24th May 2016 11:19
LONDON (Alliance News) - Galantas Gold Corp Tuesday said a judicial review will be held in September which will allow a final decision to be made on whether the miner can restart operations at its mine in Ireland as the company reported a narrower loss in the first quarter.
The company reported a net loss of CAD373,345 in the first quarter of 2016 compared to the CAD414,099 loss a year earlier thanks to gains on foreign exchange and financial instruments in the period.
Cash outflow from operating activities before changes in non-cash working capital items for the quarter amounted to CAD416,547 from CAD501,088 the year before and revenue, although nominal, rose to CAD28,073 from CAD1,123.
A CAD24,775 foreign exchange gain was booked in the period compared to a loss of CAD39,400 last year and the gain on the financial liability amounted to CAD79,000 compared to a CAD8,000 gain last year.
However, most of the company's general and administrative costs rose in the quarter and amounted to a total of CAD336,111 compared to only CAD261,532. Management and other wages, leagal and audit, communication, interest payments and accretion expenses all rose in the year whilst other operating expenses and depreciation costs fell.
Cost of sales were also materially higher at CAD121,531 compared to CAD69,997 the year before.
Cash at the end of March stood at CAD568,284, rising from CAD380,764 a year earlier, but Galantas is in the process of proposing a placing of shares and shares for debt exchange which may boost that balance.
The company's Omagh mine remains suspended but Galantas secured planning consent last year to begin an underground operation at the mine. A judicial review over the company's plan will be held in September, which will pave the way for operations to restart if successful.
"The underground mine will utilise the same processing methods and will be the first underground gold mine, of any scale, in Ireland. The strategy is to establish the underground mine as soon as finance is available and look for further expansion of gold reserves on the property, which has many undrilled targets," said Galantas.
"Work continues at a low level at the mine, satisfying conditions precedent to the underground planning permit, progressing restoration and some advance works related to underground development. The processing plant has been subject to throughput checks and is operational, awaiting ore," said President and Chief Executive Roland Phelps.
Galantas shares were up 9.7% to 5.76 pence per share on Tuesday.
By Joshua Warner; [email protected]; @JoshAlliance
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