10:00 Fri 29 May 2015
Galantas Gold Corp - 1st Quarter Results
TSXV & AIM : Symbol GAL
GALANTAS REPORTS RESULTS FOR THE QUARTER ENDED
Financial Highlights
The Net Loss for the Quarter ended
|
Quarter Ended |
|
All in CDN$ |
2015 |
2014 |
Revenue |
|
|
Cost of Sales |
|
|
(Loss) before the undernoted |
|
|
Amortization |
|
|
General administrative expenses |
|
|
(Gain) Loss on disposal of property, plant and equipment |
$ - |
|
Unrealized gain on fair value of derivative financial liability |
$ ( 8,000) |
|
Foreign exchange loss |
|
|
Net (Loss) for the Quarter |
|
$ ( 502,100) |
Working Capital (Deficit) |
|
|
Cash (loss)generated from operations before changes in non-cash working capital |
|
|
Cash at |
|
|
Revenue for the quarter ended
Cost of sales for the quarter ended
The Net Loss for the quarter ended
The Company's cash balances
Production
Production at the Omagh mine remains suspended awaiting planning consent to continue operations underground. Due to continued delays in the planning process, management has made significant redundancies in the workforce, alongside other cost reduction measures.
During the first half of 2014 the Company carried out pilot tests with regards to the processing of tailing cells filled during the earlier operation of the mine. The results of these tests indicated that it is possible to successfully process the tailing cells. However a subsequent investigation of process economics suggested that the operation may best be carried out in conjunction with processing ore from the underground mine.
Exploration
The granting of a further two prospecting licences in the
Permitting
During 2012 the planning application for an underground mine together with the Environmental Impact Study in connection with the proposed underground development were submitted to the Planning Services. The Company has been advised that officials at the
Annual General Meeting
The Annual and Special Meeting of the Company has been called for
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/6209O_-2015-5-29.pdf
Qualified Person
The financial components of this disclosure has been reviewed by
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.
Neither
Enquiries
Email: info@galantas.com
Website: www.galantas.com
Telephone: +44 (0) 2882 241100
Telephone +44 (0)20 7149 6000
NOTICE TO READER
The accompanying unaudited condensed interim consolidated financial statements of
|
Condensed Interim Consolidated Statements of Financial Position |
(Expressed in Canadian Dollars) |
(Unaudited) |
|
|
As at |
|
|
As at |
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash |
$ |
380,764 |
|
$ |
20,259 |
|
Accounts receivable and prepaid expenses (note 4) |
|
89,261 |
|
|
102,213 |
|
Inventories (note 5) |
|
115,829 |
|
|
111,137 |
|
Total current assets |
|
585,854 |
|
|
233,609 |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Property, plant and equipment (note 6) |
|
7,324,503 |
|
|
7,087,455 |
|
Long-term deposit (note 8) |
|
565,020 |
|
|
542,130 |
|
Exploration and evaluation assets (note 7) |
|
2,172,688 |
|
|
2,070,772 |
|
Total non-current assets |
|
10,062,211 |
|
|
9,700,357 |
|
Total assets |
$ |
10,648,065 |
|
$ |
9,933,966 |
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable and other liabilities (note 9) |
$ |
885,236 |
|
$ |
869,322 |
|
Due to related parties (note 13) |
|
3,377,658 |
|
|
3,095,983 |
|
Total current liabilities |
|
4,262,894 |
|
|
3,965,305 |
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Decommissioning liability (note 8) |
