Galantas inks JV to revive Omagh gold mine in Ireland

Galantas Gold (TSX-V, LSE-A: GAL) has signed a “turning point” joint venture agreement with Ocean Partners UK to restart underground operations at its Omagh gold project in Northern Ireland. 

Under the binding term sheet released Monday, Ocean Partners will convert about $14 million (C$19.2 million) in existing debt into an 80% stake in Galantas subsidiaries Flintridge Resources and Omagh Minerals. They jointly hold the Omagh asset. Galantas will retain a 20% interest, with the option to convert it into a royalty.

Ocean Partners will also invest an initial $3 million to fund exploration, restart planning and cover administrative costs over a one-year term. Galantas will be free-carried during this stage but may choose to participate pro rata in future funding, including a potential second-stage investment of $5 million.

“This transaction enables Galantas to benefit from renewed production at Omagh while strengthening the company’s balance sheet,” CEO Mario Stifano said in a release. “The proposed transaction represents a turning point in the Omagh project’s development, enabling Galantas to benefit from a recommencement in production amid rising gold prices.”

Omagh, formerly known as the Cavanacaw mine, lies about 110 km west of Belfast, the capital. Operated initially by Omagh Minerals and later by Galantas, open-pit operations produced about 14,540 oz. of gold from 2006 to 2008. Galantas later resumed underground development, with early-stage production beginning in 2018, but the mine has not reached commercial output and remains in development.

Drill program

Shares in Galantas Gold rose 5.3% to close at 10¢ apiece on Monday in Toronto, valuing the company at $10.9 million. 

The joint venture plans to launch a drill program targeting high-grade zones such as the Joshua Vein and testing the northern extension of the Kearney Vein. The agreement allows Ocean Partners to convert an additional $1 million in remaining debt into a 0.001% interest in Flintridge once mining resumes.

The transaction requires shareholder approval and constitutes a “fundamental change of business” under market rules, as Galantas is effectively transferring control of its main operational assets. The company has a one-year option to convert its 20% stake in the Omagh entities into a 3% net smelter return (NSR) royalty. Ocean Partners holds a buyback right for half of that royalty at $8 million. 

If Galantas doesn’t exercise the option and its stake falls below 10%, its interest will automatically convert to a 1.5% NSR royalty, half of which Ocean Partners can repurchase for $4 million. 

Ocean Partners CEO Brent Omland is also a Galantas director and a shareholder and director of Ocean Partners’ parent company, making Ocean Partners a closely associated entity under EU market abuse regulations.

Scottish project  

Galantas will remain listed on the London Stock Exchange’s Alternative Investment Market and will not be classified as a cash shell. The company intends to move its focus to the Gairloch gold-copper project in Scotland, where it plans to initiate a maiden resource estimate and begin drilling.

Omagh’s underground development was paused in 2017 until local police were able to increase availability of anti-terrorism cover. Blasting activities were halted again in the late 2019 mainly because of limitations imposed by the police. Ore production was then suspended in 2020 due to insufficient funds and the impact of the global pandemic.

Gold mining companies operating in Northern Ireland secured an agreement with the government in 2021, granting them free policing linked to the handling of explosives. The move allowed them to speed up sampling and project development.