Galantas Gold announces proposed private placement and credit facility increase
TORONTO, June 26, 2020 (GLOBE NEWSWIRE) – Galantas Gold Corporation (the “Company” or “Galantas”) (TSXV & ZIEL: Symbol GAL), the AIM and TSX Venture Exchange (“TSXV”) listed gold mine developer and explorer with a 100 percent interest in the Omagh Gold Mine of Northern Ireland, is announcing a proposed private placement of common shares (the “Private Placement”) and changes to the terms of its loan facility with Ocean Partners UK Ltd. (“Ocean Loan”). The net proceeds to be generated by the private placement are intended to be used to support the mine operations and to provide general working capital for the company.
The private placement is expected to include funds in UK and Canadian currencies and is for a maximum of 2,636,355 shares at an issue price of CAD 0.225 (UK £ 0.1328) per share for maximum gross proceeds of CAD 593,180 (UK £ 350,000). . Preliminary indications have been received for CAD 457,469 (£ 270,000). A holding period of four months plus one day applies to the shares and the shares rank pari passu with the company’s existing shares. The private placement is 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 the approval of the TSXV and regulatory authorities. Galantas has also worked with Ocean Partners UK Ltd. (“Ocean”) agreed to the terms of an increase in the outstanding Ocean Loan subject to final documentation. The amount of the Ocean Loan will increase by $ 200,000 to a total of $ 1.8 million. The interest rate applicable to the Ocean Loan will be increased from USD 12-month LIBOR + 8.75% to USD 12-month LIBOR + 9.9% and the term will be extended from December 30, 2020 to December 31, 2021. Interest can be rolled into the ocean loan through December 31, 2020 at the option of the company. The existing secondary bond on mining facilities will remain in place. Galantas entered into the Ocean Loan through a Concentrate Prepayment Agreement / Loan Agreement signed on April 11, 2018 by its subsidiary Flintridge Resources Ltd. and Ocean was signed.
In return for the change in the terms of the Ocean Loan, Ocean will receive 1,700,000 Bonus Warrants from Galantas (“Bonus Warrants”) under the rules of TSXV Policy 5.1 – Loans, Loan Bonuses, Finder Fees and Commissions, upon entering into the Ocean Loan Agreements . Each Bonus Warrant is exercisable for one share of Galantas common stock (a “Bonus Share”) at an exercise price of $ 0.33 per Bonus Share, which is 110% of the closing TSXV price on the day prior to this announcement. The Bonus Warrants will expire on December 31, 2021 (the “Expiry Period”) and the Bonus Shares will be subject to an initial hold of four months plus one day from the date of issue. In the event that the weighted average closing price per common share of the company is more than $ 0.4125 per share for more than five consecutive trading days, the company is entitled to reduce the expiry time to a date that is 30 days from the date to which the company announces the accelerated expiry time via press release. The Bonus Warrants are subject to the TSXV and regulatory approval.
Upon completion of the private placement and ocean loan, G&F Phelps Ltd. (“G&F Phelps”) enter into an agreement with the Company (and its subsidiaries) in relation to its loans (the “G&F Phelps Loans”) that G&F Phelps may not repay the on-demand G&F Phelps loans before 30th among other things a sale or bankruptcy of the company (or its subsidiaries), a material liquidity event, a change of control or a breach of the terms of the G&F Phelps loans. G&F Phelps is a company owned by Roland Phelps, President and CEO of Galantas.
The Omagh gold mine continues to provide limited production of gold concentrate from the processing of low grade stocks. The processing plant uses a non-toxic flotation process to produce concentrates without the use of cyanide or mercury. It meets the strict environmental monitoring criteria of the Northern Irish regulators.
Neither the 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 news release.
This notification contains inside information within the meaning of Article 7 of Regulation (EU) No. 596/2014.
Inquiries: Galantas Gold Corporation Roland Phelps C.Eng – President & CEO
Grant Thornton UK LLP (AIM nominated advisor) Philip Secrett, Harrison Clarke, Richard Tonthat: Phone: +44 (0) 20 7383 5100
Whitman Howard Ltd (Broker & Business Advisor)
Nick Lovering: Phone: +44 (0) 20 7659 1234