Interim Results

Galantas Gold Corporation
15 August 2006




                             NOTICE TO SHAREHOLDERS
                          FOR THE THREE AND SIX MONTHS
                              ENDED JUNE 30, 2006

                          GALANTAS GOLD CORPORATION
                         (A Development Stage Company)




Responsibility for Consolidated Financial Statements


The accompanying consolidated financial statements for Galantas Gold Corporation
have been prepared by management in accordance with Canadian generally accepted
accounting principles consistently applied.  The most significant of these
accounting principles have been set out in the December 31, 2005 audited
consolidated financial statements. Only changes in accounting information have
been disclosed in these consolidated financial statements.  These statements are
presented on the accrual basis of accounting.  Accordingly, a precise
determination of many assets and liabilities is dependent upon future events.
Therefore, estimates and approximations have been made using careful judgment.
Recognizing  that the Company is responsible for both the integrity and
objectivity of the consolidated financial statements, management is satisfied
that these consolidated financial statements have been fairly presented.


Auditors' involvement


The auditors of Galantas Gold Corporation have not performed a review of the
unaudited consolidated financial statements for the three and six months ended
June 30, 2006 and June 30, 2005.



GALANTAS GOLD CORPORATION
(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS (PREPARED BY MANAGEMENT)


                                                      June 30,             December 31,
                                                       2006                    2005
                                                    (Unaudited)             (Audited)
Assets
Current
Cash                                               $     321,659        $     1,121,985
Accounts receivable and advances                         243,849                144,727
Inventory                                                 98,516                101,363
Future income taxes                                      302,900                302,900

                                                         966,924              1,670,975

Property, plant and equipment (Note 2(a))              4,426,734              2,903,165

Deferred development costs (Note 2(b))                 5,619,033              4,314,368

Future income taxes                                      466,900                466,900

                                                   $  11,479,591        $     9,355,408


Liabilities

Current
Accounts payable and accrued liabilities           $     536,456         $      297,785
Current portion of financing facility (Note 3)           218,706                 99,207
Due to directors                                               -                253,103

                                                         755,162                650,095



Long-term portion of financing facility (Note 3)         444,533                271,664

                                                       1,199,695                921,759

Shareholders' Equity

Share capital (Note 4)                                21,203,528             18,400,862

Warrants (Note 5)                                              -                175,166

Contributed surplus  (Note 7)                            820,324                656,658

                                                      22,023,852             19,232,686

Deficit                                             (11,743,956)           (10,799,037)

                                                      10,279,896              8,433,649

                                                $     11,479,591         $    9,355,408





GALANTAS GOLD CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(PREPARED BY MANAGEMENT)
(UNAUDITED)

                         Cumulative since 
                     development stage on               Three Months Ended                     Six Months Ended 
                          January 1, 2003                     June 30,                            June 30, 
                            June 30, 2006         2006                 2005               2006              2005 

Sales                       $     468,438       $     11,047         $     15,623       $     14,892      $     36,120  
   
Cost of goods sold                519,208              4,277               18,671              5,900            43,166  
                                 (50,770)              6,770              (3,048)              8,992           (7,046)  
   
Expenses 
 Accounting and corporate          90,931             10,575              11,100              22,855            19,630  
 Bank charges and interest         21,564              1,563               3,553               3,334             3,553  
 Consulting                        64,757             14,007              16,250              14,007            19,500  
 Foreign exchange (gain)loss    (101,629)             13,036              33,675              22,191            20,236  
 Legal and audit                  378,296            123,176              36,384             180,434            66,018  
 Management fees                  247,500                  -              25,000                   -            50,000  
 Operating expenses             1,230,475             26,407             157,914              51,049           231,953  
 Shareholder communication 
  and public relations            679,519            172,261                   -             448,073                 -  
 Stock-based compensation         686,266             51,666             214,200             163,666           214,200  
 Transfer agent                    80,732             11,419               7,496              16,954             8,750  
 Travel and general office        186,764            (6,325)              10,396              31,348            30,157  
                                3,565,175            417,785             515,968             953,911           663,997  
  
