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Agree CP52 - I would say this is a definite over reaction. I very much doubt this is a political move - the Police really could not give a damn about the SP of Galantas, maybe some pressure from the local MP because jobs might go but no need for an RNS to sort this. We have to remember this is NI and we are talking explosives - anywhere else and it would not be an issue, perhaps there was more to the intruders last week than meets the eye.
But what did Galantas expect to happen with an RNS such as today's so shortly after a fundraising that we were all not expecting anyway. It's the way it has been written that is the problem for me.
The company now has 5 levels for stoping - better than was expected - maybe that will carry on for 6,7 or 8 who knows. I doubt even Galantas know, I need to check if the 5th level is now deeper than the original drilling results. I understand the requirement for a JV partner or a direct sale, if the Gold is now deeper and more widespread than thought, at high grades then naturally it costs more to develop the mine. If the number of levels is not known then the final costs for development are not known.
Or maybe none of that is true and 5 levels is the maximum but without the explosives permissions then they can't blast to stope efficiently or at anything like the throughput required.
What we do know is that we are sitting at a market cap of £5m for a company that has gold and a mine - it just needs explosive permissions and maybe some extra cash or a JV. What I certainly do not want to see is either a fund raise at these levels or a JV partner taking 40% at a miserly £2m.
Maybe a bit of clarity will come over the coming weeks.

Not sure I would compare JLP with EAU. EAU is rising because of the hype around a potential purchase and the interest of 2 very large banks to facilitate such a sale as announced in the RNS of 24th Oct. EAU believe they have 15Moz of PGM's in the ground. What it does show though is the increased interest in PGM's which may soon bring Tjiate into play.

EUA RNS - 24th Oct.
The Banks have agreed to work on a success fee basis, so that their motivation is directly linked to a successful completion of an alternative asset transaction superior to those outlined in the announcement of 15 September 2019. The interest from the Banks is originating from the recent palladium acquisitions namely Stillwater for c. US$2bn by Sibanye in 2017 and NAP for approximately CAD$1bn by Impala Platinum earlier this month. The title of the slides for investors prepared by VTB Capital is as follows: "The Last Non Consolidated Palladium Play".

Not the news that we were hoping for.
The blasting was supposed to be a mere formality - a formality that had taken a lot of time and work to get to but a formality. It appears that we are at the same blasting levels as earlier in the year.
The point of raising more money is also very poor. December 2019 was supposed to be the last placing, then we had the recent one - now we have more funding needed. That is just poor financial planning at best.
I see we are at 5 levels now - that is great and shows the extent of the strike at depth. I also understand that that no Gold wants to be missed, but how many levels will we get to, 5,6,7,8?? Each level takes a few months and more money to achieve. Would we have been better staying at 4 or if the plan is sell the mine then by all means carry on but issue a better RNS.
A note to Galantas Management - perception is reality and perception is fueled by marketing. In this area Galantas have a big big fail. The last few RNS's have been drab and give no direction as to where the company is going. They could have "fueled" a much different story - a story of much more gold than originally thought, a story of increased levels at great width's and grades increasing gold reserves, a story of maximising gold recoveries with the increase in gold prices and a story of interest from the major player in a JV or outright purchase. Instead we have had a story of - we are continuing, doing our best, got a few things wrong, need more money but now plan a different strategy.

The last 6 monthly update showed a combined revenue per PGM Oz of £671 and a cost of £320. Since then the revenue per Oz will have increased, not sure on exactly how much since our basket mix is unknown but let's go conservative and say £700 and the costs will have declined through the efficiencies mentioned today and also Windsor increased PGM Oz's and reduced costs due to volumes efficiencies. I think we could look at a combined PGM revenue of £700/Oz and costs at or below £300/Oz. Not quite the £1.4m every month for Hernic but certainly a good £22m plus a year from combined PGM.
Not bad considering Kabwe will dwarf that !!

A good RNS giving longevity of earnings from PGM but also the Chrome option. But look at those earnings of £1.41m for the project for September alone - that is impressive and bodes very well for future results.

The group is against mining in Omagh so they will naturally do what they can to try and make something look bad. They say it was a "ghost town" but one of their pictures shows various vehicles and plant.
If the armed police are still on site then they are lucky to have walked away unharmed.
I am sure that there is another side to this story !!

Seriously !!

