RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2023

Galantas Gold Corporation

29 November 2023

 

29 November 2023

GALANTAS GOLD CORPORATION

TSXV & AIM: Symbol GAL

GALANTAS REPORTS FINANCIAL RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2023

November 29, 2023:  Galantas Gold Corporation (the 'Company') is pleased to announce its unaudited financial results for the Quarter Ended September 30, 2023.

Financial Highlights

Highlights of the third quarter 2023 results, which are expressed in Canadian Dollars, are summarized below:

All figures denominated in Canadian Dollars (CDN$)	Quarter Ended September 30       2023                     2022		Nine Months Ended September 30       2023                         2022
Revenue	$      0	$        0	$       0	$           0
Cost and expenses of operations	$        (24,728)	$      (86,442)	$    (147,824)	$   (200,076)
Loss before the undernoted	$        (24,728)	$      (86,442)	$     (147,824)	$   (200,076)
Depreciation	$      (135,597)	$      (196,178)	$    (390,691)	$   (475,045)
General administrative expenses	$   (858,600)	$    (1,179,927)	$    (3,289,260)	$ (3,764,038)
Foreign exchange (loss) / gain	$      (294,430)	$       (96,277)	$      (234,710)	$    (112,645)
Net Loss for the period	$  (1,313,355)	$    (1,555,824)	$  (4,062,485)	$ (4,551,804)
Working Capital (Deficit)	$ (14,010,771)	$      (714,865)	$ (14,010,771)	$ (714,865)
Cash (loss) / profit from operating activities before changes in non-cash working capital	$ (1,088,096)	$         (324,827)	$  (1,088,096)	$ (3,003,660)
Cash at September 30, 2023	$      609,047	$     3,567,196	$ 609,047	$ 3,567,196

Sales revenue for the quarter ended September 30, 2023 amounted to $ Nil compared to revenue of $ Nil for the quarter ended September 30, 2023. Shipments of concentrate commenced during the third quarter of 2019. Concentrate sales provisional revenues totalled US$ 333,000 (CAD$ 450,000) and US$ 849,000 (CAD$ 1,148,000) during the three and nine months ended September 30 2023 compared to US $ 183,000 and US$ 329,000 for the three and nine months ended September 30, 2022. Until the mine commences commercial production, the net proceeds from concentrate sales are being offset against development assets.

The Net Loss for the quarter ended September 30, 2023 amounted to $ 1,313,355 (2022: $1,555,824) and the cash outflow from operating activities before changes in non-cash working capital for the quarter ended September 30, 2023 amounted to $ 1,088,096 (2022: $ 324,827).  The main difference in the reduction in net loss is due to a reduction in the value attributed to stock based compensation, an increase in financing activities from 2022 and a foreign exchange loss as a result of movement in the CAD$:Stg£ exchange rate.

The Company had a cash balance of $ 609,047 at September 30, 2023 compared to $ 3,567,196 at September 30, 2022. The working capital deficit at September 30, 2023 amounted to $ 14,010,771 compared to a working capital deficit of $ 714,865 at September 30, 2022. 

The detailed results and Management Discussion and Analysis (MD&A) are available on www.sedar.com and www.galantas.com and the highlights in this release should be read in conjunction with the detailed results and MD&A. The MD&A provides an analysis of comparisons with previous periods, trends affecting the business and risk factors.

Click on, or paste the following link into your web browser, to view the associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/9728U_1-2023-11-28.pdf

Qualified Person

The financial components of this disclosure has been reviewed by Alan Buckley (Chief Financial Officer) and the production and permitting components by Brendan Morris (COO), qualified persons under the meaning of NI. 43-101. The information is based upon local production and financial data prepared under their supervision.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including revenues and cost estimates, for the Omagh Gold project. Forward-looking statements are based on estimates and assumptions made by Galantas in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Galantas believes are appropriate in the circumstances. Many factors could cause Galantas' actual results,  the performance or achievements to differ materially from those expressed or implied by the forward looking statements or strategy, including: gold price volatility; discrepancies between actual and estimated production,  actual and estimated  metallurgical recoveries and throughputs; mining operational risk, geological uncertainties; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign involvement; speculative nature of gold exploration; dilution; competition; loss of or availability of key employees; additional funding requirements; uncertainties regarding planning and other permitting issues; and defective title to mineral claims or property. These factors and others that could affect Galantas's forward-looking statements are discussed in greater detail in the section entitled "Risk Factors" in Galantas' Management Discussion & Analysis of the financial statements of Galantas and elsewhere in documents filed from time to time with the Canadian provincial securities regulators and other regulatory authorities. These factors should be considered carefully, and persons reviewing this press release should not place undue reliance on forward-looking statements. Galantas has no intention and undertakes no obligation to update or revise any forward-looking statements in this press release, except as required by law.

Enquiries

Galantas Gold Corporation
Mario Stifano - CEO
Email: [e-mail]
Website: www.galantas.com
Telephone: [phone]

Grant Thornton UK LLP (Nomad)                  

Philip Secrett, Harrison Clarke, Enzo Aliaj                                               

Telephone: [phone]   

SP Angel Corporate Finance LLP (AIM Broker)

David Hignell, Charlie Bouverat (Corporate Finance)

Grant Barker (Sales and Broking)

Telephone: [phone]

GALANTAS GOLD CORPORATION

Condensed Interim Consolidated Financial Statements

(Expressed in Canadian Dollars)

(Unaudited)

Three and Nine Months Ended September 30, 2023

NOTICE TO READER

The accompanying unaudited condensed interim consolidated financial statements of Galantas Gold Corporation (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors.