 

Loss before income taxes      (3,615,945)          (411,015)           (519,016)           (944,919)         (671,043)  
   
Income tax recovery               769,800            (9,200)                   -                   -                 -  
 
Loss for the period           (2,846,145)          (420,215)           (519,016)           (944,919)         (671,043)  
   
DEFICIT, beginning of
 period                       (8,897,811)       (11,323,741)        (10,912,632)        (10,799,037)      (10,760,605) 
 
DEFICIT, end of period      $(11,743,956)      $(11,743,956)       $(11,431,648)       $(11,743,956)     $(11,431,648)  
   
 
Loss per share                                 $        0.00       $        0.00       $        0.01     $        0.01  
   
Weighted average number 
 of shares outstanding                           143,177,902         123,293,089         135,744,586       107,297,472



GALANTAS GOLD CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS (PREPARED BY MANAGEMENT)
(UNAUDITED)

                         Cumulative since 
                     development stage on               Three Months Ended                     Six Months Ended 
                          January 1, 2003                     June 30,                            June 30, 
                            June 30, 2006         2006                 2005               2006              2005 

CASH (USED IN) PROVIDED BY 
OPERATING ACTIVITIES 
Net loss for the
period                      $ (2,846,145)      $   (420,215)       $   (519,016)       $   (944,919)     $   (671,043)  
   
Adjustment for 
Amortization                      165,975              1,599              24,479               3,017            41,025  
Stock-based compensation          686,266             51,666             214,200             163,666           214,200  
Future income taxes             (769,800)              9,200                   -                   -                 - 
Net change in non-cash    
working capital (Note 10)         143,864           (143,605)           (97,301)             142,396          (25,445)  
                              (2,619,840)           (501,355)          (377,638)           (635,840)         (441,263)  
   
INVESTING ACTIVITIES 
Purchase of property, 
 plant and equipment          (2,871,582)         (1,133,957)          (545,932)         (1,664,350)         (545,932) 
Deferred development
 costs                        (2,165,794)           (731,563)                  -         (1,166,901)                 -  
Marketable securities               2,096                   -                  -                   -                 -  
                              (5,035,280)         (1,865,520)          (545,932)         (2,831,251)         (545,932)  
   
FINANCING ACTIVITIES 
Issue of common shares 
 for cash                       7,764,053           1,757,583          2,413,783           2,627,500         3,279,283  
   
Share issue costs               (360,400)                   -                  -                   -                 -  
Advances from financing
 facility                         920,400                   -            461,498             365,400           454,168  
Repayments of financing
 facility                       (313,303)            (51,989)                  -            (73,032)                 -  
Advances to directors           (127,140)           (104,303)          (387,482)           (253,103)         (318,861)  
                                7,883,610           1,601,291          2,487,799           2,666,765         3,414,590  
   
 
NET CHANGE IN CASH                228,490           (765,584)          1,564,229           (800,326)         2,427,395  
 
CASH, beginning of period          93,169           1,087,243            996,922           1,121,985           133,756  
   
CASH, end of period        $      321,659      $      321,659       $  2,561,151       $     321,659      $  2,561,151  
   
 


GALANTAS GOLD CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (PREPARED BY MANAGEMENT)
(UNAUDITED)

