Shipments of concentrate under the off-take arrangements commenced during the second quarter. However, until the mine reaches the commencement of commercial production, the net proceeds from concentrate sales will be offset against Development assets. A four month plus one day hold period apply to the shares and the shares rank pari passu with the existing shares in issue of the Company.
The net proceeds raised by the placement are intended to be used to implement recently identified optimization initiatives at the Omagh gold mine, including increased mechanization and improved underground infrastructure, as well as for general working capital of the Company.
Subsequent to September 30, Galantas announced a temporary suspension of blasting operations at its Omagh gold mine see press release dated October 29, Presently the blasting arrangements are not sufficient for the desired level of operations. The Company has been working with the authorities to increase blasting availability to normal levels for an underground mine. Progress has been made and substantive investment made in accordance with recommendations, however, the Company is still awaiting final approvals from the authorities in order to be able to implement its increased blasting protocols.
The Company has been waiting for some time for these approvals and although the Company expects to receive the approvals based on previous discussions with the relevant authorities, a date for receipt of the required approvals and therefore the date on which implementation of the increased blasting schedule is not yet known. Accordingly, in order to reduce costs, while some mine operations will continue at the Omagh gold mine, consultation with the workforce is underway regarding a reduction in the numbers employed.
Subsequent to announcement of the temporary suspension of blasting, progress has been made with the authorities and the Company continues to work towards a resolution of the matter. The processing plant, which uses non-toxic flotation processing to provide a concentrate, is expected to continue to operate in the near term and is being fed from underground stock. The mine operates within regulated environmental constraints and has a zero lost time incident record. The Company expects it will have to raise funds within the next six months and will update the market in due course.
During the third quarter of the Omagh gold mine continued limited production of gold concentrate from feed produced in the development of the Kearney vein. Underground development of the decline tunnel continued to be progressed during the third quarter of with further crosscuts allowing access to lower levels of vein development which forms the development necessary to demarcate production panels. On-vein development continued on the second level and the third level continued. The vein on the third was reached early in the second quarter and on vein development has commenced.
Development has continued southwards on the third level with gold grades within the expected range.
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During the quarter the Company reported that the access drive on the fourth level has intersected the Kearney vein ahead of schedule. The intersection shows strongly developed mineralization. The north and south faces of the vein were channel sampled. The average of the two channels was 8. The vein intersection is expected to allow in-vein development both north and south on the fourth level.
Development on the fourth level is anticipated to produce increased feed tonnage to the processing plant, which produces a concentrate sold under an off-take contract. The Company also reported that drivage from the access has been taken northwards, in-vein, for approximately 40 metres.
Mineralisation beyond the first 20 metres is currently excluded from the geological model, due to paucity of data. The mineralization was shown to be persistent and has been followed in an in-vein development. Two channel samples, taken across the face as the drivage was developed at The vein will continue to be followed northwards on the third level and elevates potential for additional mineralisation to be added to the resource model if discovered on the adjacent first , second and fourth levels, which have not yet accessed this area.
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