Corporate Governance, Committees of the Board of Directors and their responsibilities
The Company complies with the corporate governance regime of Canada, being its country of incorporation, which are embodied under Canadian National Instrument / Policy 58-201 and 101.
The Company's main country of operation is Northern Ireland. In addition, the directors acknowledge the importance of the Combined Code. They therefore intend to comply with the Combined Code so far as is appropriate having regard to the size and nature of the Company.
Board of Directors
Roisin Magee is the Chairman of the Board. The Board facilitates its exercise of independent supervision over management by ensuring that a majority of the members of the Board are independent within the meaning of NI 52-110. Under NI 52-110, a director is considered to be independent if, among other things, the director does not have a relationship with the Company which could, in the view of the Board, be reasonably expected to interfere with the exercise of such director’s independent judgment in his or her capacity as director. At present, the Board is composed of five directors, being Messrs. Stifano, Cather, Clancy, and Omland, and Ms Magee, of which Messrs. Clancy, Cather, Alexander and Ms Magee are considered to be independent according to the definition of independence set out in NI 52-110. Mr. Stifano is not considered to be independent as he is an Executive Officer and member of the management of the Company.
The Board is responsible for approving long-term strategic plans, annual operating plans, budgets, material contracts and business transactions, strategic planning, acquisitions, and financings.
Each of the directors of the Company holds the following directorships of reporting issuers (or the equivalent in a foreign jurisdiction) other than the Company(1):
Dore Copper Mining Corp., Lupaka Gold Corp., Bell Copper Corp.
Mega Precious Metals Inc.
Dore Copper Mining Corp.
Masivo Silver Corp.
Royal Standards Minerals Corp.
Fengro Industries Corp.
Avocet Mining plc
(1) The information as to current and previous directorships is not within the knowledge of the Management and has been furnished by the respective directors. (June 2021)
Orientation and Continuing Education
The Company currently does not have any orientation or continuing education plans in place to orient new members of the Board. However, new directors are invited and encouraged to meet with established directors as well as the Company’s legal counsel in order to better understand their role and responsibilities as a director of the Company. New directors are also provided with a complete set of the Company’s mandates and policies.
Ethical Business Conduct
In fulfilling its mandate and approving various decisions put forth by Management, the Board ensures that the measures Management takes comply with securities regulations and other applicable laws. Members of the Board are also aware of their fiduciary role to the Company as well as their individual fiduciary duties in their role as directors, all of which are set out in the applicable federal corporate legislation. In exercising their powers and discharging their duties, the Board is required to act honestly and in good faith with a view to the best interests of the Company, and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. There is personal and regular interface with management as to progress, schedule and future planning. Furthermore, there is dual control of the Company’s finances and periodic and regular review. Management at Board meetings regularly briefs the Board of Directors on the current and planned operations of the Company.
Nomination of Directors
As the Company’s business evolves and expands, the Company may be required to change the size or composition of the board of directors to reflect different depths or areas of expertise of the members of the board of directors. From time to time new directors may be added in order to ensure that the Company continues to implement best practices and that the Company has access to the expertise required to run its operations in the most efficient manner possible. In addition, the Company will be required to replace existing directors from time to time. Currently, new candidates for the board of directors are identified by management and considered by the Corporate Governance and Nomination Committee of the Board, which then recommends candidates for consideration by the Board, in each case, having regard to the needs of the Company at the relevant time.
An audit committee comprising three or more directors, to be designated from time to time by the board, one of whom shall be designated as chair. Messrs Clancy and Omland, and Ms. Magee sit on the Audit committee and Mr. James Clancy is appointed as Chair.
The duties of the audit committee include (inter alia) the monitoring and assessment of the relationship between the management of the Company and the external auditors, and monitor and support the independence and objectivity of the external auditors.
