Shares in Galantas Gold Corp (AIM: GAL, TSX-V: GAL, OTCQX: GALKF) are on the move, 170% rises at the time of writing from the previous close of 10.25p in early London trading on Wednesday morning after the company announced an agreement to acquire 100% of the Andacollo Oro gold project in Chile’s Coquimbo region.
Galantas said the share purchase agreement, signed on January 6, is expected to qualify as a fundamental acquisition under TSX Venture Exchange rules.
The past-producing open-pit heap leach operation is located around 55 kilometres southeast of La Serena at an elevation of roughly 1,100 metres and benefits from existing infrastructure, permits and extensive historical technical data. The site is currently non-operational.
Citing a historical report, Galantas said the project produced a total of 1.12 million ounces of gold between 1998 and 2018, with peak annual output of about 135,000 ounces.
The acquisition carries total cash consideration of US$32 million, payable in staged instalments over four years and subject to regulatory approvals. On completion, Galantas expects to deliver US$4.5 million in consideration, including the assumption of around US$3 million in debt and a US$1.5 million payment to Sol de Oro Mining Ltd shareholder Robert Sedgemore. The company also plans to issue 91,313,890 common shares to former project owner Luis Catril, subject to approval.
Chief executive Mario Stifano said the acquisition represents a “clear step-change” in the scale and profile of the company.
Galantas added that a historical mineral resource estimate outlines measured and indicated resources of 2.02 million ounces of gold, with a further 5.06 million ounces classified as inferred. The company stressed these figures are not being treated as current resources or reserves and said it plans to commission an updated NI 43-101 technical report.