Thanks for the reply BringMyReward - the placing in itself is very tight but with the warrants it looks pretty good. CB's approach of sub-contract everything for Star Zinc, whilst having an effect on profits keeps the costs to GLR to the bare minimum. He is doing what he has done at XTR, so he knows how to do it.
It's been a tough few years for GLR and there is no guarantee that 0.4p will not be breached in the short term, personally I shall be adding on or around these prices. Like all I really dislike placings but am glad that this one is finally out of the way - it removes barriers when the license and offtake are announced.

Hi BringMyReward,
Zn Conc or Zn Metal has nothing to do with GLR that is a JLP issue. To begin with it will be Conc and then moving to metal in 2021. I have used the numbers provided by CB for both GLR costs and JLP costs which sound reasonable and then added a 15% smelters premium which pretty standard. I have not worked on a profit share, but as it works out the JLP net profit and GLT net profit will be reasonably similar. Pretty much all of the information is available on costings and CB has stated that the deal will be the standard one used in supplying Ore to smelters so it's not too difficult using all of that to work out a financial model.
In my model I also take into account all of GLR's other overheads to give an EPS and thus my forecast of an SP.
I think I posted the actual numbers a few months ago on the JLP board in terms of costings and potential returns for both companies but since it was on the JLP board not the actual EPS for GLR which has of course changed today with the shares and warrants.
Hope that helps.

Pretty much agree TBTT, the placing itself is not quite enough IMO but the placing plus the warrants is sufficient giving about 683m shares in issue. IMO that is the reason it was structured on a 1:1 basis, once CB has the license and the deal with JLP the SP will be sufficiently higher than the 0.6p for the warrants to be cashed in.
I wouldn't beat yourself up on the timing, it was anytime between Aug and Feb, we never know when suppliers require to be paid, we only know from the balance sheet that it is due.
The future is looking bright from here, just a case of moving ahead with the plan now. With the warrants, a SP of just over 2p gives a mCAP of £15m - an achievable goal.

Hi TBTT,
I have a financial model built of the Zinc supply to GLR and the break even number is about $1,900/Tonne. I would expect this to increase because Sterling is likely to get stronger but it is still a good buffer. I personally think we will see an increase before a decrease - the stocks are still pretty low. But you are right, as with all miners the largest risk / reward is metal prices. The difference in $2,700 & $2,400 to GLR is about $3m so every movement in the price is of importance.

Well there we go - at least it is done now. It does not exactly come as surprise. We could have maybe hoped that it would happen a little later but there was always a risk depending upon when suppliers needed to be paid (see balance sheet).
The timing is not perfect with the SP trading at below where it has in the last few months. I thought the last RNS was to try and increase the SP before a placing but in reality the placing was already in motion.
Large warrants issued which shows that it was not easy to raise the funds and that the money from the warrants will be required, which should not be a problem at the 0.6p price. I see that CB's direct share holding has been diluted so it will be interesting to see if one of his stock purchasing vehicles have "topped up".
So there is the bad news. The good news is that funding was inevitable, most likely through a placing for working capital and at least now the "Gorilla in the room" has gone and we can concentrate on moving forward to the almost as inevitable agreement with Jubilee. On that front a recent RNS from Jubilee pulled the Zinc line forward from the pushed out Q3/Q4 2020 to H1 2020 - only small numbers to begin with, but then again GLR only need small numbers to cover their outgoings and move to cash flow positive.
I still see a £15m market cap within 12 months and then a steadily increasing one as Zinc shipments increase - providing Zinc can stay above $2,350 / Tonne.

Colin jinxed it a bit TBTT when he mentioned fundraising in his RNS. We all know it's very likely but the point of mentioning it was???

Correct RR, the physical cash can be used it’s just that the P&L looks worse until stoping commences.

I wouldn’t disagree either with the context of your post. Once Stoping starts a Kearney then Joshua will be drilled underground at all levels to add additional stoping material in early 2021 I presume. After that is is a case of what can be accessed from the current underground levels and what requires a new access ramp. I doubt that will become clearer until later in 2020/2021. Kearney is larger than expected and I think the general feeling is that the other veins won’t disappoint either.

I suspect CB is trying to get some momentum going over the next few months before a placing. It seems to be his usual strategy and to be fair it does usually translate into a SP hike. I guess time will tell.

Yes that's my thoughts Jonah. Once Zinc starts then we will use it in house since it is needed for that circuit - how much and whether we still sell some is anybodies guess. I cannot recall if it is a by product of the copper circuit. The acid was always in the plan from the purchase but copper seemed to come on board a little later - as far as we mere mortals are concerned of course !! It may have always been a day one plan but not communicated for some unknown reason.

