Zambian Exploration Licence joint venture

Galileo Resources PLC

05 September 2023

 

5 September 2023

Galileo Resources Plc

("Galileo" or the "Company")

Zambian Exploration Licence joint venture
Issue of Equity & TVR

The Board of Galileo Resources Plc ("Galileo" or the "Company") is pleased to announce that the Company has entered into a joint venture agreement with Cooperlemon Consultancy Limited in relation to the exploration for copper at large scale exploration license 28001-HQ-LEL in Northwest Zambia (the "Licence").

Highlights

·    Licence 28001 - HQ - LEL runs along the Angolan-Zambian border and is closely associated with the perceived Western Foreland geological district boundary that potentially hosts Kamoa - Kakula deposits in Northwest Zambia.

·    The licence is 52,000 hectares area covering ground in a district where the Company believes there is scope for the discovery of Kamoa-style mineralisation.

·    There has been limited exploration to date and initial fieldwork will commence within 60 days on the Licence with a view to defining potential drill targets as soon as possible.

Colin Bird, Executive Chairman said: "This acquisition is consistent with our policy of acquiring opportunity projects where potential outweighs entry in reliable jurisdictions. The Project is well-positioned in the emerging NW part of Zambia which is showing potential not dissimilar to its' Democratic Republic of the Congo neighbour Kamoa and Ivanhoe exploration areas known as the Western Foreland. We intend to aggressively pursue this project to test the potential for near-surface mineralisation as well as the much postulated Kamoa-style mineralisation. Once targets are generated we will proceed to drilling as soon as we are able and hopefully before the rainy season commences. We will keep shareholders posted as progress occurs".

Joint Venture Agreement

Galileo yesterday entered into a joint venture agreement with Cooperlemon Consultancy Limited ("Cooperlemon") in relation to the exploration for copper at large scale exploration license 28001-HQ-LEL in Northwest Zambia (the "Licence"). Under the joint venture agreement ("JV Agreement"), Galileo has agreed the following key terms:

Earn-in and Phase 1 exploration budget: Galileo will earn a 65% interest in the joint venture by;

i)          An immediate cash payment of US$230,000 to Cooperlemon;

ii)         funding exploration expenditure over an initial eighteen month period ("Phase 1") on the Licence of not less than US$750,000. Exploration is expected to commence in September / October 2023, and will comprise both physical activity within the Licence boundaries (including but not limited to mapping, soil geochemistry, geophysics and drilling), and desktop studies, laboratory analysis and interpretation of data and results. Galileo anticipates funding this exploration expenditure from existing resources; and

iii)        for the issue of 2,500,000 Galileo Resources plc shares (the "Consideration Shares") at a price of 1.175 pence per share being the closing Galileo share price on 4 September 2023 (totalling £29,375). The Consideration Shares are subject to a three month lock up arrangement and thereafter a further three months orderly market arrangement. Under the orderly market arrangement, the Consideration Shares can be sold via the Company's broker at a price determined by the vendor (the "Nominated Sale Price")  which shall not be less than the lower of i) the 10 day VWAP and ii) the closing bid price on the day before the fixing of the Nominated Sale Price and the Company's broker will have 10 business days to sell the shares at the Nominated Sale Price.

If the Phase 1 exploration results are successful and prove the continuity of mineralisation at grades suggesting the potential for the future development of a Mineral Resource of not less than 500,000 tonnes of contained copper, consistent with economic recovery at the depth of discovery with a minimum internal rate of return of not less than 25% and a payback period not exceeding 42 months (including the recovery of capital expenditure), then there will be a second two year exploration period ("Phase 2").

Phase 2 exploration budget: The Phase 2 exploration expenditure of US$1.5 million will also be funded by Galileo who will be the operator of the Licence for the duration of the Agreement.

Consequence of Trade Sale: If there is a trade or any other sale of the Licence and / or the Joint Venture during Phase 1 of the joint venture then Galileo will be deemed to have a 55% interest in the Joint Venture.  A sale requires the agreement of both Galileo and Cooperlemon.

Mine Development: In the event the Licence advances to a point where they are commercially viable and suitable for development then the licence will be moved to a corporate entity to be owned 75% by Galileo and 25% by Cooperlemon, and it will be the responsibility of the newly formed corporate entity to raise all capital for mine development and future operations.

Further information on the Licence

Licence No: 28001-HQ-LEL, which comprises 52,083 hectares and expires on 31 May 2025, is held by L and I Investments Limited ("L and I"), a private Zambian company which with Cooperlemon is under the common control of local Zambian parties. The Licence is located in North-West Zambia along the Angolan-Zambian border. L and I has agreed with Galileo to be bound by the terms and the conditions of the JV Agreement with Cooperlemon (who is acting on their behalf) as though they were a party to the JV Agreement.

Geology, location and prospectivity

The style of mineralisation and associated geology and structure responsible for the Kamoa-Kakula deposit operated by Ivanhoe Mines may extend into the North-West Zambia.

The Western Foreland succession determines the geology of the region and the Licence lies within the area where the Western Foreland lithology necessary for Kamoa-style mineralisation can reasonably be expected to occur.

 Application to trading on AIM: Application will be made to the London Stock Exchange for a total of 2,500,000 new Galileo Shares to be admitted to trading on AIM which rank pari passu to the existing ordinary shares in the Company. It is expected that Admission will become effective and that dealings in the new Galileo Shares will commence at 8.00 a.m. on 12 September 2023.

Total Voting Rights: On Admission, the number of Ordinary Shares in issue will be 1,163,188,453  (the "Enlarged Share Capital") which may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Galileo under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

Further information is available from the Company's website which details the company's project portfolio as well as a copy of this announcement: www.Galileoresources.com

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

The person who arranged for the release of this announcement on behalf of the Company was Colin Bird, Executive Chairman and Director.

You can also follow Galileo on Twitter: @GalileoResource

For further information, please contact: Galileo Resources PLC

Colin Bird, Chairman		Tel [phone]
Beaumont Cornish Limited - Nomad Roland Cornish/James Biddle		Tel [phone]
Novum Securities Limited - Joint Broker Colin Rowbury /Jon Belliss		[phone]
Shard Capital Partners LLP - Joint Broker Damon Heath		Tel [phone]

Qualified Person:

Colin Bird: The technical information contained in this announcement has been reviewed, verified, and approved by Colin Bird, C.Eng, FIMMM, South African and UK Certified Mine Manager and Director of Galileo Resources plc, with more than 40 years' experience mainly in hard rock mining.

 

END