Galantas Gold Regulatory News (GAL)

GALANTAS GOLD CORPORATION

TSXV & AIM : Symbol GAL

GALANTAS INTERIM RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013

22nd NOVEMBER 2013: Galantas Gold Corporation (the Company) is pleased to announce its interim results for the nine months ended September 30th 2013 and third quarter results for the three months ended September 30th 2013.

Financial Highlights

Highlights of the 2013 third quarter's and first nine months results, which are expressed in Canadian Dollars, are:

The Net Loss for the three months ended September 30, 2013, amounted to CDN$ 363,744 (2012 Q3: Net Loss CDN$ 495,660) and the cash loss from operating activities before changes in non-cash working capital in the third quarter of 2013 amounted to CDN$ 318,599 (2012 Q3:Cash loss CDN$ 289,853). The cash generated from processing low grade material at the Omagh mine was positive on a strict operational basis before the inclusion of administration costs and overheads in the third quarter (Q3), following a reduction in costs.

Sales revenues for the nine months ended September 30, 2013 amounted to CDN$ 1,362,200 (2012: CDN$ 3,783,939) with sales revenues for the three months ended September 30, 2013 amounted to CDN$ 473,668 (Q3 2012: CDN$ 855,813). This reduction in sales revenues is due to the lower level of metal produced and shipped during both periods primarily due to the requirement to process ore from the low grade stockpile at the Omagh mine as a result of difficulties in accessing ore from the open pits. The gold price for the third quarter and first nine months of 2013 was below the price that prevailed in 2012 which has also adversely impacted sales revenues.

Cost of sales for the nine months ended September 30, 2013 amounted to CDN$ 1,347,416 (2012: CDN$ 2,806,197). Cost of sales for the three months ended September 30, 2013 amounted to CDN $ 437,995 (Q3 2012: CDN$ 792,386). There was a decrease in various production costs at the Omagh mine during the third quarter, including production wages reflecting the reduced number of personnel arising from the rationalization programme, Oil and Fuel costs, Repairs and servicing costs, Equipment hire and usage of Consumables which reductions were primarily attributable to the reduced level of open pit mining during both periods when compared with 2012.

The Net Loss for the nine months ended September 30, 2013, amounted to CDN$ 1,161,961 (2012: Net Loss CDN$ 595,315). The cash loss from operating activities before changes in non-cash working capital for the nine months of 2013 amounted to CDN$ (881,526) (2012: Cash loss $ 36,850).

Production

Production for comparative periods are summarized below:

Concentrate production at the Omagh mine during the three and nine months ended September 30, 2013 was significantly below production levels of the corresponding periods of 2012 due primarily to the to the requirement to process lower grade ore from the stockpile as a result of difficulties in accessing ore from the open pits.

The main production focus during the third quarter has been on the processing of ore from the low grade stockpile. Earlier in the year there had been some limited open pit mining on the Kerr vein which ceased later in the first quarter when the pit met its planned design limit. From the second half of 2012 mining from the Kearney pit had become totally restricted as a result of the surplus rock stockpile on the site reaching capacity levels. This surplus rock was due to be transported from the site in 2012 with the Omagh mine having completed construction of public road improvements, at its own cost, to comply with the conditions of the planning consent. However, following a judicial review brought by a private individual on the grounds of procedural failings by Planning Service, the planning consent was quashed with the surplus rock remaining on site. This ongoing limitation will result in future production continuing to be from low grade sources. To generate cash from its operations going forward, the Company continued to improve efficiencies and cut costs during the third quarter.

During the three and nine months ended September 30, 2013 the mill was fed with the lower grade ore and production continued to be hampered by both the ongoing variations in the metallurgy due to the inconsistent grade of ore being milled and the clay content of stocked material. The concentrate gold grade fell during the third quarter and subsequent to September 30, 2013 the gold grade has weakened further. This has resulted in the Company commencing a review regarding the economics of continuing in production. In the meantime, further cost reduction measures are being implemented.

The 2013 production figures and metal contents are provisional and subject to averaging or umpiring provisions under the concentrate off - take agreement detailed in a press release dated October 3, 2007.

Exploration

The major focus of exploration activities in 2012 and the first nine months of 2013 has been the continuation of the successful drilling program. In total, 17,348 metres have been drilled since the program commenced in March 2011 with significant gold intersects being reported.