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Galantas Gold Corporation

Condensed Interim Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)

(Unaudited)

		As at			As at
		September 30,			December 31,
		2023			2022
ASSETS
Current assets
Cash and cash equivalents	$	609,047		$	1,038,643
Accounts receivable and prepaid expenses (note 4)		1,375,524			1,810,993
Inventories (note 5)		14,859			83,242
Total current assets		1,999,430			2,932,878
Non-current assets
Property, plant and equipment (note 6)		26,454,660			24,255,849
Long-term deposit (note 8)		495,300			489,660
Exploration and evaluation assets (note 7)		4,777,844			2,665,313
Total non-current assets		31,727,804			27,410,822
Total assets	$	33,727,234		$	30,343,700
EQUITY AND LIABILITIES
Current liabilities	$
Accounts payable and other liabilities (notes 9 and 16)		4,614,630		$	4,052,041
Current portion of financing facilities (note 10)		5,684,764			4,836,267
Due to related parties (note 14)		5,710,807			5,072,534
Total current liabilities		16,010,201			13,960,842
Non-current liabilities
Non-current portion of financing facilities (note 10)		605,020			-
Decommissioning liability (note 8)		596,970			582,441
Other liability (note 14)		1,020,712			1,085,426
Total non-current liabilities		2,222,702			1,667,867
Total liabilities		18,232,903			15,628,709
Equity
Share capital (note 11(a)(b))		71,982,149			69,664,056
Reserves		18,038,837			15,515,105
Deficit		(74,526,655	)		(70,464,170	)
Total equity		15,494,331			14,714,991
Total equity and liabilities	$	33,727,234		$	30,343,700

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Going concern (note 1)

Incorporation and nature of operations (note 2)

Contingency (note 16)

Event after the reporting period (note 17)

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Galantas Gold Corporation

Condensed Interim Consolidated Statements of Loss
(Expressed in Canadian Dollars)

(Unaudited)

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2023			2022			2023			2022
Revenues
Sales of concentrate (note 13)	$	-		$	-		$	-		$	-
Cost and expenses of operations
Cost of sales		24,728			86,442			147,824			200,076
Depreciation (note 6)		135,597			196,178			390,691			475,045
		160,325			282,620			538,515			675,121
Loss before general administrative and
other expenses		(160,325	)		(282,620	)		(538,515	)		(675,121	)
General administrative expenses
Management and administration wages (note 14)		136,117			220,289			421,076			486,034
Other operating expenses		60,368			66,676			210,572			258,634
Accounting and corporate		26,658			33,705			245,054			223,166
Legal and audit		51,117			70,190			140,561			199,918
Stock-based compensation (note 11(d))		29,277			236,623			329,658			1,232,600
Shareholder communication and investor relations		63,126			128,889			444,808			399,410
Transfer agent		10,614			17,394			61,670			39,127
Director fees (note 14)		35,000			35,000			105,000			105,000
General office		7,724			13,468			74,203			49,543
Accretion expenses (notes 8, 10 and 14)		94,043			138,144			299,790			351,965
Loan interest and bank charges less deposit
interest (notes 10 and 14)		344,556			219,549			956,868			418,641
		858,600			1,179,927			3,289,260			3,764,038
Other expenses
Foreign exchange loss		294,430			93,277			234,710			112,645
		294,430			93,277			234,710			112,645
Net loss for the period	$	(1,313,355	)	$	(1,555,824	)	$	(4,062,485	)	$	(4,551,804	)
Basic and diluted net loss per share (note 12)	$	(0.01	)	$	(0.02	)	$	(0.04	)	$	(0.05	)
Weighted average number of common shares
outstanding - basic and diluted	114,841,403				92,115,467		110,976,336				84,788,729

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

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Galantas Gold Corporation

Condensed Interim Consolidated Statements of Comprehensive Loss
(Expressed in Canadian Dollars)

(Unaudited)

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2023			2022			2023			2022
Net loss for the period	$	(1,313,355	)	$	(1,555,824	)	$	(4,062,485	)	$	(4,551,804	)
Other comprehensive (loss) income
Items that will be reclassified subsequently
to profit or loss
Exchange differences on translating foreign
operations		(154,630	)		(1,101,693	)		471,287			(3,191,409	)
Total comprehensive loss	$	(1,467,985	)	$	(2,657,517	)	$	(3,591,198	)	$	(7,743,213	)

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

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Galantas Gold Corporation

Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)

(Unaudited)

		Nine Months Ended
		September 30,
		2023			2022
Operating activities
Net loss for the period	$	(4,062,485	)	$	(4,551,804	)
Adjustment for:
Depreciation (note 6)		390,691			475,045
Stock-based compensation (note 11(d))		329,658			1,232,600
Accrued interest (notes 10 and 14)		1,209,383			704,919
Foreign exchange loss (gain)		744,867			(1,139,442	)
Accretion expenses (notes 8, 10 and 14)		299,790			275,022
Non-cash working capital items:
Accounts receivable and prepaid expenses		439,346			346,959
Inventories		68,552			71,611
Accounts payable and other liabilities		1,171,840			1,068,811
Due to related parties		-			246,714
Net cash and cash equivalents provided by (used in) operating activities		591,642			(1,269,565	)
Investing activities
Net purchase of property, plant and equipment		(2,301,514	)		(7,065,758	)
Exploration and evaluation assets		(2,074,404	)		(893,830	)
Lease payments		-			(668,534	)
Net cash and cash equivalents used in investing activities		(4,375,918	)		(8,628,122	)
Financing activities
Proceeds of private placements (note 11(b)(i)(ii))		2,963,142			5,900,003
Share issue costs		(204,993	)		(601,932	)
Proceeds from exercise of warrants		31,200			5,074,467
Advances from related parties		-			2,044,133
Repayments to related parties		(21,552	)		-
Proceeds from financing facilities (note 10)		580,392			-
Net cash and cash equivalents provided by financing activities		3,348,189			12,416,671
Net change in cash and cash equivalents		(436,087	)		2,518,984
Effect of exchange rate changes on cash held in foreign currencies		6,491			(21,539	)
Cash and cash equivalents, beginning of period		1,038,643			1,069,751
Cash and cash equivalents, end of period	$	609,047		$	3,567,196
Cash	$	609,047		$	3,567,196
Cash equivalents		-			-
Cash and cash equivalents	$	609,047		$	3,567,196

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

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Galantas Gold Corporation

Condensed Interim Consolidated Statements of Changes in Equity
(Expressed in Canadian Dollars)

(Unaudited)

