TORONTO: Galantas Gold Corporation (TSX-V & AIM: GAL; OTCQB: GALKF) has signed a binding term sheet with Ocean Partners UK Limited to form a joint venture for the high-grade Omagh Gold Project in County Tyrone, Northern Ireland, the company announced.
Under the agreement, Ocean Partners will exchange approximately $14 million (GBP £10.3 million) in existing loans for an 80% stake in two Galantas subsidiaries that own the Omagh Project. Galantas will retain a 20% interest in each subsidiary. Ocean Partners also has the option to convert an additional $1 million (GBP £738,481) of debt into a 0.001% stake in one of the subsidiaries after mining resumes.
Ocean Partners will invest an initial $3 million (GBP £2.2 million) for exploration, restart planning and administrative costs over the next year. A follow-up option allows an additional $5 million (GBP £3.7 million) investment for further exploration and development. Galantas will not be required to contribute to the initial funding but may participate in future investments.
Mario Stifano, CEO of Galantas, called the deal a “turning point” for the project, citing rising gold prices and the potential to strengthen the company’s financial position. The joint venture plans to begin drilling high-grade zones at the Omagh Project once the transaction closes.
Galantas also continues to advance its Gairloch gold and copper project in Scotland.