The drilling programme began in 2011 with the objective of extending the depth and extent of the Joshua vein and providing data for a potential underground operation based upon the Joshua and Kearney veins. During 2011 and 2012 ninety five holes were drilled totaling 16,704 metres . Channel sampling was also carried out, during this period, on the Joshua, Kearney and Kerr vein systems. On Joshua, a total strike length of 213 metres was sampled. On Kerr, an increase in average vein width and gold grade was identified within depth over a 30 metre strike length.

The exploration programme had expanded considerably in 2012 with six drills operational during the first half of the year. The second half of the year saw the number of rigs progressively reduce with one rig, owned by the Company, remaining in operation by the end of 2012. The two principal objectives of the drilling programme were to complete the deeper holes on Kearney in order to gain a more accurate picture of the zone of mineralization for the purpose of the underground mine plan and to extend the strike of Joshua to the north and the south, and begin to target deeper sections of the vein. Drilling continued at a reduced rate in 2013 but this work has now been suspended, pending the availability of cash for further exploration. Following the scale back of drilling in 2013, more time was dedicated to logging remaining drill cores, the sealing off of all accessible drill holes, updating databases and progressing towards a resource estimate using the Micromine geological modelling computer program.

Assay results released to date from both the drilling and channel sampling programme have been encouraging with significant gold intersections being identified. The updated resource estimate (Technical Report July 2013) contains all material data related to the program (with the exception of one hole detailed in a disclosure dated 27th August 2013). Results to date have been positive, in particular the assays from the ten drill holes on Joshua released in January 2013 with thirteen significant mineral intersects. During the quarter Galantas reported positive assay results from the first drill hole completed on the Joshua vein during the third quarter. This drill hole is the second deepest intersect yet drilled on Joshua Vein and averaged 12.4 g/t gold, over a true width of vein of 2.8 metres. The top of the mineralised intersect is estimated to be at a vertical depth of 137.2 metres. The hole was terminated at a down-hole length of 171.8 metres (see press release dated August 27, 2013).

Once additional funding becomes available this drilling programme will continue. Up to a further 1,000 metres of drilling are planned, following up the recently reported gold intersects on the Joshua vein.

During 2012 the Company ACA Howe International Ltd (Howe UK) completed an Interim Resource Estimate to Canadian National Instrument NI 43-101 compliant mineral resource estimate and a Preliminary Economic Assessment for the Omagh Gold Project (see press release dated July 3, 2012) This report, which was based on drilling results and analyses received to June 8, 2012, identified all resources discovered at that date. The Company subsequently filed a complete Technical Report on SEDAR in August 2012. An updated resource estimate was prepared by the Company during the second quarter based on drilling results received to May 5, 2013 (see press release dated June 12, 2013). The drilling program, subsequent to June 2012, was targeted to increase the amount of measured and indicated resources related to the potential development of an underground mine. There has been an 50% increase in resources classified as measured and indicated from a total of 95,300 troy ounces gold (2012) to 142,533 troy ounces gold and a 28% increase in Resources classified as inferred, from 231,000 troy ounces gold (2012) to 295,599 troy ounces gold (2013). The overall increase is 34%. Subsequent to June 30, 2013 Galantas filed an updated Technical Report on SEDAR in July 2013.

Limited exploration outside the mine licence area continued during the first half of 2013. With regards to the seven licenses held in the Republic of Ireland, geochemical soil sampling and geophysical data generated by the Tellus Border Project, a cross border initiative funded by the EU regional development fund, was released earlier in the year. The data revealed the continuation of a trend established on licence OM4 with anomalously high concentrations of gold pathfinder elements. This data has assisted in the design of a field programme which was carried out during the third quarter. Earlier in the year Omagh Minerals were awarded a grant to complete a project which will determine the prospectivity potential of the Tellus border zone as a whole. This research is supported by the EU INTERREG IVA-funded Tellus Border project, a cross border initiative financed by the EU regional development fund. It is based around the new Tellus Border data and the associated fieldwork was carried out during the third quarter. Application has been made for a further two prospecting licenses in the Republic of Ireland which were acknowledged during the quarter and are now awaiting a final decision.

Planning

Discussions continued with the planning services in Northern Ireland during the third quarter of 2013 with regards to the planning application for an underground mine plan and accompanying Environmental Statement which were submitted to the Planning Services in 2012. Consultations with statutory consultees continues to progress, with additional information requested now filed with the Planning Service for consideration by consulteees.