					Reserves
								Equity settled			Foreign
								share-based			currency
		Share			Warrants			payments			translation
		capital			reserve			reserve			reserve			Deficit			Total
Balance, December 31, 2021	$	57,783,570		$	4,130,200		$	10,417,260		$	887,909		$	(53,830,231	)	$	19,388,708
Shares issued in private placement (note 11(b)(i))		5,900,003			-			-			-			-			5,900,003
Shares issued for services arrangement (note 11(b)(i))		1,000,000			-			-			-			-			1,000,000
Warrants issued (note 11(b)(i))		(2,320,000	)		2,320,000			-			-			-			-
Warrants issued (note 14(a)(iii))		-			74,000			-			-			-			74,000
Share issue costs (note 11(b)(i))		(813,932	)		212,000			-			-			-			(601,932	)
Stock-based compensation (note 11(d))		-			-			1,232,600			-			-			1,232,600
Exercise of warrants		7,100,006			(2,025,539	)		-			-			-			5,074,467
Exchange differences on translating foreign operations		-			-			-			(3,191,409		)	-			(3,191,409	)
Net loss for the period		-			-			-			-			(4,551,804	)		(4,551,804	)
Balance, September 30, 2022	$	68,649,647		$	4,710,661		$	11,649,860		$	(2,303,500		)	$ (58,382,035)		$	24,324,633
Balance, December 31, 2022	$	69,664,056		$	3,903,004		$	11,887,678		$	(275,577		)	$ (70,464,170)		$	14,714,991
Shares issued in private placement (note 11(b)(ii))		2,963,142			-			-			-			-			2,963,142
Shares issue for services arrangement (note 11(b)(iii))		420,000			-			-			-			-			420,000
Shares issue for debt settlement (note 11(b)(iv))		749,020			-			-			-			-			749,020
Warrants issued (note 11(b)(ii)(iv))		(1,609,634	)		1,609,634			-			-			-			-
Warrants issued (notes 10(i) and 14(a)(iv))		-			82,511			-			-			-			82,511
Share issue costs (note 11(b)(ii))		(245,168	)		40,175			-			-			-			(204,993	)
Stock-based compensation (note 11(d))		-			-			329,658			-			-			329,658
Exercise of warrants		40,733			(9,533	)		-			-			-			31,200
Warrants expired		-			(1,829,245	)		1,829,245			-			-			-
Exchange differences on translating foreign operations		-			-			-			471,287			-			471,287
Net loss for the period		-			-			-			-			(4,062,485	)		(4,062,485	)
Balance, September 30, 2023	$	71,982,149		$	3,796,546		$	14,046,581		$	195,710		$	(74,526,655	)	$	15,494,331

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

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Galantas Gold Corporation

Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2023
(Expressed in Canadian Dollars)

(Unaudited)

1. Going Concern

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which contemplates that Galantas Gold Corporation (the "Company") will be able to realize assets and discharge liabilities in the normal course of business. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of uncertainties related to events or conditions that may cast doubt on the Company's ability to continue as a going concern. The Company's future viability depends on the consolidated results of the Company's wholly-owned subsidiary Cavanacaw Corporation ("Cavanacaw"). Cavanacaw has a 100% shareholding in both Flintridge Resources Limited ("Flintridge") who are engaged in the acquisition, exploration and development of gold properties, mainly in Omagh, Northern Ireland and Omagh Minerals Limited ("Omagh") who are engaged in the exploration of gold properties, mainly in the Republic of Ireland. The Omagh mine has an open pit mine, which was in production until 2013 when production was suspended and is reported as property, plant and equipment and as an underground mine which having established technical feasibility and commercial viability in December 2018 has resulted in associated exploration and evaluation assets being reclassified as an intangible development asset and reported as property, plant and equipment.

The going concern assumption is dependent upon forecast cash flows being met and further financing currently being negotiated. The management's assumptions in relation to future levels of production, gold prices and mine operating and capital costs are crucial to forecast cash flows being achieved. Should production be significantly delayed, revenues fall short of expectations or operating costs and capital costs increase significantly, there may be insufficient cash flows to sustain day to day operations without seeking further finance.

Negotiations with current finance providers to extend short-term loans have commenced, are progressing positively and the maturity dates for both the G&F Phelps Ltd. ("G&F Phelps") and Ocean Partners UK Ltd. ("Ocean Partners") loans are expected to be extended beyond March 31, 2023 (see notes 10 and 14).

During the year ended December 31, 2022, the Company raised gross proceeds of $11M through the issuance of shares to investors and the exercise of warrants to meet the financial requirements of the Company for the foreseeable future. During the nine months ended September 30, 2023, the Company raised gross proceeds of $3M through the issuance of shares to investors. Based on the financial projections prepared, the directors believe it's appropriate to prepare the unaudited condensed interim consolidated financial statements on the going concern basis.

As at September 30, 2023, the Company had a deficit of $74,526,655 (December 31, 2022 - $70,464,170). Comprehensive loss for the nine months ended September 30, 2023 was $3,591,198 (nine months ended September 30, 2022 - $7,743,213). These conditions raise material uncertainties which may cast significant doubt as to whether the Company will be able to continue as a going concern. However, management believes that it will continue as a going concern. However, this is subject to a number of factors including market conditions. These unaudited condensed interim consolidated financial statements do not reflect adjustments to the carrying values of assets and liabilities, the reported expenses and financial position classifications used that would be necessary if the going concern assumption was not appropriate. These adjustments could be material.

2. Incorporation and Nature of Operations

The Company was formed on September 20, 1996 under the name Montemor Resources Inc. on the amalgamation of 1169479 Ontario Inc. and Consolidated Deer Creek Resources Limited. The name was changed to European Gold Resources Inc. by articles of amendment dated July 25, 1997. On May 5, 2004, the Company changed its name from European Gold Resources Inc. to Galantas Gold Corporation. The Company was incorporated to explore for and develop mineral resource properties, principally in Europe. In 1997, it purchased all of the shares of Omagh which owns a mineral property in Northern Ireland, including a delineated gold deposit. Omagh obtained full planning and environmental consents necessary to bring its property into production.

The Company entered into an agreement on April 17, 2000, approved by shareholders on June 26, 2000, whereby Cavanacaw, a private Ontario corporation, acquired Omagh. Cavanacaw has established an open pit mine to extract the Company's gold deposit near Omagh, Northern Ireland. Cavanacaw also has developed a premium jewellery business founded on the gold produced under the name Galántas Irish Gold Limited ("Galántas"). As at July 1, 2007, the Company's Omagh mine began production and in 2013 production was suspended. On April 1, 2014, Galántas amalgamated its jewelry business with Omagh.

