Last checked at 3 Jul 2012 14:00
GALANTAS GOLD CORPORATION
TSXV and AIM: Stock Symbol - 'GAL'
GALANTAS RECEIVES INITIAL DATA FROM NI 43-101 PRELIMINARY ECONOMIC ASSESSMENT
3rd July 2012 : Galantas Gold Corporation (Galantas or the Company) has received information from ACA Howe International Ltd (ACA Howe UK) related to its preparation of an independent National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate and a Preliminary Economic Assessment for Galantas Gold Corporation's Omagh gold deposit in Northern Ireland.
The mine design proposal by Galantas is for a mining rate for the recovery of 50,000 ounces per year of gold in concentrate. Howe regard this target as challenging, and have performed sensitivity analyses, using the same labour cost, for 40,000 ounces per year and 30,000 ounces per year gold in concentrate. A Gold price of $1375/Oz has been used in each case and a USD:GBP exchange rate of 1.60 applied. The study is based upon detailed data available from an internal cost study by Galantas and the quoted Mine Life Revenue is net of Capital and Operating costs. The Capital cost of establishing the underground mine and processing plant is estimated at £16.7m including a 20% contingency.
The results of these studies appear in the table below.
Case Study Output/Yr | Mine Life Revenue Net | IRR | NPV @5% £ | NPV @ 5% USD $ | Mine Life Yrs | Cash Cost Gold in concentrate USD $ per ounce |
50,000 ozs | £80.1 m | 81% | 62.6 m | 100.2 m | 5 | 500 $ |
40,000 ozs | £75.4 m | 69% | 57.3m | 91.6 m | 6 | 538 $ |
30,000 ozs | £71.3 m | 54% | 51.2 m | 82.0 m | 8 | 600 $ |
For the purposes of this preliminary economic assessment, the Mine Life stated in each case has been calculated using the sum of measured, indicated and inferred resources on the Joshua and Kearney veins only from the Howe study, inferred resource making up some 70% of the total. In conformance with NI 43-101, section 2.3, it should be noted that this economic assessment is preliminary in nature, that it includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized.
Drilling continues and that is designed to improve technical information concerning the inferred resource (and other resources) used in the study, particularly those relating to the Joshua and Kearney veins, where inferred resources based upon downward, less drilled extensions to the veins have been used for a calculation of mine life. A further assessment is expected to be made when that information is received.
Nigel Pearson B.Sc., C.Eng., FIMM, is the Qualified Persons for the Preliminary Economic Assessment component of the NI43-101 Report on the Resource Estimate of the Omagh Deposit and has reviewed and approved the contents of this press release.
The resource estimate is based on drilling results received up to 8th June 2012, which are part of a continuing drilling programme. The following table summarises the block model estimate:
ZONE | CATEGORY | CUT-OFF 2.5 g/t Au | ||
TONNES | Grade (Au g/t) | Au ozs | ||
KEARNEY | INDICATED | 270,900 | 7.94 | 69,000 |
KEARNEY | INFERRED | 490,000 | 8.54 | 135,000 |
JOSHUA | MEASURED | 13,000 | 6.48 | 2,800 |
JOSHUA | INDICATED | 66,800 | 6.27 | 13,000 |
JOSHUA | INFERRED | 173,000 | 8.48 | 47,000 |
ELKINS | INDICATED | 68,500 | 4.24 | 9,000 |
ELKINS | INFERRED | 20,000 | 5.84 | 3,800 |
KERR | MEASURED | 2,250 | 6.75 | 500 |
KERR | INDICATED | 5,400 | 5.03 | 900 |
KERR | INFERRED | 26,000 | 4.58 | 4,000 |
GORMLEYS | INFERRED | 75,000 | 8.78 | 21,000 |
GARRY'S | INFERRED | 0 | 0.00 | 0 |
PRINCES | INFERRED | 10,000 | 38.11 | 13,000 |
SAMMY'S | INFERRED | 27,000 | 6.07 | 5,000 |
KEARNEY NORTH | INFERRED | 18,000 | 3.47 | 2,000 |
TOTAL | MEASURED | 15,250 | 6.52 | 3,300 |
INDICATED | 411,600 | 7.01 | 92,000 | |
INFERRED | 839,000 | 8.53 | 231,000 | |
Note: (1) Rounded numbers, gold grades capped at 75g/t. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
ACA Howe UK has supervised the drilling and sampling program on an intermittent basis in order to maintain a necessary level of confidence and enable preparation of an NI 43-101 compliant resource estimate.
The database used by ACA Howe for the resource estimate contains 9,740 assay results from 255 surface diamond drill holes (total of 26,379 metres) and 494 channels. Fifty two drill holes were completed in 2011 and 2012. Samples were assayed by fire assay with atomic absorption finish using 30 gram charges at OMAC Laboratories, Ireland (now ALS). A Micromine block model with sub-block cell dimensions of 1.5 metres (X), 0.5 metres (Y), 0.5 metres (Z) was coded to reflect surface topography and geology, A total of 45 individual vein domains were identified, including 22 at the Kearney Zone and 6 at the Joshua Zone. Gold grades were estimated from 0.3 metre length-weighted composites into the interpreted mineralized blocks. The estimates were calculated using Inverse Distance Squared and Cubed (ID2 and ID3) using parameters established from analysis of the variography within each domain. Based on the variographic analysis, search ellipses were created to enable a four-pass approach to interpolate gold grades into the blocks. A density factor of 2.984 grams/cc was assigned to all mineralized veins except Elkins, for which a density factor of 3.636 was used, based on measurements of specific gravity performed by Galantas. For resource classification, 4 trenches or drill holes with 4 composites were required within the search ellipsoid for measured class, 2 drill holes with 3 composites were required for indicated, the remainder being inferred.
Richard Parker, B.Sc., C.Eng, MIMMM. is the Qualified Persons for the NI43-101 Report on the Resource Estimate of the Omagh Deposit and has reviewed and approved the contents of this press release.
The Company intends to file a complete Technical Report on SEDAR within 45 days of this release, as required by NI 43-101.
Roland Phelps, President & CEO, Galantas Gold Corporation commented, "The Preliminary Economic Assessment, which shows high Internal Rates of Return and low cash cost of production, in a politically stable jurisdiction, confirms our confidence in the Omagh property. We expect to continue to further invest in drilling and infra-structure, moving to a more detailed feasibility with the goal of establishing an underground operation around a target production of 50,000 ounces per year of gold in concentrate.
Discussions have already been initiated with potential lenders to gauge interest in financing opportunities based on debt, with encouraging results.
A further report is scheduled after the 15,000 metre drilling program is complete. Our permitting application for an underground mine, with accompanying Environmental Impact assessment, is now complete and expected to be filed in the week commencing 2nd July 2012."
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 drilling intersections and analyses, 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 , including: gold price volatility; discrepancies between actual and estimated production, actual and estimated metal grades and geologically interpreted widths, actual and estimated metallurgical recoveries; actual and estimated costs; 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 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.
Enquiries
Galantas Gold CorporationJack Gunter P.Eng - Chairman Head of Investor RelationsRoland Phelps C.Eng - President & CEO Courtenay Heading (Maclir Consulting Ltd)Email: info@galantas.com Email : c.heading@Galantas.comWebsite: www.galantas.com Telephone : (UK) +44 (0) 7624 424 455Telephone: +44 (0) 2882 241100
Charles Stanley Securities (Nominated Adviser)
Mark Taylor : Telephone +44 (0)20 7149 6000