Aim- and TSX-V-listed Galantas Gold on Monday announced a private placement of common shares, which should complete the equity element of funding required to achieve its 30 000 oz/y gold concentrate target.
The private placement would be for a minimum of 64-million shares and maximum of 80-million shares, at an issue price of £0.05 (C$0.086) apiece for targeted gross proceeds of between £3.2-million and £4-million, or C$5.1-million and C$6.8-million.
Galantas has already received a provisional indication from Melquart, its 19.2% shareholder, to subscribe for £1.4-million worth of shares, which should see its shareholding in Galantas increase to 25%.
However, under Canadian securities law, Melquart would automatically be considered a ”control person” if it owned 20% or more of Galantas, which then requires that consent is sought of a majority of disinterested shareholders.
Galantas expects to receive the approval from shareholders through a written resolution.
Further, Galantas president and CEO Roland Phelps intends to exchange shares for £500 000 of debt owed to him personally, on the same terms as the private placement. Phelps is considered a “control person” under Canadian regulations, and, therefore, the majority of disinterested shareholders need to give consent to enact such an arrangement.
Galantas also expects the consent by means of written resolution.
The company owns the Omagh gold mine, in Northern Ireland, which has started limited production of gold concentrate from feed produced in development of the underground Kearney vein.