On April 8, 2014, Cavanacaw acquired Flintridge. Following a strategic review of its business by the Company during 2014 certain assets owned by Omagh were acquired by Flintridge.

The Company's operations include the consolidated results of Cavanacaw, and its wholly-owned subsidiaries Omagh, Galántas and Flintridge.

The Company's common shares are listed on the TSX Venture Exchange ("TSXV") and London Stock Exchange AIM under the symbol GAL. On September 1, 2021, the Company's common shares started trading under the symbol GALKF on the OTCQX in the United States. The primary office is located at The Canadian Venture Building, 82 Richmond Street East, Toronto, Ontario, Canada, M5C 1P1.

3. Basis of Preparation

Statement of compliance

The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"). These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements.

The policies applied in these unaudited condensed interim consolidated financial statements are based on IFRS issued and outstanding as of November 28, 2023 the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed interim consolidated financial statements as compared with the most recent annual consolidated financial statements as at and for the year ended December 31, 2022. Any subsequent changes to IFRS that are given effect in the Company's annual consolidated financial statements for the year ending December 31, 2023 could result in restatement of these unaudited condensed interim consolidated financial statements.

4. Accounts Receivable and Prepaid Expenses

		As at			As at
	September 30,			December 31,
		2023			2022
Sales tax receivable - Canada	$	6,666		$	22,971
Valued added tax receivable - Northern Ireland		173,353			281,308
Accounts receivable		91,791			116,374
Prepaid expenses		1,103,714			1,390,340
	$	1,375,524		$	1,810,993

Prepaid expenses includes advances for consumables and for construction of the passing bays in the Omagh mine. Prepaid expenses includes also $1,000,000 pursuant to services agreement for the underground development at the Omagh Gold Project.

The following is an aged analysis of receivables:

			As at			As at
			September 30,			December 31,
			2023			2022
Less than 3 months		$	215,252		$	343,381
3 to 12 months			44,450			51,868
More than 12 months			12,108			25,404
Total accounts receivable		$	271,810		$	420,653

5. Inventories

			As at			As at
		September 30,			December 31,
			2023			2022
Concentrate inventories		$	14,859		$	83,242

6. Property, Plant and Equipment

		Freehold			Plant
		land and			and			Motor			Office		Development			Assets under
Cost		buildings		machinery (i)				vehicles			equipment			assets (ii)		construction				Total
Balance, December 31, 2021	$	2,363,814		$	8,108,988		$	199,217		$	216,653		$	22,561,674		$	556,273		$	34,006,619
Additions		-			464,632			45,599			9,619			11,008,120			-			11,527,970
Disposals		-			-			(14,531	)		-			-			-			(14,531	)
Transfer		-			529,972			-			-			-			(529,972	)		-
Cash receipts from concentrate sales		-			-			-			-			(823,475	)		-			(823,475	)
Impairment		-			-			-			-			(10,124,920	)		-			(10,124,920	)
Foreign exchange adjustment		(111,761	)		(381,794	)		(9,419	)		(10,243	)		(1,219,359	)		(26,301	)		(1,758,877	)
Balance, December 31, 2022		2,252,053			8,721,798			220,866			216,029			21,402,040			-			32,812,786
Additions		-			-			-			-			1,971,314			330,200			2,301,514
Foreign exchange adjustment		25,940			100,070			2,544			2,488			244,409			-			375,451
Balance, September 30, 2023	$	2,277,993		$	8,821,868		$	223,410		$	218,517		$	23,617,763		$	330,200		$	35,489,751
Accumulated depreciation
Balance, December 31, 2021	$	1,964,309		$	6,067,698		$	147,888		$	137,888		$	-		$	-		$	8,317,783
Depreciation		4,734			587,131			20,676			12,510			-			-			625,051
Disposals		-			-			(3,268	)		-			-			-			(3,268	)
Foreign exchange adjustment		(92,801	)		(276,816	)		(6,681	)		(6,331	)		-			-			(382,629	)
Balance, December 31, 2022		1,876,242			6,378,013			158,615			144,067			-			-			8,556,937
Depreciation		3,000			365,721			13,552			8,418			-			-			390,691
Foreign exchange adjustment		21,528			63,052			1,455			1,428			-			-			87,463
Balance, September 30, 2023	$	1,900,770		$	6,806,786		$	173,622		$	153,913		$	-		$	-		$	9,035,091
Carrying value
Balance, December 31, 2022	$	375,811		$	2,343,785		$	62,251		$	71,962		$	21,402,040		$	-		$	24,255,849
Balance, September 30, 2023	$	377,223		$	2,015,082		$	49,788		$	64,604		$	23,617,763		$	330,200		$	26,454,660

(i) Right-of-use assets of $282,041 is included in additions of the plant and machinery for the year ended December 31, 2022.

(ii) Development assets are expenditures for the underground mining operations in Omagh.

7. Exploration and Evaluation Assets

		Exploration
		and
		evaluation
Cost		assets
Balance, December 31, 2021	$	1,574,183
Additions		1,165,561
Foreign exchange adjustment		(74,431	)
Balance, December 31, 2022		2,665,313
Additions		2,074,404
Foreign exchange adjustment		38,127
Balance, September 30, 2023	$	4,777,844
Carrying value
Balance, December 31, 2022	$	2,665,313
Balance, September 30, 2023	$	4,777,844

(i) On January 26, 2023, the Company announced that it entered into an agreement to acquire a 100% interest and the exclusive rights to explore and develop the Gairloch Project from the owners of the Gairloch Estate lands. The Company has acquired exploration and developments rights for an initial payment of GBP 347,000 and annual payments of GBP 69,000 beginning in year 6.

The lease agreement will continue for 30 years and will be renewable at the election of Galantas, upon 90 days' prior written notice and upon the approval of the lessor, not to be unreasonably withheld, for a further 20-year period, assuming all conditions of this agreement have been met satisfactorily according to the Lessor, acting reasonably, in respect of the Galantas' conduct and operations. Galantas may terminate the agreement with 18 months' notice.

