Results For The Quarter Ended March 31, 2024

May 28, 2024: Galantas Gold Corporation (the 'Company') is pleased to announce its unaudited financial results for the Quarter ended March 31, 2024.

Financial Highlights

Highlights of the first quarter 2024 results, which are expressed in Canadian Dollars, are summarized below:

Sales revenue for the quarter ended March 31, 2024 amounted to $ Nil compared to revenue of $ Nil for the quarter ended March 31, 2023. Shipments of concentrate commenced during the third quarter of 2019. Concentrate sales provisional revenues totalled US$ 206,566 for the first quarter of 2024 compared to US $ 255,000 for the first quarter of 2023. Until the mine commences commercial production, the net proceeds from concentrate sales are being offset against development assets.

The Net Loss for the quarter ended March 31, 2024 amounted to $ 653,616 (2023: $ 1,393,614) and the cash outflow from operating activities before changes in non-cash working capital for the quarter ended March 31, 2024 amounted to $495,610 (2023: $475,530).

The Company had a cash balance of $1,288,200 at March 31, 2024 compared to $2,516,822 at March 31, 2023. The working capital deficit at March 31, 2024 amounted to $11,290,856 compared to a working capital deficit of $11,074,990 at March 31, 2023.

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Qualified Person

Galantas Gold Corporation Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian Dollars) (Unaudited)

Going concern (note 1)

Incorporation and nature of operations (note 2)

Contingency (note 17)

Event after the reporting period (note 18)

Galantas Gold Corporation

Condensed Interim Consolidated Statements of Loss

(Expressed in Canadian Dollars)

(Unaudited)

Three Months Ended March 31,

Galantas Gold Corporation

Condensed Interim Consolidated Statements. of Comprehensive Loss

(Expressed in Canadian Dollars)

(Unaudited)

Three Months Ended March 31,

Other comprehensive income

Items that will be reclassified subsequently to profit or loss

Galantas Gold Corporation

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in Canadian Dollars)

(Unaudited)

Three Months Ended March 31,

Galantas Gold Corporation

Condensed Interim Consolidated Statements of Changes in Equity

(Expressed in Canadian Dollars)

(Unaudited)

Reserves

Galantas Gold Corporation Notes to Condensed Interim Consolidated Financial Statements Three Months Ended March 31, 2024 (Expressed in Canadian Dollars) (Unaudited)

Going Concern

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which contemplates that Galantas Gold Corporation (the "Company") will be able to realize assets and discharge liabilities in the normal course of business. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of uncertainties related to events or conditions that may cast doubt on the Company's ability to continue as a going concern. The Company's future viability depends on the consolidated results of the Company's wholly-owned subsidiaries Gairloch Resources Limited ("Gairloch") incorporated on November 16, 2023 and Cavanacaw Corporation ("Cavanacaw"). Cavanacaw has a 100% shareholding in Galántas Irish Gold Limited ("Galántas"), Flintridge Resources Limited ("Flintridge") who are engaged in the acquisition, exploration and development of gold properties, mainly in Omagh, Northern Ireland and Omagh Minerals Limited ("Omagh") who are engaged in the exploration of gold properties, mainly in the Republic of Ireland. The Omagh mine has an open pit mine, which was in production until 2013 when production was suspended and is reported as property, plant and equipment and as an underground mine which having established technical feasibility and commercial viability in December 2018 has resulted in associated exploration and evaluation assets being reclassified as an intangible development asset and reported as property, plant and equipment.

The going concern assumption is dependent on forecast cash flows being met, further financing negotiations being completed together. Management' assumptions in relation to future financing, levels of production, gold prices and mine operating costs are crucial to forecast cash flows being achieved. Should production be significantly delayed, revenues fall short of expectations or operating costs and capital costs increase significantly, there may be insufficient cash flows to sustain day to day operations without seeking further finance.

During the year ended December 31, 2023, the Company raised gross proceeds of $3M through the issuance of shares to investors and $3.5M through the issuance of convertible debentures.

As at March 31, 2024, the Company had a deficit of $79,685,926 (December 31, 2023 - $79,032,310). Comprehensive loss for the three months ended March 31, 2024 was $576,282 (three months ended March 31, 2023 - $940,040). These conditions raise material uncertainties which may cast significant doubt as to whether the Company will be able to continue as a going concern. However, management believes that it will continue as a going concern. However, this is subject to a number of factors including market conditions. These unaudited condensed interim consolidated financial statements do not reflect adjustments to the carrying values of assets and liabilities, the reported expenses and financial position classifications used that would be necessary if the going concern assumption was not appropriate. These adjustments could be material.