                  Shares issued and subscribed     Warrant     Contributed 
                  (#) of Shares    Share Value     Value           Surplus      Deficit            Total 
Balance at 
January 1, 2003      71,115,222    $ 13,082,493     $     -    $     1,420      $ (8,897,811)   $ 4,186,102      
Shares issued 
on exercise of  
warrants               250,000           27,461           -              -                  -        27,461      
Common shares 
issued, net of 
issue costs          8,707,860        1,048,524           -              -                  -     1,048,524      
Common shares 
issued for 
debt settlement      7,416,395          741,640           -              -                  -       741,640      
Valuation of 
agents options               -                -           -         20,751                  -        20,751      
Valuation of 
warrants issued              -         (78,537)      78,537              -                  -             -      
Loss for the
year                         -                -           -              -          (676,142)     (676,142)      
Balance at 
December 31, 2003   87,489,477       14,821,581      78,537         22,171        (9,573,953)     5,348,336      
Shares issued 
on exercise of  
warrants               945,554          159,089           -              -                  -       159,089      
Common shares 
issued, net of 
issue costs          2,866,825          395,318           -              -                  -       395,318      
Valuation of 
stock options  
granted                      -                -           -        287,649                  -       287,649      
Valuation of 
warrants issued              -         (71,671)      71,671              -                  -             -      
Valuation of 
warrants exercised 
or expired                    -          17,570    (78,537)         60,967                  -             -      
Loss for the
year                          -               -           -              -        (1,186,652)   (1,186,652)      
Balance at 
December 31, 2004    91,301,856      15,321,887      71,671        370,787       (10,760,605)     5,003,740      
Common shares 
issued, net 
of issue costs       35,033,333       3,254,141           -              -                  -     3,254,141      
Valuation of 
warrants issued               -       (175,166)     175,166              -                  -             -      
Valuation of 
warrants expired              -               -    (71,671)         71,671                  -             -      
Valuation of 
stock options
granted                       -               -           -        214,200                  -       214,200      
Loss for the year             -               -           -              -           (38,432)      (38,432)      
Balance at 
December 31,2005    126,335,189      18,400,862     175,166        656,658       (10,799,037)     8,433,649      
Shares issued on 
exercise of 
warrants             17,516,666       2,627,500           -              -                  -     2,627,500      
Valuation of 
warrants
exercised                     -         175,166   (175,166)              -                  -             -      
Valuation of 
stock options
granted                       -               -           -        163,666                  -       163,666      
Loss for the
period                        -               -           -              -          (944,919)     (944,919)      
Balance at 
June 30, 2006       143,851,855   $  21,203,528      $    -      $ 820,324      $(11,743,956)   $10,279,896    


GALANTAS GOLD CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (PREPARED BY MANAGEMENT)
THREE AND SIX MONTHS ENDED JUNE 30, 2006
(UNAUDITED)


1.  NATURE OF OPERATIONS AND GOING CONCERN

These 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. The recoverability of these consolidated amounts, which includes the
consolidated results of the Company's wholly-owned subsidiary Cavanacaw
Corporation ('Cavanacaw'), is dependent on the ability of the Company to obtain
future financing and to recover its investment in Omagh Minerals Limited
('Omagh'). Cavanacaw has a 100% shareholding in Omagh which is engaged in the
acquisition, exploration and development of gold properties, mainly in Omagh,
Northern Ireland. The Company is considered to be in the development stage as it
has yet to earn substantial revenues and it is devoting substantially all of its
efforts toward the development of this process.

As at December 31, 2001, studies performed on Omagh's mineral property confirmed
the existence of economically recoverable reserves.  The mineral property is
currently in the development stage of operation and the directors believe that
the capitalized development expenditures will be fully recovered by the future
operation of the mine.  The recoverability of Omagh's capitalized development
costs is thus dependent on the ability to secure financing, future profitable
production or proceeds from the disposition of the mineral property.  These
development expenditures will be amortized over the estimated life of the ore
body.

Management is confident that it will be able to secure the required financing to
enable the Company to continue as a going concern. However, this is of subject
to a number of factors including market conditions.  These consolidated
financial statements do not reflect adjustments to the carrying value of assets
and liabilities, the reported expenses and balance sheet classifications used
that would be necessary if the going concern assumption was not appropriate.
Such adjustments could be material.

