Galantas Gold Corporation PROPOSED PLACEMENT AND INCREASE TO LOAN FACILITY (2683R)
June 26 2020 - 9:35AM
UK Regulatory
TIDMGAL
RNS Number : 2683R
Galantas Gold Corporation
26 June 2020
GALANTAS GOLD CORPORATION
TSXV - "GAL" - AIM
GALANTAS ANNOUNCES PROPOSED PRIVATE PLACEMENT AND INCREASE TO
LOAN FACILITY
June 26 ,2020. Galantas Gold Corporation (the "Company" or
"Galantas"), the AIM and TSX Venture Exchange ("TSXV") quoted gold
mine developer and explorer with a 100% interest in Northern
Ireland's Omagh gold mine, announces a proposed private placement
of common shares (the "Private Placement") and amendments to the
terms of its loan facility with Ocean Partners UK Ltd. ("Ocean
Loan").The net proceeds to be raised by the Private Placement are
intended to be used to support mine operations and provide general
working capital for the Company.
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 CAD$0.225 (UKGBP0.1328) per share for
maximum gross proceeds of CAD$ 593,180 (UKGBP350,000). Provisional
indications have been received for CAD$ 457,469 (UKGBP270,000). 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. The Private Placement will be brokered and insiders
of the Company are expected to participate in the Private
Placement.
A further announcement will be made in due course detailing the
results of the Private Placement, which is subject to TSXV and
regulatory approval. Galantas has also agreed on terms, subject to
final documentation, of an increase in the outstanding Ocean Loan
with Ocean Partners UK Ltd. ("Ocean"). The amount of the Ocean Loan
will increase by USD$200,000 to a total of USD$1.8 million. The
interest rate applicable on the Ocean Loan will be increased from
USD 12 month LIBOR + 8.75% to USD 12 month LIBOR + 9.9% and the
maturity date will be extended from 30 December 2020 to 31 December
2021. Interest may be rolled into the Ocean Loan until 31 December
2020, at the Company's option. The existing second charge debenture
over mine assets will remain in place. Galantas entered into the
Ocean Loan through a concentrate pre-payment agreement/ loan
agreement signed by its subsidiary Flintridge Resources Ltd. and
Ocean on April 11, 2018.
As consideration for amending the terms of the Ocean Loan, Ocean
will receive, upon closing of the Ocean Loan agreements, 1,700,000
bonus warrants of Galantas ("Bonus Warrants") subject to the rules
of TSXV Policy 5.1 - Loans, Loan Bonuses, Finder's Fees and
Commissions. Each Bonus Warrant will be exercisable for one common
share of Galantas (a "Bonus Share") at an exercise price of
CDN$0.33 per Bonus Share, being 110% of the TSXV closing price the
day before this announcement. The Bonus Warrants will expire on 31
December 2021 (the "Expiry Time") and the Bonus Shares will be
subject to an initial four month plus one day hold period from the
date of their issuance. In the event that the weighted average
closing price per common share of the Company is more than
CDN$0.4125 per share for more than five consecutive trading days,
the Company shall be entitled to accelerate the Expiry Time to a
date that is 30 days from the date on which the Company announces
the accelerated Expiry Time by press release. The Bonus Warrants
are subject to TSXV and regulatory approval.
Following the completion of the Private Placement and the Ocean
Loan, G&F Phelps Ltd. ("G&F Phelps") will enter into an
arrangement in respect of its loans with the Company (and its
subsidiaries) (the "G&F Phelps Loans") which will provide that
G&F Phelps will not call for repayment of the G&F Phelps
Loans (which are repayable on demand), until 30 June 2021 at the
earliest, unless certain events occur including inter alia a sale
or insolvency of the Company (or its subsidiaries), a material
liquidity event, change of control or breach of the terms of the
G&F Phelps Loans. G&F Phelps is a company owned by Roland
Phelps, President & CEO of Galantas.
The gold mine at Omagh continues to deliver limited production
of gold concentrate, from the processing of low grade stock. 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.
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.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Enquiries: Galantas Gold Corporation Roland Phelps C.Eng -
President & CEO
Email: info@galantas.com Telephone: (UK) +44 (0) 2882 241100
Website: www.galantas.com
Grant Thornton UK LLP (AIM Nominated Adviser) Philip Secrett,
Harrison Clarke, Richard Tonthat : Telephone: +44(0)20 7383
5100
Whitman Howard Ltd (Broker & Corporate Adviser)
Nick Lovering : Telephone: +44(0)20 7659 1234
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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