Galantas Gold Corporation (LON:GAL)(CVE:GAL) is to issue between 64mln and 80mln new shares to raise a minimum of £3.2mln and a maximum of £4mln.
The money raised will be used for working capital and to achieve full production at Galantas’s Omagh gold mine Ireland, where mining is already underway.
Galantas has set a production target of 30,000 ounces of gold in concentrate per year and expects the new money to complete the equity element of funding required to achieve the target.
Galantas has received a provisional indication from Melquart Ltd, which currently holds 19.2% of the company's shares, to subscribe up to a maximum of £1.4mln.
Roland Phelps, Galantas’s chief executive, intends to exchange shares for debt owed to him in the amount of £500,000 on the same terms as the placing.
Separately, Galantas has received, through an advisor, expressions of interest in the Company's Omagh properties and operations.
The underground gold mine at Omagh has commenced limited production of gold concentrate, from feed produced in development of the Kearney vein.
The first delivery of gold and silver concentrate was made on November 5, 2018.
The processing plant uses a non-toxic flotation process to produce concentrates, without the use of cyanide or mercury. It satisfies strict environmental monitoring criteria set by the Northern Ireland regulatory authorities and has a zero lost time accident record since the start of underground development.