The compensation committee, comprising of Mr. Cather, Mr. Omland and Ms. Magee, and chaired by Mr. Cather, is appointed by the Board to assist the Board in setting director and senior officer compensation and to develop and submit to the Board recommendations with respect to such other employee benefits as considered advisable. The compensation committee will be guided by the following principles:
- to offer competitive compensation to attract, retain and motivate qualified executives in order for the Company to achieve the strategic plan and budget approved by the Board from time to time; and
- to act in the best interests of the Company by being financially responsible.
Corporate Governance and Nomination Committee
The corporate governance and nomination committee is responsible for reviewing the Company's compliance requirements. The committee comprises of Ms. Magee, Mr. Omland and Mr. Clancy, and is chaired by Ms. Magee.
Technical, Health, Safety and Environment Committee
The technical, health, safety and environment committee comprises of Mr. Cather, Mr. Clancy and Mr. Stifano, and is chaired by Mr. Cather.
Assessment of the Board of Directors, the Audit Committee and Directors
The Company does not currently have any formal procedures in place to assess the performance of the whole Board, the Audit Committee or the directors on an individual basis. However, informal discussion among the members of the Board and management serves to monitor the evaluation of each director’s contribution to the Board and, in the case of James Clancy, Brent Omland and Roisin Magee, to the Audit Committee, and in the case of James Clancy, David Cather and Roisin Magee, to the Compensation and Corporate Governance Committee.
Composition of the Audit Committee and Relevant Education and Experience
The Audit Committee is required to have a minimum number of three members (the “Members”), all of whom must be directors of the Company. The Audit Committee is currently composed of the following individuals: James Clancy, Brent Omland and Roisin Magee. James Clancy is currently the Chair of the Audit Committee.
All of the Members are considered to be independent within the meaning of NI 52-110. In general terms, a Member is considered independent if they have no direct or indirect relationship with the Company which could, in the view of the Board, be reasonably expected to interfere with the exercise of the Member’s independent judgment. Furthermore, all Members are financially literate in that they have the ability to read and understand a set of financial statements that are of the same breadth and level of complexity of accounting issues that are generally comparable to the breadth and level of complexity of the issues that can be reasonably expected to be raised by the Company’s financial statements. Mr. Clancy is a Chartered Accountant and has been an independent financial consultant since 1999, during which period Mr. Clancy has gained experience in understanding internal controls and procedures for financial reporting and in preparing, analyzing and evaluating financial statements that are of the same breadth and level of complexity of accounting issues that are generally comparable to the breadth and level of complexity of the issues that can be reasonably expected to be raised by the Company’s financial statements.
Audit Committee Oversight
At no time during the last financial year did the Company disregard a recommendation put forth by the Audit Committee with respect to the nomination or compensation of an external auditor.
Reliance on Certain Exemptions
At no time since the commencement of the Company’s most recently completed financial year (2019) has the Company relied on the exemption contained in section 2.4 of NI 52-110 (De Minimis Non-Audit Services) with respect to the pre-approval of non-audit services by the Audit Committee, nor has the Company had to request any type of exemption from the securities regulatory authorities with respect to disclosure concerning the Company’s Audit Committee, such exemptions being granted under Part 8 of MI 52-110 (Discretionary Exemption of Securities Regulatory Authority or Regulator).
Pre-Approval Policies and Procedures for Non-Audit Services
The Audit Committee is responsible for pre-approving all non-audit services to be provided by the external auditor to the Company other than de minimis non-audit services referred to in section 2.4 of NI 52-110. In particular, the Chair of the Audit Committee is authorized to approve any non-audit services. The Audit Committee also reviews fees paid by the Company to the external auditors and other professionals in respect of audit and non-audit services on an annual basis. Furthermore, the Audit Committee is required to evaluate the independence and objectivity of the external auditors. The Audit Committee also has the authority to engage independent legal counsel and other advisors as it determines necessary to carry out its duties and responsibilities. The Chair of the Audit Committee is authorized to approve any non-audit services.