|
579,889 |
|
|
553,544 |
|
Derivative financial liability (note 10(c)) |
|
392,000 |
|
|
368,000 |
|
Total non-current liabilities |
|
971,889 |
|
|
921,544 |
|
Total liabilities |
|
5,234,783 |
|
|
4,886,849 |
|
|
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
|
Share capital (note 10(a)(b)) |
|
32,351,440 |
|
|
31,825,575 |
|
Reserves |
|
6,858,729 |
|
|
6,604,330 |
|
Deficit |
|
(33,796,887 |
) |
|
(33,382,788 |
) |
Total equity |
|
5,413,282 |
|
|
5,047,117 |
|
Total equity and liabilities |
$ |
10,648,065 |
|
$ |
9,933,966 |
|
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
Going concern (note 1)
Contingent liability (note 15)
Approved on behalf of the Board: |
|
" |
" |
|
Condensed Interim Consolidated Statements of Loss |
(Expressed in Canadian Dollars) |
(Unaudited) |
|
|
Three Months |
|
|||
|
|
Ended |
|
|||
|
|
|
|
|||
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
Gold sales |
$ |
1,123 |
|
$ |
- |
|
|
|
|
|
|
|
|
Cost and expenses of operations |
|
|
|
|
|
|
Cost of sales (note 12) |
|
69,997 |
|
|
77,234 |
|
Depreciation (note 6) |
|
52,293 |
|
|
65,092 |
|
|
|
122,290 |
|
|
142,326 |
|
|
|
|
|
|
|
|
Loss before the undernoted |
|
(121,167 |
) |
|
(142,326 |
) |
|
|
|
|
|
|
|
General administrative expenses |
|
|
|
|
|
|
Management and administration wages (note 13) |
|
130,619 |
|
|
138,033 |
|
Other operating expenses |
|
33,772 |
|
|
36,904 |
|
Accounting and corporate |
|
15,396 |
|
|
14,627 |
|
Legal and audit |
|
21,810 |
|
|
28,942 |
|
Shareholder communication and investor relations |
|
30,217 |
|
|
25,604 |
|
Transfer agent |
|
1,980 |
|
|
3,076 |
|
Director fees (note 13) |
|
5,000 |
|
|
5,000 |
|
General office |
|
1,981 |
|
|
2,322 |
|
Accretion expenses (note 8) |
|
2,966 |
|
|
2,883 |
|
Loan interest and bank charges (note 13) |
|
17,791 |
|
|
14,790 |
|
|
|
261,532 |
|
|
272,181 |
|
Other expenses |
|
|
|
|
|
|
Gain on disposal of property, plant and equipment |
|
- |
|
|
(548 |
) |
Unrealized gain on fair value of derivative financial liability (note 10(c)) |
|
(8,000 |
) |
|
- |
|
Foreign exchange loss |
|
39,400 |
|
|
88,141 |
|
|
|
31,400 |
|
|
87,593 |
|
|
|
|
|
|
|
|
Net loss for the period |
$ |
(414,099 |
) |
$ |
(502,100 |
) |
Basic and diluted net loss per share (note 11) |
$ |
(0.01 |
) |
$ |
(0.01 |
) |
Weighted average number of common shares outstanding - basic and diluted |
|
81,747,570 |
|
|
51,242,015 |
|
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
|
Condensed Interim Consolidated Statements of Loss and Other Comprehensive Income |
(Expressed in Canadian Dollars) |
(Unaudited) |
|
|
Three Months |
|
|||
|
|
Ended |
|
|||
|
|
|
|
|||
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
$ |
(414,099 |
) |
$ |
(502,100 |
) |
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
Items that will be reclassified subsequently to profit or loss |
|
|
|
|
|
|
Foreign currency translation differences |
|
254,399 |
|
|
451,759 |
|
Total comprehensive loss |
$ |
(159,700 |
) |
$ |
(50,341 |
) |
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
|
Condensed Interim Consolidated Statements of Cash Flows |
(Expressed in Canadian Dollars) |
(Unaudited) |
|
|
Three Months |
|
|||
|
|
Ended |
|
|||
|
|
|
|
|||
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
Net loss for the period |
$ |
(414,099 |
) |
$ |
(502,100 |
) |
Adjustment for: |
|
|
|
|
|
|
Depreciation |
|
52,293 |
|
|
65,092 |
|
Foreign exchange |
|
(134,248 |
) |
|
(84,860 |
) |
Gain on disposal of property, plant and equipment |
|