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.  Its first exploration project was a property in
Portugal. 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.   Cavanacaw also has developed a premium
jewellery business founded on the gold produced under the name Galantas Irish
Gold Limited ('Galantas').

Cavanacaw operations include the consolidated results of Cavanacaw and its
wholly-owned subsidiaries Omagh and Galantas.

The unaudited consolidated financial statements have been prepared in accordance
with Canadian generally accepted accounting principles for interim financial
information.  Accordingly, they do not include all of the information and notes
to the consolidated financial statements required by Canadian generally accepted
accounting principles for annual consolidated financial statements.  In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.  Operating
results for the three and six month periods ended June 30, 2006 may not
necessarily be indicative of the results that may be expected for the year
ending December 31, 2006.


GALANTAS GOLD CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (PREPARED BY MANAGEMENT)
THREE AND SIX MONTHS ENDED JUNE 30, 2006
(UNAUDITED)


1. NATURE OF OPERATIONS AND GOING CONCERN (Continued)

The consolidated balance sheet at December 31, 2005 has been derived from the
audited consolidated financial statements at that date but does not include all
of the information and footnotes required by Canadian generally accepted
accounting principles for complete consolidated financial statements.  The
interim consolidated financial statements have been prepared by management in
accordance with the accounting policies described in the Company's annual
consolidated financial statements for the year ended December 31, 2005.  For
further information, refer to the consolidated financial statements and notes
for the year ended December 31, 2005.

New accounting pronouncement

In January 2005, the Canadian Institute of Chartered Accountants issued four new
accounting standards: Handbook Section 1530, Comprehensive Income, Handbook
Section 3251, Equity, Handbook  Section 3855, Financial Instruments -
Recognition and Measurement and Handbook Section 3865, Hedges. These standards
are effective for interim and annual consolidated financial statements for the
Company's fiscal years beginning January 1, 2007.  As of June 30, 2006, the
impact of implementing these new standards is not yet determinable.


2.  PROPERTY, PLANT AND EQUIPMENT AND DEFERRED DEVELOPMENT COSTS

(a) Property, plant and equipment 

                                                              2006                                        2005      
                                                           Accumulated 
                                           Cost            Amortization         Net                         Net 
     Freehold land and buildings     $     3,009,697       $     36,243         $     2,973,454       $  1,743,967   
     Plant and machinery                   1,885,322            470,850               1,414,472          1,115,756  
     Motor vehicles                           34,511             28,124                   6,387              7,214      
     Office equipment                         71,275             38,854                  32,421             36,228      
     Moulds                                   81,802             81,802                       -                  -      
                                     $     5,082,607       $    655,873         $     4,426,734       $  2,903,165      
 

GALANTAS GOLD CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (PREPARED BY MANAGEMENT)
THREE AND SIX MONTHS ENDED JUNE 30, 2006
(UNAUDITED)

2.  PROPERTY, PLANT AND EQUIPMENT AND DEFERRED DEVELOPMENT COSTS (Continued)

(b) Deferred development costs 
                                                       Three months         Six months 
                                                           ended              ended 
                                                      June 30, 2006       June 30, 2006 

Opening balance                                    $     4,811,687      $    4,314,368      
Additions during the period: 
     Leases                                                153,375             153,527      
     Consultants                                            53,809             124,218      
     Fuel                                                   53,147              80,441      
     Wages                                                 174,385             364,530      
     Interest                                               12,883              19,889      
     Travelling                                             41,699              68,676      
     Repairs and maintenance                                25,750              72,582      
     Construction                                          194,510             246,301      
     General                                                22,003              36,737      
     Amortization of plant equipment                        75,785             137,764      
                                                           807,346           1,304,665      
Total deferred development costs                    $    5,619,033       $   5,619,033 



3.   FINANCING FACILITY

On March 17, 2006, the Company received a loan from Barclays Mercantile Business
Finance Ltd. in the amount of $365,400 (180,000 GBP)(i) to assist in the
purchase of certain metallurgical equipment having a cost of $728,770 (359,000
GBP). The loan is for a period of three years at 3.97% (flat interest) with
monthly blended installments of $11,132 (5,578 GBP).

