Interim Management Statement And Quarterly Resu...

GALANTAS GOLD CORPORATION


                       MANAGEMENT DISCUSSION AND ANALYSIS

                       Three months ending March 31, 2008
DATE: 30 May 2008

This document constitutes management's discussion and analysis (MD&A) of the
financial and operational results of Galantas Gold Corporation (the company) for
the three months ended  March 31, 2008.  This MD&A is to be read in conjunction
with the unaudited financial statements for the same period.  The MD&A does not
form part of these unaudited financial statements.  The Company prepares and
files its financial statements in accordance with Canadian Generally Accepted
Accounting Principles (GAAP).  The currency referred to in this document is the
Canadian dollar.  The MD&A is prepared in conformance with National Instrument
51-102F1 and was approved by the Company's Audit Committee on May 29, 2008.
This MD&A is dated May 29, 2008.

FORWARD LOOKING STATEMENTS

The information in the MD&A contains forward looking statements, including
statements about anticipated operating and financial performance.  Such
statements are not guarantees of future performance which is subject to risks
and uncertainties only some of which are within the Company's control, and any
or all of which could cause the Company's performance to be materially different
from what directors may believe.  Given the uncertainties associated with
forward looking statements, readers are cautioned not to place undue reliance on
them.  The Company does not undertake to update any forward looking statements
contained herein.

Enquiries:

Galantas Gold Corporation                              [phone]
Jack Gunter P.Eng  Executive Chairman
Roland Phelps C.Eng  President & CEO

Website: www.galantas.com
Email: [e-mail]

Blomfield Corporate Finance Limited                    [phone]
Nick Harriss

Lewis Charles Securities Limited                       [phone]
Kealan Doyle


OVERVIEW - STRATEGY - DESCRIPTION OF BUSINESS
Galantas Gold Corporation is a producing mineral resource issuer and the first
to acquire planning consent to mine gold in Ireland.  The Company's wholly owned
Ontario holding company, Cavanacaw Corporation, owns all of the shares of two
Northern Ireland companies - Omagh Minerals Limited, owner of prospecting and
mining rights, planning consent plus land, buildings and equipment; and Galantas
Irish Gold Limited, owner of rights to work, market and sell the Company's gold
production as certified Irish gold jewellery.
The Company's strategy to increase shareholder value is to:

   · Increase the production of the open pit mine and processing plant on its
     Kearney deposit,

   · Continue to explore and develop extensions to the Kearney and nearby known
     deposits so as to expand minable reserves and increase gold production in
     stages,

   · Explore its 3 prospecting licences which aggregate 653 square kilometre,
     focusing  on the more than 50 gold targets identified to date, and

   · Promote and expand on a commercial basis the Galantas®Irish gold jewellery
     business now that certified Irish gold from the mine has become available.



Reserves and Resources



References

  1. December, 2005: ACA Howe International Ltd. "Technical Report of the Gold
     Mining and Exploration Interests of the Omagh Gold Project of Galantas Gold
     Corporation in Counties Tyrone and Farmanagh, Northern Ireland" (the "Howe
     Report")

  2. September 22, 2006:  Galantas Gold Corporation Press Release: "Galantas
     Develops Omagh Gold Mine..."

3.   January 22, 2007:  Galantas Gold Corporation Press Release: "Ore Reserve
     and Resource Estimate".


Ore reserves and mineral resources lie within eight veins in a 5 square
kilometre area at the eastern end of the Company's prospecting licence which
encompasses a 20 by 6 kilometre fault-bounded inlier of Precambrian "Daladrian"
rocks.  The deposits sub-outcrop beneath a few meters of glacial and recent
overburden and are open to depth and usually along the strike.  The steeply
dipping Kearney deposit, focus of the initial mine, is some 850 meters long and
an average of 4.3 meters wide.  It has been drilled with 40 diamond drill holes
down to 137 meters and was intersected in one hole at a depth of 300 meters.
Below the average 3 meters of overburden , a 359 meters long section at the
southern end of the deposit had been 88% stripped and channel sampled in detail
in the late 1980's by Rio Tinto (212 meters) and in 1991 by Omagh Minerals
Limited (103 meters).  Results together with drilling data were used in the Howe
Report to calculate reserves and resources.  The calculations have not been
updated with surface sampling and drilling results obtained in 2006 and in 2007.
The Company has completed further exploration and development involving diamond
drilling, results of which will lead to a new estimate of reserves and
resources.  This new estimate and accompanying N143-101 technical report has
been commissioned and is currently being finalized and reviewed.