Incorporation and Nature of Operations

The Company entered into an agreement on April 17, 2000, approved by shareholders on June 26, 2000, whereby Cavanacaw, a private Ontario corporation, acquired Omagh. Cavanacaw has established an open pit mine to extract the Company's gold deposit near Omagh, Northern Ireland. Cavanacaw also has developed a premium jewellery business founded on the gold produced under the name Galántas. As at July 1, 2007, the Company's Omagh mine began production and in 2013 production was suspended. On April 1, 2014, Galántas amalgamated its jewelry business with Omagh.

On November 16, 2023, Gairloch was incorporated.

Basis of Preparation

Statement of compliance

The policies applied in these unaudited condensed interim consolidated financial statements are based on IFRS issued and outstanding as of May 28, 2024 the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed interim consolidated financial statements as compared with the most recent annual consolidated financial statements as at and for the year ended December 31, 2023. Any subsequent changes to IFRS that are given effect in the Company's annual consolidated financial statements for the year ending December 31, 2024 could result in restatement of these unaudited condensed interim consolidated financial statements.

Accounts Receivable and Prepaid Expenses

Prepaid expenses includes advances for consumables and for construction of the passing bays in the Omagh mine. Prepaid expenses includes also $1,000,000 pursuant to services agreement for the underground development at the Omagh Gold Project.

The following is an aged analysis of receivables:

• Development assets are expenditures for the underground mining operations in Omagh.
• Exploration and Evaluation Assets

Decommissioning Liability

The Company's decommissioning liability is a result of mining activities at the Omagh mine in Northern Ireland. The Company estimated its decommissioning liability at March 31, 2024 based on a risk-free discount rate of 1% (December 31, 2023 - 1%) and an inflation rate of 1.50% (December 31, 2023 - 1.50%). The expected undiscounted future obligations allowing for inflation are GBP 330,000 and based on management's best estimate the decommissioning is expected to occur over the next 5 to 10 years. On March 31, 2024, the estimated fair value of the liability is $624,214 (December 31, 2023 - $611,452). Changes in the provision during the three months ended March 31, 2024 are as follows:

As required by the Crown in Northern Ireland, the Company is required to provide a bond for reclamation related to the Omagh mine in the amount of GBP 300,000 (December 31, 2023 - GBP 300,000), of which GBP 300,000 was funded as of March 31, 2024 (GBP 300,000 was funded as of December 31, 2023) and reported as long-term deposit of $513,420 (December 31, 2023 - $505,110).

Accounts Payable and Other Liabilities

The following is an aged analysis of the accounts payable and other liabilities:

Financing Facilities

Amounts payable on the Company's financial facilities are as follow:

• Convertible Debentures
• On December 20, 2023, the Company closed a $3,502,054 (US$ 2,627,000) convertible debenture. The convertible debenture is unsecured, is for a term of three year commencing on the date that it is issued, carries a coupon of 10% per annum and is convertible into common shares of the Company. Each debenture consists of US$1,000 principal amount of unsecured convertible debentures. The convertible debentures have a term of 36 months from the date of issuance with a conversion price of US$0.255 being the equivalent of a conversion price of $0.35 per conversion share. A four month hold period will apply to common shares converted through the convertible debenture. The hold period will expire on April 21, 2024.

In accordance with the terms of the convertible debentures, if, at any time following the issuance of the convertible debentures, the closing price of the common shares of the Company on the TSXV equals or exceeds $0.70 per common share for 10 consecutive trading days or more, the Company may elect to convert all but not less than all of the outstanding principal amount of the convertible debentures into conversion shares at the conversion price, upon giving the holders of the convertible debentures not less than 30 calendar days advance written notice. On December 20, 2026, any outstanding principal amount of convertible debentures plus any accrued and unpaid interest thereon shall be repaid by the Company in cash.

Interest on the principal amount outstanding under each convertible debenture shall accrue during the period commencing on December 20, 2023 until December 20, 2026 and shall be payable in cash on an annual basis on December 31st of each year (each, an "Interest Payment Date"); provided, however, that the first interest payment date shall be December 31, 2024. Each convertible debenture shall bear interest at a minimum interest rate of 10% per annum (the "Base Interest Rate"). During each interest period (an "Interest Period"), being the period commencing on December 20, 2023 to but excluding the first Interest Payment Date and thereafter the period from and including an Interest Payment Date to but excluding the next Interest Payment Date or other applicable payment date, the Base Interest Rate will be adjusted based on a gold price of US$2,000 per ounce, with the Base Interest Rate being increased by 1% per annum for each US$100 in which the average gold price for such Interest Period exceeds US$2,000 per ounce, up to a maximum interest rate of 30% per annum; provided, however, that, without the prior acceptance of the TSXV, the average interest rate shall not exceed 24% per annum during the term of the convertible debentures. Any adjustment to the Base Interest Rate in respect of an Interest Period shall be calculated based on the average gold price quoted by the London Bullion Market Association, being the LBMA Gold Price PM, in respect of the Interest Period ending on December 31, 2024, from December 20, 2023 to and including December 15, 2024, and for each subsequent Interest Period, from January 1st to and including December 15th of that year or 15 days prior to the applicable payment date.