Roland Phelps, President & CEO, Galantas Gold Corporation, commented, "The Company continues to work with Planning Service and consultees to achieve underground planning consent. The Company has been advised by its consultants that the time-line for planning determination will likely now slip into Q1 2014 although the date is undefined because it is in the hands of other parties. Further cost reductions are being made and we look forward to updating shareholders in due course."

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. Some of the production and metal figures are provisional and subject to averaging or umpiring provisions under the concentrate off-take contract with Xstrata Corporation (now Glencore Canada Corporation) detailed in a press release dated 3rd October 2007.

The financial disclosure has been reviewed by Leo O' Shaughnessy (Chief Financial Officer) and other disclosure by Roland Phelps (President & CEO), qualified persons under the meaning of NI. 43-101. The information is based upon financial and other 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 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; 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.

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. Click on, or paste the following link into your web browser, to view the associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/7515T_-2013-11-22.pdf 

Galantas Gold Corporation Issued and Outstanding Shares total 256,210,395.

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.

NOTICE TO READER

The accompanying unaudited condensed interim consolidated financial statements of Galantas Gold Corporation (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors.

Condensed Interim Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

(Unaudited)

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Going concern (note 1)Contingent liability (note 17)Subsequent events (note 18)

Condensed Interim Consolidated Statements of Loss

(Expressed in Canadian Dollars)

(Unaudited

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Condensed Interim Consolidated Statements of Comprehensive Loss

(Expressed in Canadian Dollars)

(Unaudited)

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)

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)

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Notes to Condensed Interim Consolidated Financial Statements

1. Going Concern

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which contemplates that Galantas Gold Corporation (the "Company") will be able to realize assets and discharge liabilities in the normal course of business. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. The Company's future viability depends on the consolidated results of the Company's wholly-owned subsidiary Cavanacaw Corporation ("Cavanacaw"), the ability of the Company to obtain future financing and to recover its investment in Omagh Minerals Limited ("Omagh"). Cavanacaw has a 100% shareholding in Omagh which is engaged in the acquisition, exploration and development of gold properties, mainly in Omagh, Northern Ireland.

As at December 31, 2001, studies performed on Omagh's mineral property confirmed the existence of economically recoverable reserves. As at July 1, 2007, the mineral property was in the production stage and the directors believe that the capitalized development expenditures will be fully recovered by the future operation of the mine. The recoverability of Omagh's capitalized development costs is thus dependent on the ability to secure financing, future profitable production or proceeds from the disposition of the mineral property. While the Company is expending its best efforts in this regard, the outcome of these matters can not be predicted at this time.

As at September 30, 2013, the Company had a deficit of $27,335,667 (December 31, 2012 - $26,173,706). Management is confident that it will be able to secure the required financing to enable the Company to continue as a going concern. However, this is subject to a number of factors including market conditions. 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. Such adjustments could be material.

2. Incorporation and Nature of Operations

The Company was formed on September 20, 1996 under the name Montemor Resources Inc. on the amalgamation of 1169479 Ontario Inc. and Consolidated Deer Creek Resources Limited. The name was changed to European Gold Resources Inc. by articles of amendment dated July 25, 1997. On May 5, 2004, the Company changed its name from European Gold Resources Inc. to Galantas Gold Corporation. The Company was incorporated to explore for and develop mineral resource properties, principally in Europe. In 1997, it purchased all of the shares of Omagh which owns a mineral property in Northern Ireland, including a delineated gold deposit. Omagh obtained full planning and environmental consents necessary to bring its property into production.

The Company entered into an agreement on April 17, 2000, approved by shareholders on June 26, 2000, whereby Cavanacaw, a private Ontario corporation, acquired Omagh. Cavanacaw has established an open pit mine to extract the Company's gold deposit near Omagh. Cavanacaw also has developed a premium jewellery business founded on the gold produced under the name Galántas Irish Gold Limited ("Galántas").

As at July 1, 2007, the Company's Omagh mine began production.

The Company's operations include the consolidated results of Cavanacaw and its wholly-owned subsidiaries Omagh and Galántas.

The Company's common shares are listed on the TSX Venture Exchange and London Stock Exchange AIM under the symbol GAL. The primary office is located at 36 Toronto Street, Suite 1000, Toronto, Ontario, Canada, M5C 2C5.

3. Basis of Preparation

Statement of compliance

The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations issued by the IASB. These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements.