On the Kearney deposit, which is the initial focus of mine development, the
Company's current resource statement notes: (i) proven ore reserves of 181,480
tonnes at a grade of 7.36 grams of gold per tonne;  (ii) probable ore reserves
of 185,830 tonnes at a grade of 7.68 grams of gold per tonne; plus (iii) an
indicated resource of 1,183,680 tonnes at a grade of 7.02 grams of gold per
tonne.  These reserves and resources were calculated using a cut-off grade of
1.0 gram of gold per tonne and a cut-off width of 0.5 meters.  The reserves lie
within the "Kearney Pit" currently being developed.  The indicated resource
extends from the bottom of the pit presently planned at 37 meters vertical depth
to a depth of 137 meters, below which depth the deposit remains open.  Note that
the reserves and resources outlined above are undergoing review the results of
which, nearing completion, will replace the current resource statement and that
review could affect the quantities and/or grades previously calculated.



Additional to the reserves and resources of the Kearney deposit, the Howe Report
noted indicated and inferred resources in other deposits within the Company's
mining licence.  At a cut of grade and width of 1.0 gram per tonne gold and .0.5
meters, these are:



Indicated     Grade  Contained  Inferred               Contained
Resource      (g/t   Gold       Resources      Grade   Gold
(tonnes)      Au)    (grams Au) (tonnes)      (g/tAu)  (grams Au)

329,820       6.72   2,208.53   135,500        4.68     634,643

The estimate in the Howe Report (re-iterated January 22, 2007, press release)
was carried out to the standards of the Joint Committee of the Australasian
Mining Industry Council Code (JORC).   A reconciliation to the mineral resources
and mineral reserve categories as set out in National Instrument 43-101 was
included in the Howe Report.

The Howe Report describes in section 12 a mining trial on proven reserves that
produced four selectively mined samples aggregating 101.4 tonnes grading an
average of 53.41 grams gold per tonne.  The difference between this and the
reserve grade is attributed to a) selectivity practiced in the mining trial, b)
dilution inbuilt in the original sampling, and c) naturally inhomogeneous gold
distribution.  A body of sampling data is being accumulated in the early stages
of production, prior to determining the sustainable mining grade that the
deposit will support.  Mineralisation is tightly constrained in the sulphide
veins that make up the Kearney and other deposits, making them amenable to
selective mining.  The processing plant has been designed to accept ore grading
up to 20 grams gold per tonne.

Channel sampling of 2 vein segments aggregating 150 meters in the southern part
of the Kearney deposit was completed independently in 2006 to obtain an estimate
of the selective mining grade that could be sustained in that area.  The
results, combined with those from 124 samples taken by the Company, showed a
weighted undiluted average grade, at a cut-off grade of 3.0 grams per tonne
gold, for individual veins of 16.25 grams per tonne gold.  Detail is contained
within the press release dated September 22, 2006.

Exploration Targets

The Howe Report describes 53 targets selected from integration of geological,
geochemical and geophysical data over the Dalradian inlier.  The targets were
grouped on a priority of 1 to 10 to reflect the likelihood of their hosting
additional resources.  Eight veins around Kearney were classified as very high
priority resource augmentation targets with scores of 9 and 10.  These have high
grade channel and/or drill intercepts and have resources and/or reserves.  Eight
veins not drilled, or with lower grades, have scores of 5 to 8.  The remaining
37 targets comprise one scoring 6, six scoring 5, four scoring 4, eleven scoring
2 and seven scoring 1.

Howe considers targets scoring 3 to 8 to represent excellent opportunities for
discoveries.  Howe considered it likely that exploration will add to the
reserves and resources and that veins similar to Kearney may lie undiscovered.
Howe considered that relatively high grades and widths and continuity of the
deposits with known reserves and resources indicate the potential for
underground production in the future.

