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19

Irish gold mine set for production

Amongst the string of junior mining companies

Amongst the string of junior mining companies, one that no doubt will appeal in particular to the Irish around the world is Galantas Gold, which is close to bringing its Omagh gold mine to production in Northern Ireland. The company is also unusual in that it plans to work any free gold recovered in its plant into its own design gold jewellery through a wholly-owned subsidiary company.

The Omagh deposit was initially looked at by Rio Tinto, which discarded it as it didn?t meet its size requirements despite having considerable merit. For a junior mining company which can set up the operation at low cost as a relatively small scale, and high grade, gold mining operation, it is proving to be an attractive prospect.

Significantly, the original guiding light for the company, and chairman, is Jack Gunter, formerly in charge of exploration of the project for Rio?s exploration arm, while the President and CEO, Roland Phelps, has also had experience with mining and adding value to gold production through the Gwynfynydd mine in North Wales, and its branded Welsh Gold, in the past.

On Friday, Phelps, said, "The team is close to achieving gold production at Omagh. With a continued exploration program to build resources, we expect to show that Ireland, with its secure licensing regime, is host to a significant gold camp."

The accompanying report went somewhat further saying that the company management expected its process plant to be commissioned within the next month and cash flow from concentrate sales is expected to be achieved in the fourth quarter.

Galantas also reported some further high grade channel samples and core drilling results which add a little more to the project?s viability.

The material to be processed is relatively high grade by today?s standards. Reserves and resources measured and indicated by drilling and trenching on the main Kearney orebody are around 1.5 million tonnes grading over 7 grams per tonne, with good prospect for expansion of reserves at depth and in a number of other already delineated mineralised areas inside the company?s mining concession. The initial deposit to be mined is shallow ? it apparently can be worked by excavators without blasting ? and is small, but ideal for a junior company operation of the type planned. Indeed the company proposes to mine initially to a significantly higher grade than the defined ore tenor by raising the cut-off grade of mined material to help maximise early cashflow and profits.

Phelps is reported to have stated cost of production could be under US$150 per ounce of gold produced from its 52,500 tonne per year concentrator. Output is expected to be around 30,000 ounces per year (with about double that amount of silver). The orebody also contains lead. This production target suggests that the head grade to the concentrator will be in the order of 18-20 grams per tonne in the initial stages, which would have to be achieved through selective mining, although this might seemingly reduce the overall tenor of the remaining reserves.

The main gold/silver/lead sulphide flotation concentrate will be sold to smelters and a small gravity plant will be used to extract the free gold in the ore, with this going to the company?s subsidiary, Galantas Irish Gold which is the jewellery design, manufacturing and marketing unit mentioned above. This free gold will be designed into certified, 18-carat Irish Gold jewellery and marketed directly to retail channels under the Galantas brand. Test marketing of Galantas Irish gold jewellery from gold extracted from bulk sampling was extremely successful.

Galantas has also floated on AIM to give it broader investor access. Its initial listing was on the TSE Venture Exchange.

With Irish expatriates located all around the world, with a major concentration in North America, the company?s dual mining and jewellery design strategy is an interesting one with the prospect of making money both from sales of gold concentrates to the smelters and of gold jewellery to take advantage of some considerable added value for an admittedly small part of its output..

Ireland has always encompassed legends about pots of gold ? maybe Galantas, which means ?elegant thing? in Gaelic ? will provide these ? but for a Canadian registered company rather than for the leprechauns of legend. Much will depend, though on defining further high grade reserves if the mine is to have a reasonable life.