Melquart, an insider and control person of the Company (as defined by the TSXV), subscribed for US$875,000. Ocean Partners, which has a common director with the Company, acquired US$875,000 aggregate principal amount of convertible debentures.

The Company paid a cash finder's fee of US$40,500 (CAD$53,990) and issued 158,823 non-transferable finder's warrants to Canaccord Genuity Corp. in consideration for providing certain finder services to the Company under the offering. Each finder warrant is exercisable to acquire one common share in the capital of the Company at an exercise price of $0.35 per common share at any time on or before December 20, 2026. The fair value of the 158,823 finder warrants was estimated at $24,670 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 107.02%, risk-free interest rate - 3.71% and an expected average life of 3 years.

On the date of issuance, the fair value of the derivative liability was estimated to be $1,495,208 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 95.0%, risk-free interest rate - 3.94% and an expected average life of 3 years.

As at December 31, 2023, the fair value of the derivative liability was revalued at $1,245,627 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 94.9%, risk-free interest rate - 3.91% and an expected average life of 2.97 years.

On issuance the fair value of the liability component was recorded at $2,006,846, discounted at an effective interest rate of 37%.

The Company incurred transaction costs of $153,481 which was allocated pro-rata on the value of the conversion feature and the liability component.

During the year ended December 31, 2023, the Company recorded accretion expense of $33,265 and interest expense of $29,184 as loan interest and bank charges less deposit interest in the consolidated statement of loss.

As at March 31, 2024, the fair value of the derivative liability was revalued at $830,639 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 95%, risk-free interest rate - 4.20% and an expected average life of 2.72 years.

During the three months ended March 31, 2024, the Company recorded accretion expense of $183,024 and interest expense of $88,569 as loan interest and bank charges less deposit interest in the unaudited condensed interim consolidated statement of loss.

• On February 5, 2024, the Company announced that it closed a debt settlement transaction, pursuant to which the Company settled US$2,711,000 of indebtedness owing to Ocean Partners through the issuance of US$2,711,000 aggregate principal amount of unsecured convertible debentures of the Company.

On the date of issuance, the fair value of the derivative liability was estimated to be $748,337 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 95.0%, risk-free interest rate - 4.28% and an expected average life of 2.87 years.

The fair value of the liability component was recorded at $2,918,833, discounted at an effective interest rate of 20%.

As at March 31, 2024, the fair value of the derivative liability was revalued at $639,475 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 95%, risk-free interest rate - 4.20% and an expected average life of 2.72 years.

During the three months ended March 31, 2024, the Company recorded accretion expense of $105,428 and interest expense of $66,306 as loan interest and bank charges less deposit interest in the unaudited condensed interim consolidated statement of loss.

• Share Capital and Reserves
• Authorized share capital

At March 31, 2024, the authorized share capital consisted of an unlimited number of common and preference shares issuable in Series.

The common shares do not have a par value. All issued shares are fully paid.

No preference shares have been issued. The preference shares do not have a par value.

Common shares issued

At March 31, 2024, the issued share capital amounted to $71,699,799. The continuity of issued share capital for the periods presented is as follows:

(i) On March 27, 2023, the Company closed a non-brokered private placement of 8,230,951 units at a price of $0.36 per unit for gross proceeds of $2,963,142. Each unit consists of one common share of the Company and one common share purchase warrant, with each warrant entitling the holder to purchase an additional common share at a price of $0.55 per share until March 27, 2028. The fair value of the 8,230,951 warrants was estimated at $1,284,806 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 126.22%, risk-free interest rate - 2.96% and an expected average life of 5 years.

The Company paid the agents a cash commission equal to $130,966 and issued 237,162 non-transferable broker warrants of the Company. Each broker warrant is exercisable to acquire one common share at an exercise price of $0.36 until March 27, 2025. The fair value of the 237,162 warrants was estimated at $40,175 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield - 0%, expected volatility - 99.18%, risk-free interest rate - 3.61% and an expected average life of 2 years.