- |
|
|
(548 |
) |
Accretion expenses (note 8) |
|
2,966 |
|
|
2,883 |
|
Unrealized gain on fair value of derivative financial liability (note 10(c)) |
|
(8,000 |
) |
|
- |
|
Non-cash working capital items: |
|
|
|
|
|
|
Accounts receivable and prepaid expenses |
|
12,952 |
|
|
151,206 |
|
Inventories |
|
(4,692 |
) |
|
(15,437 |
) |
Accounts payable and other liabilities |
|
15,914 |
|
|
(93,851 |
) |
Due to related parties |
|
236,313 |
|
|
287,561 |
|
Net cash used in operating activities |
|
(240,601 |
) |
|
(190,054 |
) |
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
- |
|
|
(33,727 |
) |
Proceeds from sale of property, plant and equipment |
|
- |
|
|
917 |
|
Exploration and evaluation assets |
|
(17,019 |
) |
|
(9,381 |
) |
Net cash used in investing activities |
|
(17,019 |
) |
|
(42,191 |
) |
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
Proceeds of private placement |
|
607,062 |
|
|
- |
|
Share issue costs |
|
(49,197 |
) |
|
- |
|
Advances from related parties |
|
45,362 |
|
|
127,792 |
|
Net cash provided by financing activities |
|
603,227 |
|
|
127,792 |
|
|
|
|
|
|
|
|
Net change in cash |
|
345,607 |
|
|
(104,453 |
) |
|
|
|
|
|
|
|
Effect of exchange rate changes on cash held in foreign currencies |
|
14,898 |
|
|
(2,548 |
) |
|
|
|
|
|
|
|
Cash, beginning of period |
|
20,259 |
|
|
166,617 |
|
|
|
|
|
|
|
|
Cash, end of period |
$ |
380,764 |
|
$ |
59,616 |
|
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
|
Condensed Interim Consolidated Statements of Changes in Equity |
(Expressed in Canadian Dollars) |
(Unaudited) |
|
|
|
|
|
Reserves |
|
|
|
|
|
|
|
|||
|
|
|
|
|
Equity settled |
|
|
Foreign |
|
|
|
|
|
|
|
|
|
|
|
|
share-based |
|
|
currency |
|
|
|
|
|
|
|
|
|
Share |
|
|
payments |
|
|
translation |
|
|
|
|
|
|
|
|
|
capital |
|
|
reserve |
|
|
reserve |
|
|
Deficit |
|
|
Total |
|
Balance, |
$ |
29,874,693 |
|
$ |
5,471,109 |
|
$ |
782,351 |
|
$ |
(28,118,061 |
) |
$ |
8,010,092 |
|
Net loss and other comprehensive income for the period |
|
- |
|
|
- |
|
|
451,759 |
|
|
(502,100 |
) |
|
(50,341 |
) |
Balance, |
$ |
29,874,693 |
|
$ |
5,471,109 |
|
$ |
1,234,110 |
|
$ |
(28,620,161 |
) |
$ |
7,959,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, |
$ |
31,825,575 |
|
$ |
5,471,109 |
|
$ |
1,133,221 |
|
$ |
(33,382,788 |
) |
$ |
5,047,117 |
|
Shares issued in private placement (note 10(b)(i)) |
|
607,062 |
|
|
- |
|
|
- |
|
|
- |
|
|
607,062 |
|
Warrants issued (note 10(b)(i)) |
|
(32,000 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(32,000 |
) |
Share issue costs |
|
(49,197 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(49,197 |
) |
Net loss and other comprehensive income for the period |
|
- |
|
|
- |
|
|
254,399 |
|
|
(414,099 |
) |
|
(159,700 |
) |
Balance, |
$ |
32,351,440 |
|
$ |
5,471,109 |
|
$ |
1,387,620 |
|
$ |
(33,796,887 |
) |
$ |
5,413,282 |
|
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
|
Notes to Condensed Interim Consolidated Financial Statements |
Three Months Ended |
(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
The going concern assumption is dependent upon the ability of the Company to obtain the following:
|
a. |
Planning permission for the development of an underground mine in Omagh; and |
|
b. |
Securing sufficient financing to fund ongoing operational activity and the development of the underground mine. |
Should the Company be unsuccessful in securing the above, there would be significant uncertainty over the Company's ability to continue as a going concern.