Amounts payable on the long term debt are as follows:

                                                                      June 30,     December 31, 
                                                Interest               2006            2005 
Financing facility                                 3.71%          $    324,975     $   370,871      
Financing facility (i)                             3.97%               338,264               -      
                                                                       663,239         370,871      
Less current portion                                                   218,706          99,207      
                                                                  $    444,533     $   271,664      
Principal repayments over the next three years are as follows: 
 
     2007                                                         $   218,706           
     2008                                                             235,899           
     2009                                                             208,634           
                                                                  $   663,239           

GALANTAS GOLD CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (PREPARED BY MANAGEMENT)
THREE AND SIX MONTHS ENDED JUNE 30, 2006
(UNAUDITED)


4.  SHARE CAPITAL

(a) AUTHORIZED

Unlimited number of common and preference shares issuable in Series

(b) COMMON SHARES ISSUED


                                             NUMBER OF            STATED
                                                SHARES             VALUE

Balance, January 1, 2006                   126,335,189    $   18,400,862
Warrant exercise                            17,516,666         2,627,500
Warrant exercise - valuation                         -           175,166
Balance, June 30, 2006                     143,851,855    $   21,203,528
                                   

5.  WARRANTS

During the period, 11,666,666 warrants expiring April 4, 2006 and 5,850,000
warrants expiring April 15, 2006 were exercised for gross proceeds of
$2,627,500.

As of June 30, 2006, there were no warrants outstanding.


6.  STOCK OPTIONS

The Company has a stock option plan as detailed in Note 7(c) of the December 31,
2005 audited consolidated financial statements.


                                        Number of            Weighted Average
                                      Stock Options           Exercise Price
                                                                    $

Balance, January 1, 2006                 7,900,000                0.11
Options granted                          1,000,000                0.26
Expired/cancelled                      (1,400,000)                0.15
Balance, June 30, 2006                   7,500,000                0.14


Details of the stock options outstanding as of June 30, 2006 are:

                Exercisable         Number            Exercise       Expiry
                Options             of Options        Price          Date
                                                      $
                 1,500,000          1,500,000          0.12           May 17, 2007
                 2,800,000          2,800,000          0.15           April 10, 2008
                 2,000,000          2,000,000          0.10           April 1, 2009 
                   133,334            200,000          0.10           May 13, 2010
                   333,334          1,000,000          0.26           June 14, 2011
                 6,766,668          7,500,000



GALANTAS GOLD CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (PREPARED BY MANAGEMENT)
THREE AND SIX MONTHS ENDED JUNE 30, 2006
(UNAUDITED)


6.  STOCK OPTIONS (Continued)

During the period, 1,000,000 stock options were granted to employees of the
Company to purchase common shares at a price of $0.26 per share until June 14,
2011. The fair value of these stock options was estimated using the Black-
Scholes option pricing model with the following assumptions: dividend yield -
0%; volatility - 60%; risk-free interest rate - 4.26% and an estimated life of 5
years. The estimated fair value of $143,000 will be expensed in the statement of
operations and deficit and credited to contributed surplus as the options vest
over a three year period. Stock-based compensation includes $47,666 related to
the vested portion of these stock options.

Stock-based compensation also includes $116,000 relating to 733,333 options that
have vested from previous stock option grants.

On February 13, 2006, 1,000,000 stock options at an exercise price of $0.15
expired and 400,000 options at an exercise price of $0.15 expiring April 10,
2008 were cancelled.