Initial Mining Project

The project embraces an open pit mine capable of supplying ore to a crushing-
grinding-froth flotation plant.  The plant is designed to produce a gold and
silver rich sulphide flotation concentrate for sale to a commercial smelter.
The plant was commissioned as stated in the press release dated June 26, 2007.
Improvements in terms of production quantity have been made since the end of the
last quarter though concentrate quality remains variable.  Inconsistencies in
terms of production quantity and quality are gradually being reduced.

 The quarter saw continued infrastructure upgrades including addition to access
and haul roads from the pit, installation of the re-grind circuit which is
currently being tested and further channel construction to divert run-off water
away from working places.

Galantas Irish Gold Limited

Galantas Irish Gold successfully launched its product line in 10 Goldsmiths
outlets early in the quarter and also fulfilled an order with Weir's, the
principal retailer in Dublin.  Management is cautiously optimistic that
replenishment orders will be forthcoming and there will an adequate supply of
certified Galantas gold to meet demand.  Management at this point in time is
exploring further distribution and marketing strategies to support and grow the
business within the plan established at the start of the year.  Manufacturing
and distribution systems are operating well.

Management and Staff

Overall management is exercised by two Executive Directors along with a General
Manager who is in charge of operations in Omagh where the mine, plant and
administration employs 27 people.

Key Performance Driver

The achievement of production and cash flow from profitably mining the deposits
at Omagh.

1.2 OVERALL PERFORMANCE
After commencing site preparation in 2005 and completing the major part of plant
construction and site works in 2006, the year of 2007 saw production come
online.  Ramp up challenges in the early stages of production have been
mitigated but a consistent ore supply continues to be the focus of attention.
The pit continues to be the main focus of management with a detailed plan now in
place and being executed vigorously.  Production has become much more stable in
the last few months though there are still intermittent ore supply shortages.

During the quarter a total of 330.4 dry tonnes of concentrate was produced with
year to date production, through May 29, at 652.5 tonnes.

Exploration

Exploration activity slowed in the first quarter due to unfavourable weather
conditions together with the shift in focus to developing the pit.  Activity is
planned for the 3rd and 4th quarters when weather conditions permit and once the
pit is supplying the plant on a more consistent basis.


1.3 FIRST QUARTER FINANCIAL RESULTS

Revenue Recognition and Expenses

Recognition of revenue from the sale of concentrate amounted to $531,658 with
the remaining $90,129 in sales from jewellery for a first quarter total of
$621,787.   Jewellery sales were improved this quarter as the initial shipments
were made to both Goldsmiths and Weir's.  The initial sale to Goldsmiths is not
recognized as revenue but is treated similar to consignment stock;  however all
replenishment orders will be recognized as revenue in the period the shipments
occur.  Sales to Weir's are not considered consignment and are recognized
immediately.  During the quarter there was one (1) concentrate shipment to a
specialist processing plant to supply certified Irish gold.  Further shipments
are expected as replenishment stock will be required for anticipated re-ordering
by retailers.

With costs no longer capitalized but instead fully expensed as incurred the
company reported a loss of $1,145,919 for the quarter.  This was higher than
anticipated due to the continuing shortage of ore from the pit which is being
actively addressed.  However, costs have been kept within plan reflecting
management maintaining tight controls during pit development.  The loss for the
comparative period last year at $171,517 is reflective of the operation not
being in production hence most costs were capitalized.

At March 31, 2008, total assets were $20,649,881, up $335,570 from the year end
mainly due to cash on hand, inventory of concentrate and finished jewellery.
Property, Plant & Equipment dropped slightly reflecting the amortization and
depreciation of this asset.

Cash at the end of the quarter was $219,829 (December 31,  2007 - $21,308).
This increase was due to the increase in production which has generated greater
cash inflows but is also a factor of timing and management expects this number
to fluctuate quarter to quarter as financial obligations come due.  Accounts
receivable totaled $521,823 and is largely unchanged from year end at $578,831,
but does include a receivable from jewellery sales to Weir's.  Inventory at
$1,328,096 is up as concentrate shipments have slowly but steadily improved
during the quarter, also noticeable since the jewellery at year end has been
shipped to fulfil orders at both Goldsmiths and Weir's.  The non-cash item of
future income tax credit of $1,602,917 remains unchanged from year end.

