Galantas Gold Regulatory News (GAL)

GALANTAS GOLD CORPORATION

GALANTAS CLOSES PRIVATE PLACEMENT TO ADVANCE PLANS TO INCREASE GOLD PRODUCTION AND ACCELERATE EXPLORATION, AND ANNOUNCES CHANGES TO BOARD AND MANAGEMENT  

May 18, 2021. Galantas Gold Corporation ("TSX-V: GAL; AIM: GAL) ("Galantas" or the "Company") is pleased to announce the closing of its oversubscribed private placement (the "Placement" or "Financing") previously announced on April 21, 2021, to fund the Galantas Gold Mine in Omagh, Northern Ireland to full production and accelerate exploration plans to expand the high-grade gold resources.

Private Placement

The Placement resulted in the issuance of 26,663,264 units at a price of C$0.30 per "Unit" for aggregate gross proceeds of C$7,998,980. Each Unit comprises one Common Share and one Common Share purchase warrant. Each warrant will be exercisable into one additional Common Share at an exercise price of C$0.40 for 24 months from the closing date of the Placement. There is a 4-month and one day hold period on the trading of securities issued in connection with this Financing.

Eric Sprott, through 2176423 Ontario Ltd., a corporation that is beneficially owned by him, acquired 6,333,333 Units for consideration of C$1,900,000, resulting in the issuance of 6,333,333 Common Shares representing 8.6% of the issued and outstanding shares of the Company on a non-diluted basis. Mr. Sprott is a renowned and respected leader in the investment community and one of the world's premier gold and silver investors.

Michael Gentile acquired 4,000,000 Units for consideration of C$1,200,000, resulting in issuance of 4,000,000 Common Shares representing 5.5% of the Company's issued and outstanding Common Shares on a non-diluted basis. Mr. Gentile is a retired professional money manager with over 20 years' experience investing in the mining and natural resource sector. Currently, Mr. Gentile is an active investor in the junior mining space with significant positions in a number of companies.

Melquart Limited ("Melquart"), a London-based investment firm and an existing shareholder, acquired 2,400,000 Units for consideration of C$720,000, increasing its holdings to 23,073,528 Common Shares representing 31.5% of the Company's issued and outstanding Common Shares on a non-diluted basis (the "Melquart Placing").

Ocean Partners UK Ltd. ("Ocean Partners") acquired 1,666,667 Units of the Private Placement, for consideration of C$500,000 and the Company paid a finder's fee of 41,667 Units to Ocean Partners resulting in the issuance of 1,708,334 Common Shares or 2.3% of the Company's issued and outstanding Common Shares on a non-diluted basis.

Roland Phelps, Galantas' retiring President and Chief Executive Officer, acquired 166,667 Units for consideration of C$50,000, increasing his holding to 5,100,484 Common Shares or 7.0% of the Company's issued and outstanding Common Shares on a non-diluted basis (the "Roland Phelps Placing").

In connection with closing, Roland Phelps has retired as Galantas' President and Chief Executive Officer and as a member of the Board of Directors. His role as CEO has been assumed by Mario Stifano, an experienced mining executive who has raised significant capital for a number of mining and resource companies in exploration, development and production such as Lake Shore Gold Corp. (now part of Pan American Silver Corp.). Mr. Stifano is to join the Board of Directors, subject to regulatory approval.

Mario Stifano commented: "We are thrilled to have closed this Private Placement with the support of such a strong and impressive investor base. We are now eager to ramp up operations and exploration to expand the known resources to depth and on strike, as well as identify new drill targets. I would like to take the opportunity to thank Mr. Phelps for his significant contributions to the Company, and I look forward to working with the Board and the expanded management team to drive value creation for our stakeholders."

The Company has appointed Brendan Morris as Chief Operating Officer in a non-board role. Mr. Morris is a chartered mining engineer with more than 40 years of experience in mining and quarrying in Ireland, United Kingdom, United Arab Emirates and Canada. He has more than 25 years of practical experience in management, in both mining and technical services roles, supplemented by a degree in Mining Engineering and a MSc in Business Practice. He is currently Managing Director of Lisheen Technical and Mining Services, providing consultancy and mining services.

