Galantas Gold Corporation has announced a proposed private placement of common shares and an increase to its loan facility for Cavanacaw gold mine near Omagh, Northern Ireland.
The loan facility is with Ocean Partners UK and the Canadian miner intends to use the net proceeds of the placement to support mine operations and capital.
The news comes as company losses and less cash were revealed in its results for year ending 31 December 2019 to 12 June 2020
Net loss for the year ended 31 December 2019 amounted to $3,564,609 (2018: $2,885,437) and the cash outflow from operating activities before changes in non-cash working capital for the same period amounted to $1,826,066 (2018: $1,848,019).
The company had a cash balance of $1,913,420 at 31 December 2019 compared with $6,188,554 at 31 December 2018.
The working capital deficit at 31 December 2018 amounted to $6,093,200 compared with a working capital deficit of $272,783.
PRIVATE PLACEMENT
The private placement will be brokered and insiders of the company are expected to participate in the private placement.
A company statement read: “The private placement is expected to include funds raised in both UK and Canadian currency and is for a maximum of 2,636,355 shares, at an issue price of CA$0.225 (£0.1328) per share for maximum gross proceeds of CA$593,180 (£350,000).
“Provisional indications have been received for CA$457,469 (270,000).
“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.”
Galantas agreed with Ocean Partners UK a loan facility increase by US$200,000 to a total of US$1.8 million.
Galantas’ mining operations cover 435 sq km and produce limited gold concentrate from processing low grade stock by using a non-toxic flotation process to produce concentrates, without the use of cyanide or mercury.
The company resumed concentrate processing at the plant on 28 May.
Miners in Northern Ireland have faced opposition from local protesters of CAMIO (Co-operate Against Mining In Omagh) who are against mining in the nearby Sperrin Mountains and the whole of Ireland.