Clarke, Richard Tonthat: Telephone: +44 (0) 20 7383 5100
Whitman Howard Ltd (Broker & Corporate Adviser)
Nick Lovering, Grant Barker: Telephone: +44 (0) 20 7659 1234