The policies applied in these unaudited condensed interim consolidated financial statements are based on IFRSs issued and outstanding as of November 20, 2013, the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed interim consolidated financial statements as compared with the most recent annual consolidated financial statements as at and for the year ended December 31, 2012. Any subsequent changes to IFRS that are given effect in the Company's annual consolidated financial statements for the year ending December 31, 2013 could result in restatement of these unaudited condensed interim consolidated financial statements.

4. Significant Accounting Policies

Change in accounting policies

(i) IFRS 10 - Consolidated Financial Statements ("IFRS 10") was issued by the IASB in May 2011. IFRS 10 is a new standard which identifies the concept of control as the determining factor in assessing whether an entity should be included in the consolidated financial statements of the parent company. Control is comprised of three elements: power over an investee; exposure to variable returns from an investee; and the ability to use power to affect the reporting entity's returns. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company's unaudited condensed interim consolidated financial statements.

(ii) IFRS 11 - Joint Arrangements ("IFRS 11") was issued by the IASB in May 2011. IFRS 11 is a new standard which focuses on classifying joint arrangements by their rights and obligations rather than their legal form. Entities are classified into two groups: parties having rights to the assets and obligations for the liabilities of an arrangement, and rights to the net assets of an arrangement. Entities in the former case account for assets, liabilities, revenues and expenses in accordance with the arrangement, whereas entities in the latter case account for the arrangement using the equity method. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company's unaudited condensed interim consolidated financial statements.

(iii) IFRS 12 - Disclosure of Interests in Other Entities ("IFRS 12") was issued by the IASB in May 2011. IFRS 12 is a new standard which provides disclosure requirements for entities reporting interests in other entities, including joint arrangements, special purpose vehicles, and off balance sheet vehicles. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company's unaudited condensed interim consolidated financial statements.

(iv) IFRS 13 - Fair Value Measurement is effective for the Company beginning on January 1, 2013, provides the guidance on the measurement of fair value and related disclosures through a fair value hierarchy. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company's unaudited condensed interim consolidated financial statements given the existing asset and liability mix of the Company to which fair value accounting applies.

 (v) IAS 1 - Presentation of Financial Statements was amended by the IASB in June 2011 in order to align the presentation of items in other comprehensive income with United States Generally Accepted Accounting Principles. Items in other comprehensive income will be required to be presented in two categories: items that will be reclassified into profit or loss and those that will not be reclassified. The flexibility to present a statement of comprehensive income as one statement or two separate statements of profit and loss and other comprehensive income remains unchanged. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company's unaudited condensed interim consolidated financial statements.

(vi) IAS 27 - Separate Financial Statements ("IAS 27") was effective for annual periods beginning on or after January 1, 2013, as a result of the issue of the new consolidation suite of standards, IAS 27 has been reissued, as the consolidation guidance will now be included in IFRS 10. IAS 27 will now only prescribe the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company's unaudited condensed interim consolidated financial statements.

(vii) IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine ("IFRIC 20"). On 19 October 2011, the IASB issued IFRIC 20. The interpretation clarifies when production stripping should lead to the recognition of an asset and how that asset should be measured, both initially and in subsequent periods. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company's unaudited condensed interim consolidated financial statements.

Recent accounting pronouncements

(i) IFRS 9 - Financial Instruments ("IFRS 9") was issued by the IASB in October 2010 and will replace IAS 39 -Financial Instruments: Recognition and Measurement ("IAS 39"). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2015. Earlier adoption is permitted. The Company is presently assessing the impact of this pronouncement.

(ii) IAS 32 - Financial Instruments, Presentation ("IAS 32") was effective for annual periods beginning on or after January 1, 2014. IAS 32 was amended to clarify that the right of offset must be available on the current date and cannot be contingent on a future date. Earlier adoption is permitted. The Company is presently assessing the impact of this pronouncement.

5. Cash Position

6. Accounts Receivable and Advances

7. Inventory

8. Property, Plant and Equipment

9. Deferred Development and Exploration Costs

As at September 30, 2013, the Company has recorded an asset retirement obligation in the amount to $415,975 (GBP 250,000) (December 31, 2012 - $404,450 (GBP 250,000)). This is the amount of the bond that is required by the Crown in Northern Ireland. The Company has paid a deposit against this obligation.

10. Accounts Payable and Other Liabilities

11. Convertible Debenture