The Board of Galantas has appointed Brent Omland to the Board of Directors, subject to regulatory approval. Mr. Omland is a Canadian Chartered Accountant with 15 years' experience in the mining, metals and trading sectors. He has held roles with Ivernia Inc., Enirgi Metals Group and Teck. He is currently Chief Financial Officer of Ocean Partners.

Ron Alexander has stepped down from the Board following many years of valued service. The Board and management are grateful for his contribution.

Roland Phelps commented: "I am pleased to leave Galantas in good hands. The new capital and leadership will allow the true potential of this exciting property to be realized. I will continue to provide consulting services to management and the Board to ensure a smooth transition."

Offtake Agreement

The existing Offtake Agreement with Ocean Partners has been extended from a minimum total of 50,000 tonnes of concentrate deliveries to a minimum total of 150,000 tonnes and marketed at market rates.

Finder's Fees

In respect of an under-writing by Ocean Partners, the Company paid a commitment fee of CAN$112,500 in cash.

In addition to the finder's fee paid to Ocean Partners in Units, the Company also paid finder's fees of GBP£21,000 and C$398,840 to arm's length parties in cash.

Debt Matters

The maturity date of the Ocean Partners loan due on December 31, 2021 has been extended to December 31, 2023. Interest may be deferred and added to the balance outstanding until March 31, 2022, at which point interest will be paid monthly. The 1,700,000 Ocean Partners warrants currently issued have been extended, subject to regulatory approval, by 24 months to December 31, 2023.

The maturity date of the G&F Phelps Ltd loan (the "G&F Loan") has been extended to December 31, 2023 (the "G&F Loan Extension"). Interest may be deferred and added to the balance outstanding until March 31, 2022, at which point interest will be paid monthly. In consideration for extending the G&F Loan and deferring interest, G&F Phelps Ltd has received, subject to regulatory approval, 1,700,000 warrants exercisable into one common share at an exercise price of C$0.33, with said warrants expiring on December 31, 2023. G&F Phelps Ltd is a company controlled by Mr. Phelps.

An application has been filed for admittance of 26,704,931 additional shares to AIM ("Admission") with Admission expected to occur on or around May 21, 2021. Following Admission, Galantas Gold Corporation's issued and outstanding Common Shares will total 73,270,468.

Related Party Transactions

Roland Phelps and Melquart are deemed to be related parties of the Company by virtue of being a Director and a Substantial Shareholder respectively of the Company (as defined in the AIM Rules for Companies). As a consequence, the Directors of the Company (excluding Mr. Phelps for the purposes of considering the G&F Loan and the Roland Phelps Placing) consider, having consulted with their nominated adviser, Grant Thornton UK LLP, that the terms of the Melquart Placing, the Roland Phelps Placing and the G&F Loan Extension are fair and reasonable insofar as shareholders are concerned. Minority approval is not required under MI 61-101 section 5.7 as at the time the transaction is agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves interested parties, exceeds 25 per cent of the issuer's market capitalization.

Early Warning Disclosure

Eric Sprott, through 2176423 Ontario Ltd., a corporation which is beneficially owned by him, acquired 6,333,333 Units under the Private Placement for total consideration of $1,900,000. As a result of the Private Placement, Mr. Sprott beneficially owns and controls 6,333,333 Common Shares of the Company and 6,333,333 Warrants representing approximately 8.6% of the issued and outstanding Common Shares of the Company on a non-diluted basis and approximately 15.9% on a fully diluted basis assuming exercise of the Warrants. Prior to the Financing, Mr. Sprott did not beneficially own or control any securities of the Company.

The Units were acquired by Mr. Sprott for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities of the Company including on the open market or through private acquisitions or sell securities of the Company including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other factors that Mr. Sprott considers relevant from time to time.

A copy of Sprott's early warning report will appear on Galantas's profile on SEDAR and may also be obtained by calling Mr. Sprott's office at (416) 945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J1).

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.

Information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Enquiries

Galantas Gold Corporation Mario Stifano: Chief Executive Officer

Email: info@galantas.com Website: www.galantas.com Telephone: +44 (0) 2882 241100

Grant Thornton UK LLP (AIM Nomad)

Philip Secrett, Harrison Clarke, George Grainger

Telephone: +44(0)20 7383 5100

Panmure Gordon & Co (AIM Broker & Corporate Adviser)

Nick Lovering, Hugh Rich

Telephone: +44(0)20 7886 2500

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