As at
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
The Company entered into an agreement on
As at
On
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
3. Basis of Preparation
Statement of compliance
The Company applies International Financial Reporting Standards ("IFRS") as issued by the
The policies applied in these unaudited condensed interim consolidated financial statements are based on IFRSs issued and outstanding as of
Recent accounting pronouncement
IFRS 9 - Financial Instruments ("IFRS 9") was issued by the IASB in
4. Accounts Receivable and Prepaid Expenses
|
|
As at |
|
|
As at |
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales tax receivable - |
$ |
4,493 |
|
$ |
1,469 |
|
Valued added tax receivable - |
|
12,820 |
|
|
14,894 |
|
Accounts receivable |
|
38,871 |
|
|
35,999 |
|
Prepaid expenses |
|
33,077 |
|
|
49,851 |
|
|
$ |
89,261 |
|
$ |
102,213 |
|
The following is an aged analysis of accounts receivable:
|
|
As at |
|
|
As at |
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Less than 3 months |
$ |
17,313 |
|
$ |
16,363 |
|
3 to 12 months |
|
13,146 |
|
|
11,316 |
|
More than 12 months |
|
25,725 |
|
|
24,683 |
|
Total accounts receivable |
$ |
56,184 |
|
$ |
52,362 |
|
5. Inventories
|
|
As at |
|
|
As at |
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concentrate inventories |
$ |
12,242 |
|
$ |
11,746 |
|
Finished goods |
|
103,587 |
|
|
99,391 |
|
|
$ |
115,829 |
|
$ |
111,137 |
|
6. Property, Plant and Equipment
|
|
Freehold |
|
|
Plant |
|
|
|
|
|
|
|
|
|
|
|
Mine |
|
|
|
|
|
|
land and |
|
|
and |
|
|
Motor |
|
|
Office |
|
|
|
|
|
development |
|
|
|
|
Cost |
|
buildings |
|
|
machinery |
|
|
vehicles |
|
|
equipment |
|
|
Moulds |
|
|
costs |
|
|
Total |
|
Balance, |
$ |
2,949,209 |
|
$ |
5,161,722 |
|
$ |
79,723 |
|
$ |
114,845 |
|
$ |
64,115 |
|
$ |
13,878,530 |
|
$ |
22,248,144 |
|
Additions |
|
2,087 |
|
|
- |
|
|
- |
|
|
2,091 |
|
|
- |
|
|
129,840 |
|
|
134,018 |
|
Disposals |
|
- |
|
|
(131,705 |
) |
|
- |
|
|
(4,724 |
) |
|
(64,115 |
) |
|
- |
|
|
(200,544 |
) |
Transfer |
|
(585,067 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
585,067 |
|
|
- |
|
Foreign exchange adjustment |
|
74,286 |
|
|
129,311 |
|
|
2,009 |
|
|
(920 |
) |
|
- |
|
|
349,581 |
|
|
554,267 |
|
Balance, December 31, 2014 |
|
2,440,515 |
|
|
5,159,328 |
|
|
81,732 |
|
|
111,292 |
|
|
- |
|
|
14,943,018 |
|
|
22,735,885 |
|
Foreign exchange adjustment |
|
103,044 |
|
|
216,658 |
|
|
3,450 |
|
|
4,699 |
|
|
- |
|
|
630,928 |
|
|
958,779 |
|
Balance, March 31, 2015 |
$ |
2,543,559 |
|
$ |
5,375,986 |
|
$ |
85,182 |
|
$ |
115,991 |
|
$ |
- |
|
$ |
15,573,946 |
|
$ |
23,694,664 |
|
|
|
Freehold |
|
|
Plant |
|
|
|
|
|
|
|
|
|
|
|
Mine |
|
|
|
|
|
|
land and |
|
|
and |
|
|
Motor |
|
|
Office |
|
|
|
|
|
development |
|
|
|
|
Accumulated depreciation |
|
buildings |
|
|
machinery |
|
|
vehicles |
|
|
equipment |
|
|
Moulds |
|
|
costs |
|
|
Total |
|
Balance, December 31, 2013 |
$ |
1,364,975 |
|
$ |
4,029,181 |
|
$ |
57,034 |
|
$ |
59,054 |
|
$ |
64,115 |
|
$ |
6,573,466 |
|
$ |
12,147,825 |
|
Depreciation |
|
14,465 |
|
|
211,554 |
|
|
4,520 |
|
|
7,274 |
|
|
- |
|
|
- |
|
|
237,813 |
|
Disposals |
|
- |
|
|
(118,069 |
) |
|
- |
|
|
(3,663 |
) |
|
(64,115 |
) |
|
- |
|
|
(185,847 |
) |
Impairment |
|
558,982 |
|
|
78,812 |
|
|
12,926 |
|
|
24,213 |
|
|
- |
|
|
2,495,269 |
|
|
3,170,202 |
|
Foreign exchange adjustment |
|
30,630 |
|
|
98,907 |
|
|
1,323 |
|
|
(1,675 |
) |
|
- |
|
|
149,252 |
|
|