Liabilities at $4,767,792 were up over the prior quarter from $3,373,843 largely
due to continued debt  financing secured from a related party and deferred
revenue.   The debt financing will be retired within terms and suppliers are
appraised of the company's cash position and are being paid as funds are
generated from operations.  Deferred revenue of $464,288 reflects the shipments
from January  through to March and should continue to increase quarter over
quarter as shipments increase.  This does not negatively affect the company's
cash position but is merely a timing issue.

Expenses

Cost of operations was $720,228 compared to $172,194 in the prior year due
primarily to the current period costs no longer capitalized whereas in the prior
period the company was still in the development stage.  Cost of sales remains
higher than revenue due to the fixed nature of those costs in the near term.

  ·  Operating expenses increased substantially to $313,880 compared to $30,262
     as the mill entered into production mid year 2007 while costs this year are no
     longer deferred.  The largest  increase derived from wages of $96,576,
     professional and consultancy fees of $24,220 and insurance of $24,641.

  ·  The foreign exchange loss of $155,811 is an increase from the prior period
     loss of $3,124 and reflects the effect of floating currencies, significantly the
     recent strength of the Canadian dollar.

  ·  Stock based compensation at $131,052 reflects management's decision to
     reward key staff based on company performance over the long term as well as
     $117,613 in stock options granted in previous years that vested during the
     period.

  ·  Bank charges and interest for the year were $44,178 compared to $2,544 the
     year before and are expected to remain at this level until the debt, which was
     acquired for plant & equipment and working capital, is retired.


1.4 RESULTS OF OPERATIONS
The Company's core business is gold mining with the majority of its revenue
derived mainly from the sale of gold, silver and lead concentrates and small
amounts of gold jewellery.  Sales in the jewellery business were higher during
the quarter from initial order placement at Weir's.  Production has improved
steadily during the past few months with a total of 16 containers shipped in the
fourth quarter of 2007, 17 containers shipped in the first quarter of 2008 with
13 subsequent to the first quarter end and another 4 weeks remaining before the
end of the second quarter.  In terms of dry tonnage the fourth quarter of 2007
was 333.3 tonnes, first quarter was 330.4 tonnes and subsequent to quarter end
saw an additional 322.1  tonnes shipped.

1.5 SUMMARY OF QUARTERLY RESULTS
Revenues and net financial results in Canadian dollars for the first quarter of
2008 and for the seven preceding quarters are summarized:

Quarter Ended       Total Revenue       Net Profit          Net Profit
                                       (Loss)              (Loss) per
                                                            share & per
                                                            share diluted
March 31, 2008         621,787         (1,145,919)            (0.01)
December 31, 2007      (63,505)        (1,070,540)             0.00
September 30, 2007     715,080           (788,481)             0.00
June 30, 2007            1,212           (135,118)             0.00
March 31, 2007           1,355           (171,517)             0.00
December 31, 2006       15,363            188,323              0.00
September 30,2006       15,673           (238,654)             0.00
June 30, 2006           11,047           (420,215)             0.00

There were 16 shipments during the quarter to Falconbridge with 1 shipment going
to the specialty refiner for the production of Galantas Irish Gold.  Subsequent
shipments to the end of May 29, 2008 have totaled 13 all directed towards
Falconbridge.  Management anticipates supplying the specialty refiner with
additional shipments during the second quarter to supply Galantas Irish Gold
with additional stock for the manufacture of jewellery.

1.6 LIQUIDITY
As at March 31, 2008 the Company's working capital was in a deficit of
$2,457,154 which compared with a deficit of $1,499,218 at end of the prior year.
As anticipated, this deficit is expected to persist throughout the 2008 but
gradually reduce as cash from operations, both from the sale of concentrates and
jewellery, increases.  Ore supply continues to be a challenge with management
focusing heavily on the development of the pit which is making slow but steady
progress.  Additional working capital may be required in the short term.

To date the company has been able to draw upon additional cash resources from
the President of the company for working capital and finance of plant and
equipment.

1.7 CAPITAL RESOURCES
As at March 31st, 2008, the Company had capital requirements to repay, under
existing agreements with Barclays Lease Finance three financing facilities of
$139,150, $131,488 and $282,855 totaling $553,493.