7.   CONTRIBUTED SURPLUS

The following table reflects the continuity of contributed surplus:


                                             Contributed
                                                Surplus

Balance, January 1, 2006               $       656,658

Stock-based compensation charged to 
the statement of operations and
deficit (Note 6)                              163,666

Balance, June 30, 2006                 $       820,324



8.  RELATED PARTY TRANSACTIONS

As at June 30, 2006, the Company was indebted to directors in the amount of $nil
(2005 - $110,850). This amount represents amounts paid by the directors on
behalf of the Company along with unpaid management fees.  These amounts are
interest-free and there are no fixed terms of repayment.

During the period, the Company was charged $nil (2005 - $50,000) by directors of
the Company for management services which are in the normal course of operations
and are measured at the exchange amount established and agreed to by the related
parties. Accounts payable includes $nil (2005 - $50,000) owing to these
directors for management services and repayment of expenses incurred on behalf
of the Company.

The Company was charged $24,926 (2005 - $19,630) for accounting and corporate
secretarial services by  companies associated to an officer of the Company.
Accounts payable includes $12,494 (2005 - $1,738) owing to these companies.


9.  SEGMENT DISCLOSURE

The Company, after reviewing its reporting systems, 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 Galantas.
Substantially all of Cavanacaw's revenues, costs and assets of the business that
support these operations are derived or located in Northern Ireland.


GALANTAS GOLD CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (PREPARED BY MANAGEMENT)
THREE AND SIX MONTHS ENDED JUNE 30, 2006
(UNAUDITED)

10.  SUPPLEMENTAL CASH FLOW INFORMATION

(a)  Net change in non-cash working capital


                                 Three months        Three months         Six months           Six months
                                    ended               ended                ended               ended
                                June 30, 2006        June 30, 2005      June 30, 2006        June 30, 2005

Accounts receivable and
advances                      $    (12,140)         $    (81,510)        $   (99,122)        $   (48,326)
Inventory                             3,006                13,925               2,847              25,837
Accounts payable and
accrued liabilities               (134,471)              (29,716)             238,671             (2,956)

                              $   (143,605)         $    (97,301)        $    142,396        $   (25,445)


(b)  Supplemental information


Interest paid                 $      14,447         $       3,553        $     23,223        $      3,553



Interest paid includes $19,889 (2005 - $nil) of interest paid on the financing
facility.  This amount was charged to deferred development costs.


11.  OTHER INFORMATION


Effective March 31, 2006 the Company's shares were successfully admitted to
trading on the Alternative Investment Market ('AIM') of the London Stock
Exchange.  As a result, the Company is dual-listed on both AIM and the TSX
Venture Exchange in Canada.


12.  SUBSEQUENT EVENT

The Company closed a private placement (the 'Offering') for gross proceeds of
$3,500,000.  Pursuant to this offering, the Company issued 14,000,000 units of
the Company (each a 'Unit') at the price of $0.25 per Unit (including an over-
allotment of 1,200,000 Units (the 'Over-Allotment') and 2,000,000 Units for
subscribers specifically identified by management (the 'President's List'). Each
Unit consists of one common share of the Company and one warrant of the Company.
Each warrant entitles the purchaser to purchase one common share at a price of
$0.32 per share at any time until July 26, 2008. The shares will carry a 4-month
minimum hold period. An application will be made to admit any new shares issued
under the placing to trading on AIM on the same day that they become eligible
for trading on the TSX Venture Exchange.


Union Securities Ltd., acting as agent (the 'Agent') was paid a cash fee of
$260,000 representing 8% in cash commission based on Units sold under the
Offering and the Over-Allotment Option (excluding Units sold pursuant to the
President's List) and 4% in cash for Units sold pursuant to the President's
List. In addition, the Company issued to the Agent 1,300,000 compensation
options (the 'Agent's Compensation Options') equal to 10% of all Units sold
pursuant to the Offering and the Over-Allotment Option (excluding Units sold
pursuant to the President's List) and 5% of all Units sold pursuant to the
President's List. Each Agent's Compensation Option entitles the Agent to
purchase one Unit of  the Company at $0.25 per Unit at any time prior to July
26, 2008.


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