28th APRIL 2010 : Galantas Gold Corporation (the Company) has announced annual audited results for the year to December 31st 2009. These demonstrate a positive cash flow for the year of $545,828 and this positive trend continues in the first quarter.
The net loss for the year ended December 31, 2009 amounted to $ 6,361,397 compared to a restated loss of $ 2,452,220 for the year ended December 31, 2008. When the Net Loss is adjusted for non cash items the cash generated from operating activities amounted to $ 545,828 for the year ended December 31, 2009 compared to $ 39,670 for the year ended December 31, 2008.
The primary reason for the increased loss in 2009 is due to an impairment charge totalling $ 5,314,412 on both deferred development and exploration ($ 3,448,716) and property, plant and equipment costs ($1,865,676) during 2009. This impairment of assets is a write down of the Company�s assets as a result of the fair value of the Company�s assets being less than estimated carrying value. This difference between the carrying value and the discounted future cash flow has been recognized as an impairment.
The Company is restating the comparative figures in the current year�s consolidated financial statements to reverse the future tax asset that had been recognized in the prior years.
Highlights of the 2009 annual results, which are expressed in Canadian Dollars, are :
| 2009 | 2008 |
Revenue | $ 5,409,913 | $ 4,402,965 |
Cost of Sales | $ 3,692,087 | $ 3,909,656 |
Amortization | $ 1,666,992 | $ 1,558,679 |
Income (loss) before Other Costs/Income | $ 51,134 | $(1,065,370) |
Impairment of Assets | $ $ 5,314,412 | $ 0 |
Other Costs/(Income) | $1,098,419 | $ 1,386,850 |
Net Income (loss) for the year | $ (6,361,697) | $(2,452,220) |
Net Cash Flow from Operating Activities | $ 545,828 | $ 39,670 |
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.
Production Update for the first quarter 2010.
The Company has received provisional production tonnages for the first quarter (January � March 2010 (Q1) from its wholly owned subsidiary Omagh Minerals Limited (OML). OML operates the only gold mine in Ireland and produces a concentrate containing gold, silver and lead.
January�s production was 137.8 wet tonnes of concentrate. February saw 259.6 wet tonnes of concentrate produced, with March�s production measuring 250.7 wet tonnes, a total of 648.1 wet tonnes for the quarter (599 dry tonnes). Gold production was 42% higher than the same quarter in 2009 and 37% higher than the fourth quarter of 2009.
The metal content of the concentrate remains to be fully assessed, though it is anticipated that shipments for the first quarter contained approximately 66.8 kgs (2146.2 troy ounces) of gold, 211.4 kgs (6796 troy ozs) of silver and 96.9 tonnes of lead. The total gold ounces equivalent (at the first quarter average invoice price) was 2448 troy ozs. The total of invoiced sales for the period is estimated at US$1.77m. The production, metal weights and sales figures are provisional and subject to averaging or umpiring provisions under the concentrate off-take contract with Xstrata Corporation detailed in a press release dated 3rd October 2007. The financial results for the first quarter are expected to be published in the usual timeframe by the end of May 2010.
Further stripping of Kearney vein overburden was carried out and some additional work carried out on Kerr vein stripping. Although both operations, which are the key to increased production, are hampered by lack of working capital, that situation has been helped by improved cash flow from increased sales values. Backfilling of the southern-most section of the Kearney pit, continued in the quarter.
The improvement in cash flows resulting from improved first quarter production has permitted an exploration program to be considered for the coming summer months. Amongst early targets will be strike and depth extensions to the Joshua vein, which geographically runs within 500 metres of the mill.
This disclosure has been reviewed by Nicholas Hardie C.Eng FIMMM, (General Manager), a qualified person under the meaning of N.I 43-101, who is responsible for the production related technical information in this disclosure. Leo O�Shaughnessy is responsible for the financial information. 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 production 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; mining operational risk; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign involvement; speculative nature of gold exploration; dilution; competition; loss of key employees; additional funding requirements; 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.
Galantas Gold Corporation Issued and Outstanding Shares total 190,100,055.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.