A term loan of $397,734 (£250,000) for working capital use at an interest rate
of 7.50% was taken from Allied Irish Banks in May 2007, it is repayable over 3
years at a monthly payment of $16,637 (£7,743).

In addition, Welsh Gold plc., a company controlled the President is due
$1,564,536. A portion of the loan, $547,010 (£268,050) is secured with a second
charge against the land in Omagh.  The entire loan bears interest at base rate
plus 2% with no specific terms of repayment.  At March 31, 2008, interest of
$30,290 was accrued and included in accounts payable and accrued liabilities.

The Company also obtained a loan facility from G&F Phelps, a company controlled
by a director of the Company, in the amount of $842,115 (£412,060) for the
financing of mining equipment.  The term loan is for a period of 4.25 years at
4.04% flat with monthly interest payments of $17,464 and is secured by all
equipment owned by the Company's wholly-owned subsidiary  Omagh Minerals.

The company has no further commitments other than employment contracts with its
2 executive directors.

1.8 OFF-BALANCE SHEET ARRANGEMENTS
The Company has no off-balance sheet transactions.

1.9 RELATED PARTY TRANSACTIONS
The Company was charged $16,050 (March 31, 2007 - $6,691) for accounting and
corporate secretarial services by companies associated to the corporate
secretary of the Company.  Accounts payable include $24,227 (December 31, 2007 -
$52,385) owing to these companies.  The services provided are ongoing and
include book-keeping for the Canadian companies.

Directors fees of $9,000 (March 31, 2007 - $6,000) were paid or accrued during
the three months ended March 31, 2008.

Directors fees of $28,750 (2006 - $25,250) were paid or accrued during the
period.

SHARE CAPITAL
The Company is authorized to issue in series an unlimited number of common and
preference shares.  At the end of March 2008, a total of 175,675,855 shares had
been issued.

As of March 31, 2008, a total of 24,404,000 warrants were outstanding with
expiry dates and exercise price noted in the following table:

Number of Warrants    Exercise Price ($)      Expiry Date
    14,000,000               0.32            July 26, 2008
     1,300,000               0.25            July 26, 2008
     5,284,000               0.45          September 2, 2008
     3,820,000               0.32          September 4, 2008

STOCK BASED COMPENSATION
On February 20, 2008, 250,000 stock options were granted to an employee of the
Company to purchase common shares at a price of $0.16 per share until February
20, 2013.  The options vest one-third upon grant, one-third at the first
anniversary and one-third on the second anniversary of grant.  The fair value
attributed to these options was $32,250 and will be expensed on the statement of
loss and credited to the contributed surplus as they vest.  Included in the
stock based compensation for the period ended March 31, 2008 is $13.349 related
to the vested portion of these stock options.

As at the end of March 31, 2008, 10,800,000 options were outstanding, as
follows:

 Exercisable      Number of     Exercise Price   Expiry Date
   Options         Options           (4)
  1,400,000       1,400,000          0.15       April 10, 2008
   250,000         250,000           0.26       July 31, 2008
   200,000         200,000           0.10        May 13, 2010
   333,333         500,000           0.26       June 14, 2011
   166,667         500,000           0.23       June 15, 2012
  2,566,667       7,700,000          0.14    December 24,2012
    83,333         250,000           0.16    February 20,2013


OTHER MD&A REQUIREMENTS

Additional costs with prior year comparison are detailed as follows:

Expense Account           March 2008           March 2007
Accounting & corporate      15,460               5,511
Bank charges & interest     44,178               2,544
Foreign exchange loss      155,811               3,124
Legal & audit               14,607               35,876
Operating expenses         313,880               30,262
Shareholder communication   29,529               60,912
Stock based compensation   131,052               12,740
Transfer agent              2,873                6,124
General Office              13,100               9,664

The increase in Bank charges & interest reflects the increase in debt to finance
the operations needs for capital equipment and working capital. Management
expects these amounts to level off as cash from operations improves with
production.

The variance in the foreign exchange compared to the prior year reflects the
nature of dealing in foreign currency.  The company is paid in US dollars for
the sale of concentrate to Falconbridge and primarily conducts its business in
pounds sterling.  The large increase also is indicative of the increase in
operating activity, giving rise to greater impact of foreign currency
fluctuations.