Galantas made a payment of $580,392 (GBP 347,000) representing payment for the first five years of the lease. If the exploration phase continues past the fifth anniversary of the effective date of the agreement, Galantas will pay the lessor GBP 69,400 index linked per lease year for each such lease year following the fifth anniversary of the effective date, with such payment to be made at the commencement of each such lease year.

During any mining phase, Galantas will pay the lessor GBP 50,000 index linked per lease year, with such payment to be made at the commencement of each such lease year. Galantas will grant a 5% net profits interest royalty (the "NPI"), calculated according to standard industry terms and practices with the option by the Lessor to convert the NPI to a 2% net smelter returns royalty, calculated according to standard industry terms and practices.

8. Decommissioning Liability

The Company's decommissioning liability is a result of mining activities at the Omagh mine in Northern Ireland. The Company estimated its decommissioning liability at September 30, 2023 based on a risk-free discount rate of 1% (December 31, 2022 - 1%) and an inflation rate of 1.50% (December 31, 2022 - 1.50%). The expected undiscounted future obligations allowing for inflation are GBP 330,000 and based on management's best estimate the decommissioning is expected to occur over the next 5 to 10 years. On September 30, 2023, the estimated fair value of the liability is $596,970 (December 31, 2022 - $582,441). Changes in the provision during the nine months ended September 30, 2023 are as follows:

		As at			As at
		September 30,			December 31,
		2023			2022
Decommissioning liability, beginning of period	$	582,441		$	600,525
Accretion		7,932			10,154
Foreign exchange		6,597			(28,238	)
Decommissioning liability, end of period	$	596,970		$	582,441

As required by the Crown in Northern Ireland, the Company is required to provide a bond for reclamation related to the Omagh mine in the amount of GBP 300,000 (December 31, 2022 - GBP 300,000), of which GBP 300,000 was funded as of September 30, 2023 (GBP 300,000 was funded as of December 31, 2022) and reported as long-term deposit of $495,300 (December 31, 2022 - $489,660).

9. Accounts Payable and Other Liabilities

Accounts payable and other liabilities of the Company are principally comprised of amounts outstanding for purchases relating to exploration costs on exploration and evaluation assets, general operating activities and professional fees activities.

		As at			As at
		September 30,			December 31,
		2023			2022
Accounts payable	$	2,635,478		$	2,528,245
Accrued liabilities		1,300,112			1,523,796
Advance private placement		679,040			-
Total accounts payable and other liabilities	$	4,614,630		$	4,052,041

The following is an aged analysis of the accounts payable and other liabilities:

		As at			As at
		September 30,			December 31,
		2023			2022
Less than 3 months	$	2,703,877		$	2,939,972
3 to 12 months		1,145,242			412,168
12 to 24 months		128,254			61,247
More than 24 months (see also note 16)		637,257			638,654
Total accounts payable and other liabilities	$	4,614,630		$	4,052,041

10. Financing Facilities

Amounts payable on the Company's financial facilities are as follow:

		As at			As at
		September 30,			December 31,
		2023			2022
Melquart Limited
Financing facilities, beginning of period	$	-		$	-
Financing facility received (i)		580,392			-
Less bonus warrants issued (i)		(16,984	)		-
Accretion		4,954			-
Interest		44,153			-
Foreign exchange adjustment		(7,495	)		-
		605,020			-
G&F Phelps
Financing facility, beginning of period		4,836,267			4,247,488
Accretion		194,517			269,512
Interest		681,150			618,903
Repayment		(100,000	)		(24,120	)
Foreign exchange adjustment		72,830			(275,516	)
		5,684,764			4,836,267
Less current portion		(5,684,764	)		(4,836,267	)
Financing facilities - non-current portion	$	605,020		$	-

(i) On February 13, 2023, the Company announced that it entered into a loan agreement for $580,392 (GBP 347,000) with London-based family office Melquart Limited ("Melquart"). The loan is to be used for the initial lease payment for the Gairloch Project in Scotland. The loan is payable 24 months from the date of the loan agreement and will bear interest at an annual rate of 12% payable upon repayment of the loan. As at September 30, 2023, the amount of interest accrued is $44,153 (GBP 26,743).

As consideration for providing the loan, Melquart received 100,000 warrants of Galantas. Each bonus warrant are exercisable into one common share of Galantas at an exercise price of $0.41, with said warrants expiring on February 13, 2025. The fair value of the 100,000 warrants was estimated at $16,984 using the following Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 97.54%, risk-free interest rate - 3.47% and an expected average life of 1.90 years.

11. Share Capital and Reserves

a) Authorized share capital

At September 30, 2023, the authorized share capital consisted of an unlimited number of common and preference shares issuable in Series.

The common shares do not have a par value. All issued shares are fully paid.

No preference shares have been issued. The preference shares do not have a par value.

b) Common shares issued

At September 30, 2023, the issued share capital amounted to $71,982,149. The continuity of issued share capital for the periods presented is as follows:

		Number of
		common
		shares			Amount
Balance, December 31, 2021		74,683,801		$	57,783,570
Shares issued in private placement (i)		13,111,119			5,900,003
Shares issued for services arrangement (i)		2,222,222			1,000,000
Warrants issued (i)		-			(2,320,000	)
Share issue costs		-			(813,932	)
Exercise of warrants		12,969,667			7,100,006
Balance, September 30, 2022		102,986,809		$	68,649,647
Balance, December 31, 2022		103,518,509		$	69,664,056
Shares issued in private placement (ii)		8,230,951			2,963,142
Shares issued for services arrangement (iii)		933,334			420,000
Shares issued for debt settlement (iv)		2,080,609			749,020
Warrants issued (ii)(iv)		-			(1,609,634	)
Share issue costs (ii)		-			(245,168	)
Exercise of warrants		78,000			40,733
Balance, September 30, 2023		114,841,403		$	71,982,149

(i) On August 30, 2022, Galantas completed a private placement of 13,111,119 units at a price of $0.45 per unit for aggregate gross proceeds of $5,900,003.