278,437 |
|
Balance, December 31, 2014 |
|
1,969,052 |
|
|
4,300,385 |
|
|
75,803 |
|
|
85,203 |
|
|
- |
|
|
9,217,987 |
|
|
15,648,430 |
|
Depreciation |
|
6,245 |
|
|
44,647 |
|
|
385 |
|
|
1,016 |
|
|
- |
|
|
- |
|
|
52,293 |
|
Foreign exchange adjustment |
|
92,892 |
|
|
180,541 |
|
|
3,201 |
|
|
3,600 |
|
|
- |
|
|
389,204 |
|
|
669,438 |
|
Balance, March 31, 2015 |
$ |
2,068,189 |
|
$ |
4,525,573 |
|
$ |
79,389 |
|
$ |
89,819 |
|
$ |
- |
|
$ |
9,607,191 |
|
$ |
16,370,161 |
|
|
|
Freehold |
|
|
Plant |
|
|
|
|
|
|
|
|
|
|
|
Mine |
|
|
|
|
|
|
land and |
|
|
and |
|
|
Motor |
|
|
Office |
|
|
|
|
|
development |
|
|
|
|
Carrying value |
|
buildings |
|
|
machinery |
|
|
vehicles |
|
|
equipment |
|
|
Moulds |
|
|
costs |
|
|
Total |
|
Balance, December 31, 2014 |
$ |
471,463 |
|
$ |
858,943 |
|
$ |
5,929 |
|
$ |
26,089 |
|
$ |
- |
|
$ |
5,725,031 |
|
$ |
7,087,455 |
|
Balance, March 31, 2015 |
$ |
475,370 |
|
$ |
850,413 |
|
$ |
5,793 |
|
$ |
26,172 |
|
$ |
- |
|
$ |
5,966,755 |
|
$ |
7,324,503 |
|
7. Exploration and Evaluation Assets
Exploration and evaluation assets are expenditures for the underground mining operations in Omagh. The proposed underground mine is dependent on the ability of the Company to obtain the necessary planning permission.
|
|
Exploration |
|
|
|
and |
|
|
|
evaluation |
|
Cost |
|
assets |
|
|
|
|
|
Balance, December 31, 2013 |
$ |
1,875,771 |
|
Additions |
|
92,872 |
|
Foreign exchange adjustment |
|
102,129 |
|
Balance, December 31, 2014 |
|
2,070,772 |
|
Additions |
|
17,019 |
|
Foreign exchange adjustment |
|
84,897 |
|
Balance, March 31, 2015 |
$ |
2,172,688 |
|
|
|
Exploration |
|
|
|
and |
|
|
|
evaluation |
|
Carrying value |
|
assets |
|
|
|
|
|
Balance, December 31, 2014 |
$ |
2,070,772 |
|
Balance, March 31, 2015 |
$ |
2,172,688 |
|
8. Decommissioning Liability
The Company's decommissioning liability is a result of mining activities at the Omagh mine in
|
|
As at |
|
|
As at |
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Decommissioning liability, beginning of period |
$ |
553,544 |
|
$ |
528,810 |
|
Accretion |
|
2,966 |
|
|
11,489 |
|
Foreign exchange |
|
23,379 |
|
|
13,245 |
|
Decommissioning liability, end of period |
$ |
579,889 |
|
$ |
553,544 |
|
As required by the Crown in
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, amounts payable for financing activities and professional fees activities.
|
|
As at |
|
|
As at |
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Accounts payable |
$ |
279,247 |
|
$ |
306,359 |
|
Accrued liabilities |
|
605,989 |
|
|
562,963 |
|
Total accounts payable and other liabilities |
$ |
885,236 |
|
$ |
869,322 |
|
The following is an aged analysis of the accounts payable and other liabilities:
|
|
As at |
|
|
As at |
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Less than 3 months |
$ |
209,801 |
|
$ |
240,145 |
|
3 to 12 months |
|
169,372 |
|
|
183,164 |
|
12 to 24 months |
|
145,974 |
|
|
120,987 |
|
More than 24 months |
|
360,089 |
|
|
325,026 |
|
Total accounts payable and other liabilities |
$ |
885,236 |
|
$ |
869,322 |
|
10. Share Capital and Reserves
On April 14, 2014, the Company completed the consolidation of its issued and outstanding common shares on the basis of one post-consolidated common shares for five pre-consolidated common shares. As part of the share consolidation all applicable references to the number of shares, warrants and stock options and their exercise price and per share information has been restated.
