Shares in Galantas Gold (TSX, LON:GAL) plummeted in London on Tuesday after it announced it had temporarily suspended blasting operations at its Irish gold mine as insufficient supervision has not allowed the company to expand operations as planned.
All blasting in North Ireland must be overseen by police, but the lack of needed supervision have resulted in a financial burden, which had proved a “significant drain” on the company’s financial resources, Galantas said.
The Canadian junior has been working with authorities to increase blasting availability to normal levels for an underground mine.
As a result, the gold miner has started consultations to
reduce employee numbers at its Omagh mine and save costs.
The firm, which kicked off the mine’s expansion in 2017 after the
open-pit site was exhausted, is currently seeking strategic alternatives. Those
include reviewing its licenses and operations, as well as considering a joint
venture or other options with third parties for alternative financing
structures.
“The company expects it will have to raise funds within the
next 6 months and will update the market in due course,” Galantas Gold said.
The Canada-headquartered junior plans to continue with some
operations at Omagh, which Northern Ireland’s only producing gold mine.
Shares in the company closed on Tuesday 47% lower, at 1.92
pence in London. They have fallen 30.5% so far this year and are still almost
20% less than what they were trading at three years ago at 9.75 pence each.
Northern Ireland holds the world’s seventh richest
undeveloped seam of gold, but political violence kept most investors away for
about three decades.