(Alliance News) - Galantas Gold Corp on Friday said its loss widened in 2019 due to higher expenses as well as an impairment of its troubled Omagh gold mine in Northern Ireland, with the company considering a sale.
The Toronto, Canada-headquartered firm reported a CAD3.6 million pretax loss for 2019, around GP2.1 million, widened from a CAD2.9 million loss the year before.
The company's revenue, consisting entirely of jewellery sales, was CAD5,788 compared to CAD71,243 in 2018. Moreover, general administrative expenses increased to CAD2.7 million from CAD2.1 million while the company swung to a CAD16,659 loss on foreign exchange from a CAD53,417 gain.
On top of which, Galantas incurred a CAD28,479 loss on property, plant and equipment disposal and took a CAD155,482 impairment of exploration and evaluation assets, with no such loss or impairment in 2018.
The impairment resulted from the temporary suspension of blasting operation as its Omagh mine. Blasting operations have been limited as all blasting at Omagh requires supervision by the police service of Northern Ireland.
"Presently the blasting arrangements are not sufficient for the desired level of operations and are not sufficient to allow for the expansion of mine operations as envisaged by the company's existing mine plan. Until changes are agreed, the present inefficiencies caused by these blasting arrangements form an increasing financial burden, which has proved a significant drain on the financial resources of the company," said Galantas.
Although some miner operations are to continue at Omagh, employee numbers have more than halved to 21 from 46.
In March 20202, after UK Covid-19 regulations were introduced, processing at Omagh ceased temporarily until later in May when concentrate processing resumed.
However, given its struggles to obtain approvals for increased blasting protocols, and with no date for receiving necessary approvals as yet, Galantas is weighing its options
"Considering the economic impingement on the company's operations, the company is seeking strategic alternatives including reviewing its licenses and operations; and considering the possibility of engaging in a sale, joint venture, partnership or other options with third parties and alternative financing structures. The company is actively engaged in that process," said Galantas.
Shares in Galantas were down 2.5% at 19.50 pence in London in late morning trading.
By Anna Farley; annafarley@alliancenews.com
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Galantas Gold (GAL)