a) Authorized share capital
At March 31, 2015, 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 March 31, 2015, the issued share capital amounted to $32,351,440. The change in issued share capital for the periods presented is as follows:
|
|
Number of |
|
|
|
|
|
|
common |
|
|
|
|
|
|
shares |
|
|
Amount |
|
|
|
|
|
|
|
|
Balance, December 31, 2013 and March 31, 2014 |
|
51,242,015 |
|
$ |
29,874,693 |
|
|
|
|
|
|
|
|
Balance, December 31, 2014 |
|
76,697,155 |
|
$ |
31,825,575 |
|
Shares issued in private placement (i) |
|
10,599,999 |
|
|
607,062 |
|
Warrants issued (i) |
|
- |
|
|
(32,000 |
) |
Share issue costs |
|
- |
|
|
(49,197 |
) |
Balance, March 31, 2015 |
|
87,297,154 |
|
$ |
32,351,440 |
|
(i) On February 16, 2015, the Company closed a private placement of 10,599,999 common shares at GBP 0.03 ($0.05727) per common share for gross proceeds of GBP 316,667 ($607,062). The common share issued are subject to a four month hold period. Commissions of $36,424 were paid in connection with the placement. The agent also received 636,000 broker warrants. Each broker warrant can be exercised for one common share at an exercise price of GBP 0.045 for a period of 3 years. A four month hold period applies from date of issue of the broker warrant, expiring June 17, 2015.
The fair value of the 636,000 broker warrants was estimated at $32,000 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 168.98%, risk-free interest rate -0.43% and an expected average life of 3 years. As a result of the exercise price of the broker warrants being denominated in a currency other than the functional currency, the broker warrants are considered a derivative financial liability.
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, 2013 and March 31, 2014 |
|
- |
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014 |
|
10,330,000 |
|
$ |
0.18 |
|
Issued (Note 10(b)(i)) |
|
636,000 |
|
|
0.08 |
|
Balance, March 31, 2015 |
|
10,966,000 |
|
$ |
0.18 |
|
|
|
The following table reflects the actual warrants issued and outstanding as of March 31, 2015:
|
|
|
|
|
Grant date |
|
|
Exercise |
|
|
Fair value |
|
|
|
Number |
|
|
fair value |
|
|
price |
|
|
March 31, 2015 |
|
Expiry date |
|
of warrants |
|
|
($) |
|
|
(GBP) |
|
|
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 7, 2016 |
|
10,330,000 |
|
|
383,000 |
|
|
0.10 |
|
|
330,000 |
|
February 16, 2018 |
|
636,000 |
|
|
32,000 |
|
|
0.045 |
|
|
62,000 |
|
|
|
10,966,000 |
|
|
415,000 |
|
|
0.10 |
|
|
392,000 |
|
As a result of the exercise price of the warrants being denominated in a currency other than the functional currency, the warrants are considered a derivative financial liability. The warrants are revalued at each period end with any gain or loss in the fair value being record in the unaudited condensed interim consolidated statements of loss as an unrealized gain or loss on fair value of derivative financial liability.
On March 31, 2015, the fair value of the warrants was estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 157.47% to 165.40%; risk free interest rate of 0.50%; and an expected life of 1.10 years to 2.88 years. As a result, the fair value of the warrants was calculated to be $392,000 and the Company recorded an unrealized gain on fair value of derivative financial liability for the three months ended March 31, 2015 of $8,000.
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, 2013 and March 31, 2014 |
|
940,000 |
|
$ |
0.50 |
|
|
|
|
|
|
|
|
Balance, December 31, 2014 and March 31, 2015 |
|
940,000 |
|
$ |
0.50 |
|
There were no stock-based compensation for the three months ended March 31, 2015 and 2014.