Depends what price has been agreed positive as part of the sale. Sulphuric Acid 98% is about $250 / Tonne so at 100 mtpd is a very nice addition to the revenue but the price we get could be much less than this. Either way it is really just a nice little bonus until we need more of the acid ourselves after about 3 months.

Thank you Gavster.
It does give confidence that Melquart and Milton took up the entirety of the placing - one could argue that they needed to in order to protect their investment but it certainly gives hope that this is the last placing.
I agree with you on the potential for another gold deposit. In addition to the current mine and licence (OM 3 & 9) Gal own 2 other licences OM1 & OM4 as well as a host of exploration licences. Interesting to get your thoughts on possible timescales?
1) 2020 - stoping, efficiency improvements, volume improvements. Some limited underground drilling.
2) 2021 - volume improvements to 30,000 Oz per year, some machinery purchase. Instigate a large drilling plan both overground and underground to increase the resource size. Commence any planning applications for other drill sites.
3) 2022 - Start to move volumes from 30,000 Oz to 50,000 Oz. Continuation of drilling program.
4) 2023 - Commence drilling program at the most promising of the other sites.
5) 2024 - 2026 - As above but with firmed up resources from at least one other site.
6) Sell the company, most likely to Dalradian but of course there will be other interested parties.
Very speculative of course with no real hard data to back it up but it is what I would do to maximise the value of Galantas. Of course an offer could come in at any stage but at the moment that offer might be circa £20m, when the current resource is firmed up (particularly if it gets close to 1.0m Oz) then it would be worth £40-60m. But with another site firmed up and other good potential licences then it starts to move into the bracket of a £70-100m asset.
Still at the moment I would be happy with anything that gives a baseline low of 6p a share and a strong base to move up from !!

I would expect that an agreement has been reached behind the scenes that suits both JLP and GLR and as such CB has proceeded with the mining license. There is no need currently for JLP to rush into signing a formal offtake and it probably looks better from their perspective if GLR have a mining license first. I would expect the mining license RNS in Nov/Dec and the offtake RNS in Q1 next year.
That said there will be plenty of "appetizers" in between mainly in JLP news. I am pretty sure that CB and Leon of JLP will do an interview / podcast later this year when Sable goes live with Copper and CB will use that platform (as he usually does) to talk about the tie up and the upcoming offtake agreement. The SP could well move before then and in fact anytime really as "friends" in the City get a heads up of what is happening.

Hi Gavster - like you I am also a frustrated investor.
Not because of the presentation - this was in April at the UK investor show - have a look at other ones at the show, they are all pretty muted with lots of background noise and people walking in and out.
I, like you, am frustrated with the lack of information. Too many times with AIM companies a placement occurs only for there to be silence in the following 6-8 weeks. It really is quite a poor approach. After a placement that is when communication should be at its highest to give investors confidence. We have seen with this share that there was a steady increase in confidence earlier this year, a bit more communication on this board, some good RNS's about progress and all this has been undone with a poorly communicated placement with a resulting large drop in the SP. Now I am still convinced that once stoping commences that we will look back at this SP and the 5p SP with a smirk on our faces but that does not help us at the moment. With better communication the SP may have remained at the placing price of 4.25p or even higher. What we want to know is:
1) What is the placing money used for?
2) When will the mine be cash flow positive?
3) When will stoping start?
Below is my take on these:
1) The placing money is mainly used for working capital. Plant is generally on hire purchase so no need to spend it on that. The placing back in Dec/Jan was supposed to last - the vein has been shown to be larger than expected (great news and I totally understand that this pushes out the timescales - we do not want to waste gold on any of the levels) - however this also means that cash flow is delayed. Again no problem, but communicate it in a really positive light rather than - we need more money.
2) Because of point 1) above and the fact that development ore is expensive to mine/process and contains very little gold we are still not cash flow positive. Perhaps that time occurs when the final mine shift comes on line. Let's not confuse cashflow with revenue. Revenue is being capitalised, I suspect that was an unplanned & advised by the accountants i.e. if the costs are capitalised then the revenue also has to be capitalised. However, it is still cash in the bank to pay overheads. I think cash flow positive will be the back end of this year.
3) Stoping - some time in Q1 next year but I think now the end of Q1. The mill has been running for a long time so there should not need much if any of a ramp up period. So once stoping commences the quantities processed and the gold recoveries should be very good. That means that by Q2 next year we will have some serious revenues and that has to be closing in on the £3m mark with a further good increase in Q3.
What I would like to see though, rather than guessing, is the plan for both getting to stoping and then the annual earnings forecasts - is that too much to ask !!