Operating expenses are primarily represented by wages $96,576, insurance
$26,802, travel $15,863, consultancy $72940, advertising $23,625 and
professional fees $20,546.  The increase in largely due to the jewellery
business now operating on a consistent basis and these costs are expected to
continue going forward.

Stock based compensation reflects the granting of 250,000 share option on
February 20, 2008 and the vesting of options granted in previous years in the
amount of $117,613.

The other expenses show a decline in spending as management is focusing very
heavily on production  related items and requires less professional services.

Changes in Accounting Policies Including Initial Adoption

Effective January 1, 2008, the Company adopted the new recommendations of the
CICA Handbook Section 3031, Inventories.  The "revised inventories" section
brings the CICA standard in line with International Financial Reporting
Standards and allows for the upward revaluation of inventory that was previously
written down to net realizable value due to a change in circumstances.  The
adoption of this standard had no impact on the Company's financial results.

TRENDS AFFECTING THE COMPANY'S BUSINESS
Metal prices remain strong  after the long period of weakness which ended
approximately four  years ago.  The sustained price recovery is attributable
largely to increased metal consumption in the Far East, most notably China and
India, both of which are experiencing raid growth in their economies.  Thus, the
fundamentals of the metal business are once again favourable for capitalizing
new mines and investors have returned to the mineral resource sector.

For junior resource companies like Galantas, there has been selective
enhancement in market valuation and it has been possible to raise money from the
public for mining and exploration ventures.  Careful management of the Company's
cash continues to be the guiding principle for Galantas.

In Northern Ireland, the widely acknowledged political agreement has
consolidated the positive financial effects of peace and stability in the
province.

RISKS AND UNCERTAINTIES
Galantas operates in a sector - early stage mineral production and exploration -
which carries inherent risks only some of which are within management's ability
to reduce or remove.  The main sector risk is always metal price.  The Company's
other business, high value Irish gold jewellery, is dependent upon the mine
consistently being able to supply reliable certified Irish gold.

The Company has assessed the risks surrounding its business.  It has concluded
that most if not all of the risks are standard to the industry and none of them
so profound as to inhibit pursuit of the Company's strategy.  The main risks
identified and considered are:

  1.   Ore Reserves   Tonnage and grade of ore may be lower than anticipated.  The
     Kearney deposit along strike and to depth has been proven within the confines of
     the initial open pit and indicated well beyond.  Nevertheless, the ore is
     variable in detail and it has proved difficult to mine at a consistent grade and
     supply the plant with sufficient ore regularly and this may persist into the
     future.  The Company has commissioned an independent re-assessment of it
     reserves and resources and a report is anticipated in mid 2008.

  2. Mineral Processing   Ore from the Kearney deposit has been subjected to
     metallurgical trial including pilot plant studies in reputable laboratories by
     the Company.  The previous owner, Rio Tinto, did mineralogical and bench scale
     metallurgical studies.  The flow sheet is simple and the equipment in the plant
     is industry standard.  Nevertheless, scale-up to sustainable commercial
     production may introduce unforeseen technical problems.  Efforts to foresee such
     problems and ameliorate them have been made and an internal metallurgical audit
     assisted by independent professionals was carried out in advance of
     commissioning and production.  The study concluded that, "The process selected
     is in accordance with the results of test work and would be expected to produce
     satisfactory results technically but there are mechanical and electrical
     concerns regarding the capability of the facility to maintain a high degree of
     operating time".  A number of modifications to equipment and operating practices
     have been made and have resulted in improvements in comminution section
     throughput.   However, there is continued risk to 2008 cash flow and to the
     capital budget.

  3. Environmental   The project was subject to one of Ireland's lengthiest
     public enquiries whereat its design and operating fundamentals were challenged
     and defended to the satisfaction of the independent assessors and industry
     experts representing regulators and the Company.  In operation, the facilities
     will be subject to self monitoring and strict independent monitoring.  One of
     management's priorities has been to establish and maintain a culture of
     environmental care on the site with the object of preventing accidents.
     Subsequent to quarter end the Company has been advised of a request to appear
     before a court for a spillage that occurred in July 2007 and already reported.
     While the spillage was from drilling activity and the discharge appears to have
     been  a small quantity of ground rock, management is taking this request very
     seriously.  There have been no incidents since the new General Manager took over
     and this case pertains to activity commissioned by Omagh Minerals (a wholly
     owned subsidiary of Galantas Gold Corporation) to a third party and such
     spillage appears to be a breach of contract by the third party.  The Company
     will vigorously defend its practices now in place and commitment to the safe and
     secure environment within which it operates.