In addition, 2,222,222 units were sold to a third-party service provider on the same term as the offering. The gross proceeds being $1,000,000 was offset against certain fees to be paid to the third-party service provider by the Company pursuant to a service agreement between the third-party service provider and the Company dated August 30, 2022, for the underground development at the Omagh Gold Project.

Each unit comprises one common share and one-half common share purchase warrant. Each warrant will be exercisable into one additional common share at an exercise price of $0.55 until February 28, 2025.

The fair value of the 7,666,669 warrants was estimated at $2,320,000 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 128.35%, risk-free interest rate - 3.64% and an expected average life of 2.5 years.

The Company paid the agents a cash commission equal to $355,320 and issue 820,000 non-transferable broker warrants of the Company. Each broker warrant is exercisable to acquire one common share at an exercise price of $0.45 until August 30, 2024. The fair value of the 820,000 warrants was estimated at $212,000 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 109.13%, risk- free interest rate - 3.63% and an expected average life of 2 years.

Melquart Limited ("Melquart") acquired 2,666,667 units for consideration of $1,200,000. Following the offering, Melquart holds 28,140,195 common shares, representing approximately 27.36% of the issued and outstanding common shares on a non-diluted basis. Ocean Partners acquired 461,112 units of the private placement, for consideration of $207,500. Mario Stifano, a director of the Company, acquired 55,556 units for consideration of $25,000.

(ii) On March 27, 2023, the Company closed a non-brokered private placement of 8,230,951 units at a price of $0.36 per unit for gross proceeds of $2,963,142. Each unit consists of one common share of the Company and one common share purchase warrant, with each warrant entitling the holder to purchase an additional common share at a price of $0.55 per share until March 27, 2028. The fair value of the 8,230,951 warrants was estimated at $1,284,806 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 126.22%, risk-free interest rate - 2.96% and an expected average life of 5 years.

The Company paid the agents a cash commission equal to $130,966 and issued 237,162 non-transferable broker warrants of the Company. Each broker warrant is exercisable to acquire one common share at an exercise price of $0.36 until March 27, 2025. The fair value of the 237,162 warrants was estimated at $40,175 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 99.18%, risk-free interest rate - 3.61% and an expected average life of 2 years.

Ocean Partners acquired 691,666 units for consideration of $249,000 and Brendan Morris, and officer of the Company, acquired 468,416 units for consideration of $168,630.

(iii) The Company has entered into an agreement to acquire the historical Gairloch drill and exploration database for (i) a payment of $420,000 (approximately GBP 252,153), to be satisfied through the issuance of common shares of the Company based on the 5-day volume weighted average price at the time of signing (subject to the approval of the TSXV) and (ii) GBP 50,000 in cash. On April 13, 2023, the Company issued 933,334 common shares per terms of the agreement.

(iv) On April 26, 2023, the Company agreed to the terms of a proposed shares-for-debt transaction with several additional arm's length creditors of the Company and agreed to settle a total of approximately $749,020 of indebtedness through the issuance of an aggregate of 2,080,609 units a deemed price of $0.36 per unit. Each unit consists of one common share of the Company and one common share purchase warrant, with each warrant entitling the holder to purchase an additional common share at a price of $0.55 per share until April 26, 2028. The fair value of the 2,080,609 warrants was estimated at $324,828 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 126.25%, risk-free interest rate - 2.98% and an expected average life of 5 years.

c) Warrant reserve

The following table shows the continuity of warrants for the periods presented:

					Weighted
					average
		Number of			exercise
		warrants			price
Balance, December 31, 2021		28,691,598		$	0.39
Issued (notes 11(b)(i) and 14(a)(iii))		8,861,669			0.54
Exercised		(12,969,667	)		0.36
Balance, September 30, 2022		24,583,600		$	0.45
Balance, December 31, 2022		24,051,900		$	0.45
Issued (notes 10(i), 11(b)(ii)(iv) and 14(a)(iv))		11,148,722			0.54
Exercised		(78,000	)		0.40
Expired		(14,707,231	)		0.40
Balance, September 30, 2023		20,415,391		$	0.53

The following table reflects the actual warrants issued and outstanding as of September 30, 2023:

					Grant date			Exercise
		Number			fair value			price
Expiry date		of warrants			($)			($)
December 31, 2023		780,000			274,903			0.33
August 30, 2024		820,000			144,464			0.45
January 31, 2025		500,000			65,527			0.55
February 13, 2025		100,000			16,984			0.41
February 28, 2025		7,666,669			1,644,859			0.55
March 27, 2025		237,162			40,175			0.36
March 27, 2027		8,230,951			1,284,806			0.55
April 26, 2028		2,080,609			324,828			0.55
		20,415,391			3,796,546			0.53

d) Stock options

The following table shows the continuity of stock options for the periods presented:

					Weighted
					average
		Number of			exercise
		options			price
Balance, December 31, 2021		4,885,000		$	0.88
Granted (ii)		1,742,500			0.60
Expired		(255,000	)		1.35
Cancelled (i)		(220,000	)		0.94
Balance, September 30, 2022		6,152,500		$	0.78
Balance, December 31, 2022		6,152,500		$	0.78
Expired		(25,000	)		1.10
Cancelled (i)		(340,000	)		0.76
Balance, September 30, 2023		5,787,500		$	0.78

(i) The portion of the estimated fair value of options granted in the current and prior years and vested during the three and nine months ended September 30, 2023, amounted to $29,277 and $329,658, respectively (three and nine months ended September 30, 2022 - $236,623 and $1,232,600, respectively). In addition, during the three and nine months ended September 30, 2023, nil and 340,000 options granted in the prior years were cancelled (three and nine months ended September 30, 2022 - 15,000 and 220,000 options cancelled).

d) Stock options (continued)

(ii) On May 3, 2022, the Company granted 1,742,500 stock options to directors, officers, employees and consultants of the Company to purchase common shares at $0.60 per share until May 3, 2027. The options will vest as to one third immediately and one third on each of May 3, 2023 and May 3, 2024. The fair value attributed to these options was $900,000 and was expensed in the unaudited condensed interim consolidated statements of loss and credited to equity settled share-based payments reserve.

