TSX-V- and Aim-listed Galantas Gold has struck a deal with Ocean Partners UK to advance the Omagh gold project in Northern Ireland, a move the Canadian junior says marks a “turning point” for the high-grade operation.

Under the binding term sheet, Ocean Partners will convert about $14-million in existing debt into an 80% stake in Galantas subsidiaries Flintridge Resources and Omagh Minerals, which together hold the Omagh project.

Galantas will retain a 20% interest in both entities, with the option to convert that stake into a royalty if it chooses.

Ocean Partners will also inject an initial $3-million into the project to fund exploration, restart planning and for administrative expenses during a one-year initial term. Galantas will be free-carried through this phase but may opt to participate pro rata in future capital injections, including a potential $5-million second-phase investment.

“We are very pleased to enter into the proposed transaction with Ocean Partners, a long-standing stakeholder who recognises the district-scale and high-grade potential of the Omagh project,” Galantas CEO Mario Stifano said in a statement.

“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, while also strengthening the company’s balance sheet.”

The deal gives Ocean Partners the option to convert another $1-million in remaining debt into a 0.001% interest in Flintridge after mining restarts.

Upon closing, the joint venture (JV) would kick off a drill programme targeting the Joshua Vein and the northern extension of the Kearney Vein. Both were key zones at Omagh with high-grade potential, Galantas said.

The transaction was subject to shareholder approval and constituted a "fundamental change of business" under the Aim rules, as Galantas was effectively disposing of most of its operational assets. The company said it would remain listed on Aim and would not be classified as a cash shell.

If approved, Galantas will shift its primary focus to its Gairloch project in Scotland, where it plans to initiate a maiden resource estimate and launch a drilling campaign.

The company also said it would maintain its listing on the TSX-V, subject to regulatory approval.

The JV structure gives Ocean Partners four of five board seats at Flintridge, with Galantas holding one seat as long as it maintains at least a 10% stake. The entity will be valued at $15-million for future cash calls.

Galantas has a one-year option to convert its 20% stake into a 3% net smelter return (NSR) royalty, half of which Ocean Partners can buy back for $8-million. If Galantas does not exercise that option and its stake falls below 10%, its interest will automatically convert to a 1.5% NSR royalty, half of which is subject to a $4-million buyback.

The exclusivity period for finalising definitive agreements runs to June 30, unless extended by mutual agreement. The deal also remains subject to standard conditions, including regulatory approvals and final due diligence.

Galantas director Brent Omland is CEO of Ocean Partners and a shareholder and director in its parent company. As such, Ocean Partners is considered a person closely associated with an insider under EU market abuse rules.