Ocean Partners acquired 691,666 units for consideration of $249,000 and Brendan Morris, an officer of the Company, acquired 468,416 units for consideration of $168,630.

Warrant reserve

The following table shows the continuity of warrants for the periods presented:

The following table reflects the actual warrants issued and outstanding as of March 31, 2024:

Stock options

The following table shows the continuity of stock options for the periods presented:

• The portion of the estimated fair value of options granted in the current and prior periods and vested during the three months ended March 31, 2024, amounted to $29,814 (three months ended March 31, 2023 - $183,723). In addition, during the three months ended March 31, 2024, nil options granted in the prior years were cancelled (three months ended March 31, 2023 - 177,500 options cancelled).

The following table reflects the actual stock options issued and outstanding as of March 31, 2024:

Net Loss per Common Share

The calculation of basic and diluted loss per share for the three months ended March 31, 2024 was based on the loss attributable to common shareholders of $653,616 (three months ended March 31, 2023 - $1,393,614) and the weighted average number of common shares outstanding of 114,732,865 (three months ended March 31, 2023 - 103,893,399) for basic and diluted loss per share. Diluted loss did not include the effect of 19,658,904 warrants (three months ended March 31, 2023 - 32,856,013) and 5,777,500 options (three months ended March 31, 2023 - 5,975,000) for the three months ended March 31, 2024, as they are anti-dilutive.

Revenues

Shipments of concentrate under the off-take arrangements commenced during the second quarter of 2019. Concentrate sales provisional revenues during the three months ended March 31, 2024 totalled approximately US$207,000 (CAD$279,897) (three months ended March 31, 2023 - US$255,000 (CAD$419,169). However, until the mine reaches the commencement of commercial production, the net proceeds from concentrate sales will be offset against Development assets.

• Related Party Disclosures
• The Company entered into the following transactions with related parties:

Three Months Ended

March 31,

• Refer to note 15(a)(iv).
• Refer to note 12(b).
• Refer to note 11.
• As at March 31, 2024, the Company owes Ocean Partners $3,422,239 (December 31, 2023 - $5,673,150) which is recorded as due to related parties on the unaudited condensed interim consolidated statement of financial position.

• In February 2024, the loan balance due to Ocean Partner was converted to convertible debentures. Refer to note 11. As at March 31, 2024, balance related to the loan is recorded as other liability on the unaudited condensed interim consolidated statement of financial position is $Nil (December 31, 2023 - $1,187,437).

• Remuneration of officer and directors of the Company was as follows:

Three Months Ended March 31,

• Salaries and benefits include director fees. As at March 31, 2024, due to directors for fees amounted to $105,000 (December 31, 2023 - $140,000) and due to officers, mainly for salaries and benefits accrued amounted to $133,969 (December 31, 2023 - $25,106), and is included with due to related parties.
• As at March 31, 2024, the issued shares of Galantas total 114,535,293. Ross Beaty owns 3,744,747 common shares of the Company or approximately 3.3% of the outstanding common shares. Premier Miton owns 4,848,243 common shares of the Company or approximately 4.2%. Melquart owns, directly and indirectly, 28,140,195 common shares of the Company or approximately 24.6% of the outstanding common shares of the Company. G&F Phelps owns 5,353,818 common shares of the Company or approximately 4.7%. Eric Sprott owns 10,166,667 common shares of the Company or approximately 8.9%. Mike Gentile owns 6,217,222 common shares of the Company or approximately 5.4%.
• Segment Disclosure

Contingency

During the year ended December 31, 2010, the Company's subsidiary Omagh received a payment demand from Her Majesty's Revenue and Customs ("HMRC") in the amount of $520,762 (GBP 304,290) in connection with an aggregate levy arising from the removal of waste rock from the mine site during 2008 and early 2009. Omagh believed this claim to be without merit. An appeal was lodged with the Tax Tribunals Service and the hearing started at the beginning of March 2017 and following a number of adjournments was completed in August 2018. During the year ended December 31, 2019, the Tax Tribunals Service issued their judgement dismissing the appeal by Omagh in respect of the assessments. A provision has now been included in the unaudited condensed interim consolidated financial statements in respect of the aggregates levy plus interest and penalty.

Event After the Reporting Period

On April 29, 2024, the Company granted 3,175,000 stock options to directors, officers, employees and consultants of the Company to purchase common shares at $0.23 per share until April 29, 2029. The options will vest as to one third immediately and one third on each of April 29, 2025 and April 29, 2026.