External Auditor Service Fees (by category)
The aggregate fees billed by the Company’s external auditors during the last two fiscal years are set out in the table below. “Audit Fees” refer to the aggregate fees billed by the external auditor for audit fees. “Audit-Related Fees” refer to the aggregate fees for assurance and related services billed by the external auditor that are reasonably related to the performance of the audit or review of the Company’s financial statements and not reported under Audit Fees. “Tax Fees” refer to the aggregate fees for professional services rendered by the external auditor for tax compliance, tax advice, and tax planning. “All Other Fees” include all fees billed by the external auditors for services not covered in the other three categories.
Financial Year Ending
Audit Related Fees
All Other Fees
(1) “Tax Fees” include fees for professional services rendered by the external auditor for tax compliance, tax advice, and tax planning.
(2) “All Other Fees” for are for an administration fee for the Canadian Public Accountability Board.
Reliance on Exemption in Section 6.1 of NI 52-110
The Company is relying upon the exemption in Section 6.1 of NI 52-110 for issuers on the TSX Venture Exchange which allows for an exemption from Parts 3 (Composition of the Audit Committee) and 5 (Reporting Obligations) of NI 52-110 and allows for the short form of disclosure of audit committee procedures set out in Form 52-110F2.
CODE OF BUSINESS CONDUCT AND ETHICS
The Code of Business Conduct and Ethics is intended to document the principles of conduct and ethics to be followed by the employees, officers, and directors of Galantas Gold Corporation and its subsidiaries.
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF GALANTAS GOLD CORPORATION (the “Company”)
The Audit Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of the Company.
The Committee has the authority to conduct any investigation appropriate to its responsibilities, and it may request the external auditors as well as any officer of the Company, or outside counsel for the Company, to attend a meeting of the Committee or to meet with any members of, or advisors to, the Committee. The Committee shall have unrestricted access to the books and records of the Company and has the authority to retain, at the expense of the Company, special legal, accounting, or other consultants or experts to assist in the performance of the Committee’s duties.
The Committee shall review and assess the adequacy of this Charter annually and submit any proposed revisions to the Board for approval.
In fulfilling its responsibilities, the Committee will carry out the specific duties set out in Part III of this Charter.
II. AUTHORITY OF THE AUDIT COMMITTEE
The Committee shall have the authority to:
(a) engage independent counsel and other advisors as it determines necessary to carry out its duties;
(b) set and pay the compensation for advisors employed by the Committee; and
(c) communicate directly with the external auditors.
A. Independent Auditors
- The Committee shall recommend to the Board the external auditors to be nominated, shall set the compensation for the external auditors, provide oversight of the external auditors and shall ensure that the external auditors report directly to the Committee.
- The Committee shall be directly responsible for overseeing the work of the external auditors, including the resolution of disagreements between management and the external auditors regarding financial reporting.
- The Committee shall review the external auditors’ audit plan, including scope, procedures and timing of the audit.
- The Committee shall review the results of the annual audit with the external auditors, including matters related to the conduct of the audit.
- The Committee shall obtain timely reports from the external auditors describing critical accounting policies and practices, alternative treatments of information within generally accepted accounting principles that were discussed with management, their ramifications, and the external auditors’ preferred treatment and material written communications between the Company and the external auditors.
- The Committee shall pre-approve all non-audit services not prohibited by law to be provided by the external auditors.
- The Committee shall review fees paid by the Company to the external auditors and other professionals in respect of audit and non-audit services on an annual basis.
- The Committee shall review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the present and former auditors of the Company.
- The Committee shall monitor and assess the relationship between management and the external auditors and monitor and support the independence and objectivity of the external auditors.
B. Financial Accounting and Reporting Process
- The Committee shall review the annual audited financial statements to satisfy itself that they are presented in accordance with generally accepted accounting principles and report thereon to the Board and recommend to the Board whether or not same should be approved prior to their being filed with the appropriate regulatory authorities. The Committee shall also review the interim financial statements. With respect to the annual audited financial statements, the Committee shall discuss significant issues regarding accounting principles, practices, and judgments of management with management and the external auditors as and when the Committee deems it appropriate to do so. The Committee shall satisfy itself that the information contained in the annual audited financial statements is not significantly erroneous, misleading or incomplete and that the audit function has been effectively carried out.