The following table reflects the actual stock options issued and outstanding as of March 31, 2015:
|
|
|
|
|
Weighted average |
|
|
|
|
|
Number of |
|
|
|
|
|
|
|
|
|
remaining |
|
|
Number of |
|
|
options |
|
|
Number of |
|
|
|
Exercise |
|
|
contractual |
|
|
options |
|
|
vested |
|
|
options |
|
Expiry date |
|
price ($) |
|
|
life (years) |
|
|
outstanding |
|
|
(exercisable) |
|
|
unvested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 23, 2015 |
|
0.50 |
|
|
0.65 |
|
|
200,000 |
|
|
200,000 |
|
|
- |
|
January 28, 2016 |
|
0.50 |
|
|
0.83 |
|
|
50,000 |
|
|
50,000 |
|
|
- |
|
September 6, 2016 |
|
0.50 |
|
|
1.43 |
|
|
690,000 |
|
|
690,000 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.50 |
|
|
1.24 |
|
|
940,000 |
|
|
940,000 |
|
|
- |
|
11. Net Loss per Common Share
The calculation of basic and diluted loss per share for the three months ended March 31, 2015 was based on the loss attributable to common shareholders of $414,099 (three months ended March 31, 2014 - $502,100) and the weighted average number of common shares outstanding of 81,747,570 (three months ended March 31, 2014 - 51,242,015) for basic and diluted loss per share. Diluted loss did not include the effect of warrants and options for the three months ended March 31, 2015 and 2014, as they are anti-dilutive.
12. Cost of Sales
|
|
Three Months |
|
|||
|
|
March 31, |
|
|||
|
|
2015 |
|
|
2014 |
|
Production wages |
$ |
24,532 |
|
$ |
40,463 |
|
Oil and fuel |
|
8,799 |
|
|
11,558 |
|
Repairs and servicing |
|
15,167 |
|
|
6,324 |
|
Equipment hire |
|
2,113 |
|
|
319 |
|
Royalties |
|
9,236 |
|
|
8,978 |
|
Other costs |
|
10,150 |
|
|
9,592 |
|
Cost of sales |
$ |
69,997 |
|
$ |
77,234 |
|
13. Related Party Disclosures
Related parties 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 fair value 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 |
|
|||
|
|
|
March 31, |
|
|||
|
Note |
|
2015 |
|
|
2014 |
|
Interest on related party loans |
(i) |
$ |
16,610 |
|
$ |
13,592 |
|
(i) G&F Phelps Limited ("G&F Phelps"), a company controlled by a director of the Company, had amalgamated loans to the Company of $2,482,988 (GBP 1,318,354) (December 31, 2014 - $2,338,872 - GBP 1,294,268) included with due to related parties bearing interest at 2% above
(b) Remuneration of key management of the Company was as follows:
|
|
Three Months |
|
|||
|
|
March 31, |
|
|||
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Salaries and benefits (1) |
$ |
116,288 |
|
$ |
114,798 |
|
(1) Salaries and benefits include director fees. As at March 31, 2015, due to directors for fees amounted to $60,000 (December 31, 2014 - $55,000) and due to key management, mainly for salaries and benefits accrued amounted to $590,691 (GBP 313,630) (December 31, 2014 - $483,998 - GBP 267,831), and is included with due to related parties.
(c) As of March 31, 2015, Kenglo One Limited ("Kenglo") owns 13,222,068 common shares of the Company or approximately 15.15% of the outstanding common shares of the Company. Roland Phelps, Chief Executive Officer and director, owns, directly and indirectly, 21,472,915 common shares of the Company or approximately 24.60% of the outstanding common shares of the Company. The remaining 60.25% 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 owner.
The Company is not aware of any arrangements that may at a subsequent date result in a change in control of the Company.
14. 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 Galántas. 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:
March 31, 2015 |
|
United Kingdom |
|
|
Canada |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Current assets |
$ |
412,229 |
|
$ |
173,625 |
|
$ |
585,854 |
|
Non-current assets |
|
10,001,535 |
|
|
60,676 |
|
|
10,062,211 |
|
Revenues |
$ |
1,123 |
|
$ |
- |
|
$ |
1,123 |
|
December 31, 2014 |
|
United Kingdom |
|
|
Canada |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Current assets |
$ |
208,066 |
|
$ |
25,543 |
|
$ |
233,609 |
|
Non-current assets |
|
9,639,643 |
|
|
60,714 |
|
|
9,700,357 |
|
15. Contingent Liability
During the year ended December 31, 2010, the Company's subsidiary Omagh received a payment demand from Her Majesty's Revenue and Customs in the amount of $573,100 (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. The Company believes this claim is without merit. An appeal has been lodged and the Company's subsidiary Omagh intends to vigorously defend itself against this claim. A hearing date for the appeal has not yet been determined. No provision has been made for the claim in the unaudited condensed interim consolidated financial statements.
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