TIDMGAL
RNS Number : 9521V
Galantas Gold Corporation
20 April 2021
GALANTAS GOLD CORPORATION
TSXV - "GAL" - AIM
GALANTAS ANNOUNCES A PROPOSED PRIVATE PLACEMENT TO ADVANCE PLANS
FOR PRODUCTION AND EXPLORATION EXPANSION
April 20, 2021 . Galantas Gold Corporation ("Galantas" or the
"Company") is pleased to announce a proposed Private Placement that
will provide for the financing to bring the Galantas Gold Mine in
Omagh, Northern Ireland, into full production. Highlights of the
Private Placement are summarized below.
The Private Placement consists of a minimum of 17 to 22 million
"Units" at C$0.30 per Unit (the "Offering Price"), where each Unit
comprises one common share and one warrant. The minimum gross
proceeds expected to be raised are C$5,100,000, with maximum gross
proceeds of C$6,600,000. Each warrant will be exercisable into one
additional share at an exercise price of C$0.40 for 24 months from
the closing date of the placement. There will be a 4-month hold
period on the trading of securities issued in connection with this
offering.
The net funds raised will be mainly used for bringing the
Galantas Gold Mine into full commercial production and for
exploration to expand the high-grade gold resources.
Melquart Ltd ("Melquart"), the Company's largest shareholder, is
expected to subscribe for 2,000,000 Units for gross proceeds of
C$600,000, and Roland Phelps is expected to subscribe for Units for
the equivalent of GBPGBP250,000 (approximately C$435,000).
Under the terms of the Private Placement, detailed within a
non-binding Letter of Intent and completion of its conditions,
Ocean Partners UK Ltd ("Ocean Partners") will subscribe for a
minimum of 1,666,667 Units of the Private Placement, for a
subscription of C$500,000, and to purchase any additional Units up
to a maximum of C$4,500,000 required to reach the minimum gross
proceeds from the Private Placement of C$5,100,000, including
Melquart's subscription.
In regard to the commitment provided by Ocean Partners, it is
expected Ocean will receive fees of C$112,500 as a commitment fee
equivalent to 2.5% of C$4,500,000, and 2.5% of the gross proceeds
for the Units to which it actually subscribes, in lieu of any
finder's fees that would have had to be otherwise paid; both of
which will be paid by the issuance of Units at the Offering Price.
The Company will bear 75% of certain legal costs incurred by Ocean
Partners' legal counsel in the preparation of suitable
documentation.
Other than Units sold to Ocean Partners, the Company may pay
finder's fees up to 6.5% to other finders in cash or in Units.
On closing of the proposed Private Placing ("the Closing Date"),
Roland Phelps will retire as Galantas' Chief Executive Officer and
as a member of the Board of Directors. His role as CEO will be
assumed by Mario Stifano, an experienced mining executive who has
raised over $700 million in capital for mining companies such as
Lake Shore Gold Corp. (now part of Kirkland Lake Gold Inc.),
Cordoba Minerals Corp. and Dore Copper Mine Corp. It is expected
that Mr Stifano will be nominated as an Ocean Partners
representative on the Board following regulatory approval but it is
expected to act as an observer following the Closing Date.
On the Closing Date, the Board of Galantas will appoint an Ocean
Partners nominee, Brent Omland, as a Director, to replace Mr.
Phelps on the Board, following regulatory approval. Mr. Omland is a
Canadian Chartered Accountant with 15 years' experience in the
mining, metals and trading sectors. He has held roles with Ivernia
Inc., Enirgi Metals Group and Teck. He is currently Chief Financial
Officer of Ocean Partners.
Mario Stifano commented: "I am excited by the opportunity to
lead Galantas forward. The current operation, brought to full
production, provides an exciting opportunity in a highly
prospective gold district. In line with the new capital and plans
to move to full production, following the Closing Date, I plan to
introduce a bolstered and experienced operating team. The Company
will also follow up on the significant exploration potential of
numerous veins including the Joshua vein that intersected 21.6
meters of 9.9 grams per tonne gold on the major structure that
hosts the world-class Dalradian Gold project, as well as New Found
Gold's recent Queensway discovery.
"We thank Mr. Phelps for his years of invaluable service to
develop this opportunity into what it is today. With the support of
Ocean Partners as a critical long-term offtaker and partner, we
believe we can unlock significant value for all stakeholders and
shareholders."
Roland Phelps commented: "I am pleased to see Galantas receive
the funding it needs to unlock its true potential. Ocean Partners
has been a supportive partner to the Company and I look forward to
the exciting progress that this new capital and leadership team can
provide."
It is expected that Mr. Phelps will enter into a formal
Consultation Agreement with the Company for one year for ongoing
Board and management support.
Offtake Agreement
The existing Offtake Agreement with Ocean Partners is expected
to be extended from a minimum total of 50,000 tonnes of concentrate
deliveries to a minimum total of 150,000 tonnes and marketed at
market rates.
Debt Matters
On the Closing Date, the maturity date of the Ocean Partners
loan due on December 31, 2021 will be extended to December 31,
2023. Interest may be deferred and added to the balance outstanding
until March 31, 2022, at which point interest will be paid monthly.
The 1,700,000 Ocean Partners warrants currently issued will be
extended by 24 months to December 31, 2023.
On the Closing Date, the maturity date of the G&F Phelps Ltd
loan due on June 30, 2021 will be extended to December 31, 2023.
Interest may be deferred and added to the balance outstanding until
March 31, 2022, at which point interest will be paid monthly. In
consideration for extending the loan and deferring interest,
G&F Phelps Ltd will receive 1,700,000 warrants exercisable into
one common share at an exercise price of C$0.33, with said warrants
expiring on December 31, 2023. G&F Phelps Ltd is a company
controlled by Mr. Phelps.
Pursuant to an Intercreditor Agreement between Flintridge
Resources Ltd, Ocean Partners and G&F Phelps Ltd, principal
repayments will be repaid on a pari passu basis proportionately to
the size of the loans.
The transactions contemplated by the Private Placement are
subject to approval by the Galantas Board of Directors, Ocean
Partners Board of Directors, G&F Phelps Ltd Board of Directors,
and the TSX Venture Exchange, and may be subject to additional
regulatory approvals.
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.
Information communicated within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
Enquiries
Galantas Gold Corporation Roland Phelps CEng - President &
CEO
Email: info@galantas.com Website: www.galantas.com Telephone: +44 (0) 2882 241100
Grant Thornton UK LLP (AIM Nomad)
Philip Secrett, Harrison Clarke
Telephone: +44(0)20 7383 5100
Panmure Gordon & Co (AIM Broker & Corporate Adviser)
Nick Lovering, Hugh Rich
Telephone: +44(0)20 7886 2500
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