- The Committee shall review management’s discussion and analysis relating to annual and interim financial statements, earnings press releases, and any other public disclosure documents that are required to be reviewed by the Committee under any applicable laws prior to their being filed with the appropriate regulatory authorities.
- The Committee shall meet no less frequently than annually with the external auditors and the Chief Financial Officer or, in the absence of a Chief Financial Officer, with the officer of the Company in charge of financial matters, to review accounting practices, internal controls and such other matters as the Committee, Chief Financial Officer or, in the absence of a Chief Financial Officer, the officer of the Company in charge of financial matters, deems appropriate.
- The Committee shall be satisfied that adequate procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial statements other than earnings press releases, and periodically assess the adequacy of these procedures.
- The Committee shall establish procedures for:
(a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and
(b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
- The Committee shall inquire of management and the external auditors about significant risks or exposures, both internal and external, to which the Company may be subject, and assess the steps management has taken to minimize such risks.
- The Committee shall review the post-audit or management letter containing the recommendations of the external auditors and management’s response and subsequent follow-up to any identified weaknesses.
- The Committee shall ensure that there is an appropriate standard of corporate conduct including, if necessary, adopting a corporate code of ethics for senior financial personnel.
- The Committee shall provide oversight to related party transactions entered into by the Company.
C. Other Responsibilities
The Committee shall perform any other activities consistent with this Charter and governing law, as the Committee or the Board deems necessary or appropriate.
IV. COMPOSITION AND MEETINGS
- The Committee and its membership shall meet all applicable legal, regulatory and listing requirements, including, without limitation, securities laws, the listing requirements of the TSX Venture Exchange, the Canada Business Corporations Act and all applicable securities regulatory authorities.
- The Committee shall be composed of three or more directors as shall be designated by the Board from time to time, one of whom shall be designated by the Board to serve as Chair.
- The Committee shall meet at least quarterly, at the discretion of the Chair or a majority of its members, as circumstances dictate or as may be required by applicable legal or listing requirements. A minimum of two and at least 50% of the members of the Committee present either in person or by telephone shall constitute a quorum.
- If within one-half of an hour of the time appointed for a meeting of the Committee, a quorum is not present, the meeting shall stand adjourned to the same time on the next business day following the date of such meeting at the same place. If at the adjourned meeting a quorum as hereinbefore specified is not present within one-half of an hour of the time appointed for such adjourned meeting, such meeting shall stand adjourned to the same time on the next business day following the date of such meeting at the same place. If at the second adjourned meeting a quorum as hereinbefore specified is not present, the quorum for the adjourned meeting shall consist of the members then present.
- If and whenever a vacancy shall exist, the remaining members of the Committee may exercise all of its powers and responsibilities so long as a quorum remains in office.
- The time and place at which meetings of the Committee shall be held, and procedures at such meetings, shall be determined from time to time by, the Committee. A meeting of the Committee may be called by letter, telephone, facsimile, email or other communication equipment, by giving at least 48 hours notice, provided that no notice of a meeting shall be necessary if all of the members are present either in person or by means of conference telephone or if those absent have waived notice or otherwise signified their consent to the holding of such meeting.
- Any member of the Committee may participate in a meeting of the Committee by means of conference telephone or other communication equipment, and the member participating in a meeting pursuant to this paragraph shall be deemed, for purposes hereof, to be present in person at the meeting.
- The Committee shall keep minutes of its meetings which shall be submitted to the Board. The Committee may, from time to time, appoint any person who need not be a member, to act as a secretary at any meeting.
- The Committee may invite such officers, directors and employees of the Company and its subsidiaries as it may see fit, from time to time, to attend meetings of the Committee.
- Any matters to be determined by the Committee shall be decided by a majority of votes cast at a meeting of the Committee called for such purpose. Actions of the Committee may be taken by an instrument or instruments in writing signed by all members of the Committee, and such actions shall be effective as though they had been decided by a majority of votes cast at a meeting of the Committee called for such purpose. All decisions or recommendations of the Committee shall require the approval of the Board prior to implementation.