Nkombwa Hill Acquisition - Legal DD Completed

RNS Number : 3167V

Galileo Resources PLC

11 January 2013

 



 11 January 2013

Galileo Resources Plc

("Galileo" or the "Company")

 

Legal Due Diligence on Acquisition of Nkombwa Hill

Rare Earth Project Completed

The Board of Galileo Resources Plc (AIM: GLR), the emerging African Rare Earth exploration and development company, is pleased to announce that, further to the announcements of 25 July and 10 September 2012, the legal Due Diligence on Galileo's acquisition of Rare Earth International's (REI) Nkombwa Hill Rare Earth Project has now been finalised.  

In the update released on 10 September 2012 the Company reported that the only factor preventing completion of the due diligence was the issue of the tenure of Large Scale Prospecting License No. 12198-HQ-LPL that covers the Nkombwa Hill deposit.  At the time, key licensing-documentation was not accessible at the license administration centre (the "Cadastre") of the Zambian Ministry of Mines and Mineral Development (the "Ministry") and Galileo was therefore unable to gain sufficient title confidence to complete the acquisition. The Zambian legal practise contracted by the Company recently gained full access to the Cadastre and have now finalised the due diligence study and reported their findings to the Company.  They conclude that the license covering the Nkombwa Hill project is in good standing with, and the sole existing exploration license over the area recognised by, the Ministry. 

Colin Bird, Executive Chairman of Galileo Resources, said: "We are extremely pleased that the due diligence report is now finalised and that it confirms that the Nkombwa prospecting license is in good standing and unencumbered.  As a consequence, the Board has approved the issue of 5.25 million Galileo ordinary shares to REI prescribed in the Heads of Agreement (announced 25 July 2012). Galileo based on previous work carried out by REI and others are excited about the prospects for the Nkombwa Hill project and intend aggressively to advance the project to resource level in the shortest possible time whereby seeking to earn our 50% interest in the project.

The Company has therefore issued and allotted 5.25million new Ordinary Shares of 5p per Ordinary Share (the "Ordinary Shares") to the vendors (the "Consideration Shares"). Application has been made for the Consideration Shares to be admitted to trading on AIM and it is expected that Admission will occur, and dealings commence, on or about 17 January  2013.

Accordingly, the enlarged issued share capital of the Company, will comprise 88,307,183 Ordinary Shares in the capital of the Company.  The Consideration Shares will, when issued, rank pari passu in all respects with the existing issued Ordinary Shares of Galileo.

For further information, please contact:

Colin Bird, Chairman  & CEO	Tel [phone]
Jock Harmer, Technical Director	Tel [phone]
Andrew Sarosi, Executive Director	Tel [phone]
Beaumont Cornish Limited: Nominated Advisor and Broker Roland Cornish/James Biddle	Tel [phone]
Shore Capital Stockbrokers Limited: Joint Broker Jerry Keen/Toby Gibbs	Tel [phone]
Gable Communications Justine James	Tel [phone] M  [phone]

A copy of the announcement is available on the Company's website www.galileoresources.com

Technical Sign-Off

Dr Jock Harmer, Technical Director of Galileo, who holds a Ph.D. Geochemistry, University of Cape Town, is a Registered Professional Natural Scientist with SACNASP, and a 'qualified person' as defined under the AIM Rules for Companies and a competent person under the SAMREC, JORC and NI 43-101 reporting standards. The technical parts of this announcement have been prepared under Jock Harmer's supervision and he has approved the release of this announcement.

Notes

Galileo Resources Plc is a natural resource exploration company. The Company has an experienced management team with proven technical and commercial background. The flagship property is the Glenover Phosphate concession, which produced phosphate for many years. Phosphate however, is now subordinated to Rare Earth Elements (REEs). The project area is known to contain REEs and that the grades, if of sufficient size and continuity may well lead to a medium-sized operation for the production of REOs.

Galileo Resources currently has a 31.66% interest in the Glenover Project and has the option, via additional stage payments as set out in the Company's Admission Document, to earn up to a maximum interest of 73.73%.

One of the key benefits of the project for a medium-sized operation is that, if REEs, which have been shown to be present in the stockpiles from the previous phosphate operations, can be proven to compliant resource category, the cost of mining it and the associated risks should substantially be reduced.

The concession is of considerable size and hosts mineralisation types suitable for potential REE presence. The aim is to investigate the mineralisation types for REE presence and content with the view to proving up a mineable resource of REOs.

The Company can acquire a 35% interest in the Nkombwa Hill REE Project in Zambia.  Intensive surface sampling over the last 18 months has revealed a number of drill-ready targets having significant levels of REE mineralisation: REE concentrations recovered from kilogram-scaled outcrop samples range up to 23% TREO.

Technical Glossary

Phosphate (P₂O₅):                  an oxide of phosphorus

Rare earths (REE):                 a set of sixteen chemically similar elements in the periodic table made up of the fourteen stable lanthanides lanthanum to lutetium, plus yttrium and scandium.  The REE are commonly subdivided into the light REE (LREE), being the elements from lanthanum to samarium; and the heavy REE (HREE), the remaining seven lanthanides Europium to Lutetium, plus Yttrium.

REO (rare earth oxide):         the oxide form of the rare earth elements 

Mt                                             Million tonnes

TREO:                                        total rare earth oxides

The economically significant rare earth elements include:

La: Lanthanum                        Used extensively as a catalyst in the refining of crude oil; its ability to store 400 times its volume of hydrogen is utilised in rechargeable NiMH batteries that are an essential component of hybrid motor vehicles; La changes the refractive index of glass and is used in the manufacture of lenses for digital cameras.

Ce: Cerium                               Primary uses are in high quality polishing of glass, silicon wafers, solar cells; in auto catalytic converters; rich red colour pigments; low energy light bulbs.

Pr: Praseodymium                 As an additive Pr gives a pure yellow colour to glass and brilliant pastel greens and yellows for glazes; can be used along with Nd in permanent magnets (see below).

Nd: Neodymium                      Major application is in the manufacture of NdFeB permanent magnets (neo-magnets), the most powerful permanent magnets currently known. NdFeB magnets are essential in new "clean energy" technology such as wind turbines and hybrid and electrical motor vehicles; their high strength have allowed the miniaturising of hard disc drives and personal audio devices.  Nd, with Y, is widely used in the manufacture of lasers.  

Eu:  Europium                         Widely used as a phosphor: Eu alloys uniquely provide a perfect red colour for LED, LCD and plasma television and monitor screens; also used in thin film superconductor alloys and in lasers

Gd: Gadolinium                      Uses include neutron capture capability and in compounds as a contrasting agent in radiography and magnetic resonance imaging in medical diagnostics

Sm: Samarium                        Alloyed with cobalt Sm forms a strong permanent magnet that has the highest resistance to thermal demagnetization.

Y: Yttrium                                 Uses include lasers, as host for europium in TV red phosphor, alloyed with boron and cobalt high temperature superconductors and microwave filters

 

END

 

 

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