The following table reflects the actual stock options issued and outstanding as of September 30, 2023:

					Weighted average						Number of
					remaining			Number of			options			Number of
		Exercise			contractual			options			vested			options
Expiry date		price ($)			life (years)			outstanding			(exercisable)			unvested
February 13, 2024		0.90			0.37			85,000			85,000			-
June 27, 2024		0.90			0.74			50,000			50,000			-
May 19, 2026		0.86			2.64			3,610,000			3,610,000			-
June 21, 2026		0.73			2.73			425,000			425,000			-
August 27, 2026		0.86			2.91			20,000			20,000			-
May 3, 2027		0.60			3.59			1,597,500			1,065,000			532,500
		0.78			2.86			5,787,500			5,255,000			532,500

12. Net Loss per Common Share

The calculation of basic and diluted loss per share for the three and nine months ended September 30, 2023 was based on the loss attributable to common shareholders of $1,313,355 and $4,062,485, respectively (three and nine months ended September 30, 2022 - $1,555,824 and $4,551,804, respectively) and the weighted average number of common shares outstanding of 114,841,403 and 110,976,336, respectively (three and nine months ended September 30, 2022 - 92,115,467 and 84,788,729, respectively) for basic and diluted loss per share. Diluted loss did not include the effect of 20,415,391 warrants (three and nine months ended September 30, 2022 - 24,583,600) and 5,787,500 options (three and nine months ended September 30, 2022 - 6,152,500) for the three and nine months ended September 30, 2023, as they are anti-dilutive.

13. Revenues

Shipments of concentrate under the off-take arrangements commenced during the second quarter of 2019. Concentrate sales provisional revenues during the three and nine months ended September 30, 2023 totalled approximately US$333,000 (CAD$450,000) and US$849,000 (CAD$1,148,000), respectively (three and nine months ended September 30, 2022 - US$183,000 and US$402,000, respectively). However, until the mine reaches the commencement of commercial production, the net proceeds from concentrate sales will be offset against Development assets.

14. Related Party Disclosures

Related parties pursuant to IFRS include the Board of Directors, close family members, other key management individuals and enterprises that are controlled by these individuals as well as certain persons performing similar functions.

Related party transactions conducted in the normal course of operations are measured at the exchange amount and approved by the Board of Directors in strict adherence to conflict of interest laws and regulations.

(a) The Company entered into the following transactions with related parties:

			Three Months Ended						Nine Months Ended
			September 30,						September 30,
			2023			2022			2023			2022
Interest on related party loans	(i)	$	179,062		$	214,159		$	528,233 $			376,908

(i) Refer to note 14(a)(iii).

(ii) Refer to note 11(b).

(iii) As at September 30, 2023, the Company owes Ocean Partners $5,579,008 (December 31, 2022 - $4,978,069) which is recorded as due to related parties on the unaudited condensed interim consolidated statement of financial position.

		September 30,			December 31,
		2023			2022
Balance, beginning of period	$	4,978,069		$	2,444,376
Loan received		-			2,062,693
Less bonus warrants		-			(74,000	)
Share issue costs (1)(2)		-			(93,444	)
Advance		-			93,284
Repayment		(21,552	)		(524,255	)
Accretion		92,387			391,128
Interest		528,233			554,073
Foreign exchange adjustment		1,871			124,214
Balance, end of period		5,579,008			4,978,069
Less current balance		(5,579,008	)		(4,978,069	)
Due to related parties - non-current balance	$	-		$	-

(1) 250,000 warrants have been granted to Ocean Partners, which will be exercisable for a period of 12 months at an exercise price of $0.50. The bonus warrants are subject to a hold period under applicable securities laws and the rules of the TSXV, expiring on June 4, 2022. The fair value of the 250,000 warrants was valued at $51,000 using the following Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 107%, risk-free interest rate - 1.22% and an expected average life of 1 year.

(2) 125,000 bonus warrants have been granted to Ocean Partners, which will be exercisable for a period of 12 months at an exercise price of $0.48. The bonus warrants are subject to a hold period under applicable securities laws and the rules of the TSXV, expiring on July 25, 2023. The fair value of the 125,000 warrants was valued at $23,000 using the following Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 95.09%, risk-free interest rate - 3.12% and an expected average life of 1 year.

(a) The Company entered into the following transactions with related parties (continued):

(iv) In December 2022, the Company entered into an agreement (the "Trading Agreement") with Ocean Partners, whereby Ocean Partners has sold on behalf of Galantas call options on 6,000 ounces of gold at 500 ounces per month from February 2024 to January 2025 at a strike price of US$1,775 per ounce for proceeds of US$804,000 to Galantas (an option premium of US$134 per gold ounce). Proceeds from the sale will be used to fund development of the underground mining operations at the Omagh Gold Project in Northern Ireland and working capital.

If the gold price during February 2024 to January 2025 is at or below US$1,775 per ounce, Galantas will receive the price of gold at the time for the sale of its gold produced. If the gold price is above US$1,775 per ounce, Galantas will receive US$1,775 per ounce in revenue for the sale of its gold.

Pursuant to the Trading Agreement, and in return for Ocean Partners facilitating the call option sale and agreeing to maintain all margin requirements on Galantas' behalf, which Galantas has determined has a value of at least $150,000, Galantas has agreed to grant 500,000 warrants to Ocean Partners at an exercise price of $0.55 expiring on January 31, 2025. The warrants are subject to a hold period under applicable securities laws and the rules of the TSXV. The fair value of the 500,000 warrants was valued at $65,527 using the following Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 97.85%, risk-free interest rate - 3.73% and an expected average life of 1.9 year.

As at September 30, 2023, balance related to the Trading Agreement is recorded as other liability on the unaudited condensed interim consolidated statement of financial position is $1,020,712 (December 31, 2022 - $1,085,426).

(b) Remuneration of officer and directors of the Company was as follows:

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2023			2022			2023			2022
Salaries and benefits (1)	$	115,413		$	193,705		$	340,062		$	446,839
Stock-based compensation		20,992			148,268			242,340			781,955
	$	136,405		$	341,973		$	582,402		$	1,228,794

(1) Salaries and benefits include director fees. As at September 30, 2023, due to directors for fees amounted to $105,000 (December 31, 2022 - $70,000) and due to officers, mainly for salaries and benefits accrued amounted to $26,798 (December 31, 2022 - $24,465), and is included with due to related parties.