  4. Permitting  The Company has comprehensive permission to carry out its
     activities.  Overall consents were granted in 2000 after an exhaustive public
     inquiry and fulfillment of more than 30 pre-conditions which attached to the
     provisional consent granted in 1995.  Remaining consents required - building
     regulations, archaeological supervision of excavation which is mandatory
     throughout Ireland, compliance with IPPC regulations - relate to operating
     procedures and are being addressed with the relevant authorities as the project
     develops.  Nevertheless, as in all jurisdictions, regulatory provisions are
     subject to change and the Company may be faced with additional constraints in
     the future.

  5. Title   The Company owns the land in secure freehold on which the project
     is located.  Precious metal licences and mining licences have been granted to
     the Company by the Crown Estate and renewed as required since the mid - 1990's
     when initially granted.  Licences and Leases are subject in the usual way to
     minimum performance requirements which are set at a level so as not to inhibit
     development.  There is a dialogue ongoing with the Northern Ireland Development
     of Enterprise Trade and Industry (DETI) concerning a licence to extract base
     metals which occur with the gold and silver in the quartz-sulphide veins and
     which may be recovered as a by-product of gold and silver.  The licence if
     applicable may require a fee payable to owners of surface rights.  In the case
     of the Company's planned mine, since the owner is the Company itself, it is
     thought  unlikely that there will be a material impact.

  6. Political   Northern Ireland has achieved a stable political status
     conducive to business as is evidenced by the relatively large amounts of inward
     investment that the province has enjoyed over the past decade.  The mine is well
     removed from areas of potential urban disturbance.

  7. Financial   The risk is that additional funds, if required, may not be
     available.  In spite of recent private placements, the Company still may not
     have sufficient capital to enable the Kearney mine to be brought to full
     production.  The delay in bringing the production up to capacity has  resulted
     in a cash shortage.  Management continues to actively pursue additional working
     capital and has implemented a very aggressive ore extraction program.  Until
     such funds are secured and the mine produces at an increased capacity there is
     the uncertainty of continued operation.

  8. Revenue   The Company has contracted sale of its concentrate to
     Falconbridge.  While the payment terms are specific, there is risk that unit
     income may fall short of forecast.  This could be due to a number of factors
     including failure of the concentrate to be within the specification contracted
     as regards both value elements and penalty elements and failure to produce
     concentrate of consistent quantity.

  9. Currency Fluctuations/Bullion Price   Most of the costs to the company are
     incurred in British Pounds Sterling.  Gold price expressed in Sterling is within
     approximately 15% of 5 year highs and may stay such or remain on a rising trend.
     There is risk that this trend may reverse and reduce Sterling income.  Inflation
     is widely viewed as a threat in the United Kingdom and elsewhere and this is
     cause for concern.  Results are published in Canadian dollars and there is
     therefore a currency risk.  The Company's policy is to not sell forward its
     bullion.

 10. Construction and Development   The project has taken longer to build which
     has increased costs and deferred cash revenue.  This risk is particularly acute
     for a new and relatively small project such as Galantas is building in Northern
     Ireland where there is no mining history.  One is mindful that there has already
     been serious slippage from schedule and it cannot be ruled out that further
     slippage may occur given that there are uncertainties connected with factors
     such as the detail of environmental compliance measures, geological conditions,
     contractor performance, materials availability and actual outturn costs.

 11. Personnel   Notwithstanding the relatively small scale of the Kearney mine, a
     level of expertise is required in the mine, plant and ancillary activities
     including geology and accounting.  With the world experiencing a high level of
     minerals industry activity, the Company foresees difficulties in recruiting
     additional qualified people.  The general shortage of skilled people may well
     prevail for some time to come and the risk is that costs, operations, future
     expansion and indeed excellence may be impacted negatively.

-END-