(c) As at September 30, 2023, the issued shares of Galantas total 114,841,403. Ross Beaty owns 3,744,747 common shares of the Company or approximately 3.3% of the outstanding common shares. Premier Miton owns 4,848,243 common shares of the Company or approximately 4.2%. Melquart owns, directly and indirectly, 28,140,195 common shares of the Company or approximately 24.5% of the outstanding common shares of the Company. G&F Phelps owns 5,353,818 common shares of the Company or approximately 4.7%. Eric Sprott owns 10,166,667 common shares of the Company or approximately 8.9%. Mike Gentile owns 6,217,222 common shares of the Company or approximately 5.4%.

Excluding the Melquart Ltd, Premier Miton, Mr. Beaty, Mr. Phelps, Mr. Sprott and Mr. Gentile shareholdings discussed above, the remaining 55.2% of the shares are widely held, which includes various small holdings which are owned by directors of the Company. These holdings can change at anytime at the discretion of the of the owner.

The Company is not aware of any arrangements that may at a subsequent date result in a change in control of the Company.

15. Segment Disclosure

The Company has determined that it has one reportable segment. The Company's operations are substantially all related to its investment in Cavanacaw and its subsidiaries, Omagh and Flintridge. Substantially all of the Company's revenues, costs and assets of the business that support these operations are derived or located in Northern Ireland. Segmented information on a geographic basis is as follows:

September 30, 2023		United Kingdom			Canada			Total
Current assets	$	489,020		$	1,510,410		$	1,999,430
Non-current assets	$	30,142,659		$	1,585,145		$	31,727,804
Revenues	$	-		$	-		$	-
December 31, 2022		United Kingdom			Canada			Total
Current assets	$	1,659,045		$	1,273,833		$	2,932,878
Non-current assets	$	27,271,081		$	139,741		$	27,410,822
September 30, 2022	United Kingdom				Canada			Total
Revenues	$	-		$	-		$	-

16. Contingency

During the year ended December 31, 2010, the Company's subsidiary Omagh received a payment demand from Her Majesty's Revenue and Customs ("HMRC") in the amount of $502,383 (GBP 304,290) in connection with an aggregate levy arising from the removal of waste rock from the mine site during 2008 and early 2009. Omagh believed this claim to be without merit. An appeal was lodged with the Tax Tribunals Service and the hearing started at the beginning of March 2017 and following a number of adjournments was completed in August 2018. During the year ended December 31, 2019, the Tax Tribunals Service issued their judgement dismissing the appeal by Omagh in respect of the assessments. A provision has now been included in the unaudited condensed interim consolidated financial statements in respect of the aggregates levy plus interest and penalty.

There is a contingent liability in respect of potential additional interest which may be applied in respect of the aggregates levy dispute. Omagh is unable to make a reliable estimate of the amount of the potential additional interest that may be applied by HMRC.

17. Event After the Reporting Period

On November 9, 2023, the Company announced the terms of a proposed non-brokered private placement of up to US$3.0 million aggregate principal amount of unsecured convertible debentures of the Company (the "Debentures"), in the principal amount of US$1,000 per Debenture (the "Offering"). The Company anticipates that the closing of the Offering will occur on or about November 30, 2023 (the "Closing Date").

The net proceeds of the Offering are expected to be used for exploration and development, working capital and for general corporate purposes.

Each Debenture will be convertible at the option of the holder thereof into common shares in the capital of the Company (the "Conversion Shares") at a conversion price of US$0.255 per Conversion Share (the "Conversion Price"), being the equivalent of a conversion price of $0.35 per Conversion Share, at any time prior to 5:00 p.m. (Toronto time) on the last business day immediately preceding the date that is 36 months following the Closing Date (the "Maturity Date"). On the Maturity Date, any outstanding principal amount of Debentures plus any accrued and unpaid interest thereon shall be repaid by the Company in cash. In accordance with the terms of the Debentures, if at any time following the issuance of the Debentures, the closing price of the common shares of the Company on the TSXV equals or exceeds $0.70 per common share for 10 consecutive trading days or more, the Company may elect to convert all but not less than all of the outstanding principal amount of the Debentures into Conversion Shares at the Conversion Price, upon giving the holders of the Debentures not less than 30 calendar days advance written notice.

Interest on the principal amount outstanding under each Debenture shall accrue during the period commencing on the Closing Date until the Maturity Date and shall be payable in cash on an annual basis on December 31st of each year (each, an "Interest Payment Date"); provided, however, that the first Interest Payment Date shall be December 31, 2024. Each Debenture shall bear interest at a minimum interest rate of 10% per annum (the "Base Interest Rate"). During each interest period (an "Interest Period"), being the period commencing on the Closing Date to but excluding the first Interest Payment Date and thereafter the period from and including an Interest Payment Date to but excluding the next Interest Payment Date or other applicable payment date, the Base Interest Rate will be adjusted based on a gold price of US$2,000 per ounce, with the Base Interest Rate being increased by 1% per annum for each US$100 in which the average gold price for such Interest Period exceeds US$2,000 per ounce, up to a maximum interest rate of 30% per annum. Any adjustment to the Base Interest Rate in respect of an Interest Period shall be calculated based on the average gold price quoted by the London Bullion Market Association, being the LBMA Gold Price PM, in respect of the first Interest Period, from the Closing Date to and including December 15, 2024, and for each subsequent Interest Period, from January 1st to and including December 15th of that year or 15 days prior to the applicable payment date.

In connection with the Offering, certain finders may receive from the Company: (i) a cash finder's fee payment equal to 5.0% of the gross proceeds raised under the Offering from subscribers introduced to the Company by such finder; and

(ii) such number of non-transferable finder's warrants as is equal to 5.0% of the maximum number of Conversion Shares issuable under the Debentures sold under the Offering to subscribers introduced to the Company by such finder. Each finder warrant will be exercisable to acquire one common share in the capital of the Company at the Conversion Price at any time on or before that date which is 36 months following the Closing Date.

The Offering remains subject to the acceptance of the TSXV. The securities issued pursuant to the Offering will be subject to a four-month hold period under applicable Canadian securities laws.

 

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