REG - Galileo Resources - Commencement of Drilling in the Western Foreland

Galileo ResourcesAnnouncement

29/07/2024 07:00

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RNS Number : 1019Y  Galileo Resources PLC  29 July 2024

Galileo Resources PLC

29 July 2024

Galileo Resources Plc

("Galileo" or the "Company")

Commencement of Drill Programme in the Western Foreland, Zambia

The Board of Galileo Resources Plc ("Galileo" or the "Company") is pleased to
announce that the Company has engaged a Zambian contractor to commence a drill
programme amounting to approximately 700 metres of drilling in the initial
phase on Licence 28001-HQ-LEL located in NW Zambia within the Western Foreland
domain, with rig mobilisation scheduled for later this week.

 

Highlights

·     Licence 28001-HQ-LEL is located within the Western Foreland domain,
the district potentially hosting Kamoa - Kakula style copper deposits in NW
Zambia.

 

·     The Licence is ideally located along strike of the Kamoa - Kakula
mining complex in the DRC and adjacent to a substantial exploration licence
area across the border in Angola acquired by Ivanhoe Mines which is targeting
further extensions of the Western Foreland.

 

·     The Company will be testing potential redox front targets where
suitable combinations of adjoining lithology have created the correct
environment for copper deposition.

 

·     The decision to drill has been preceded by an extensive programme
of reconnaissance and the reparation of roads and bridges to provide safe
access for drilling equipment.

 

·     Collation of all necessary permits and approvals and establishment
of contacts with local chiefdoms has been facilitated by Cooperlemon
Consultancy, the Company's partner in the Project.

 

Colin Bird, Executive Chairman said: "The operational activities outlined
represent the Company's initial drilling and extended fieldwork at our prime
licence in the Northwest region of Zambia.

 

The licence is well situated in the Zambian Western Foreland trend, which
hosts the Kamoa mine across the border in the DRC, about 100 miles northeast
of our activities.

 

We are pleased to have reached this juncture and look forward to the initial
results, which will certainly add to our database and hopefully confirm our
expectations for geological architecture supporting our prognosis."

 

Joint Venture Agreement

As announced on 05 September 2023, Galileo 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 agreed the following key terms of which i) and iii) have
been satisfied and ii) is ongoing:

 

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.

 

Technical Sign-Off

Technical information in this announcement has been reviewed by Edward (Ed)
Slowey, BSc, PGeo, Technical Director of Galileo. Mr Slowey is a geologist
with more than 40 years' relevant experience in mineral exploration and
mining, a founder member of the Institute of Geologists of Ireland and is a
Qualified Person under the AIM rules. Mr Slowey has reviewed and approved
this announcement.

 

You can also follow Galileo on Twitter: @GalileoResource

 

For further information, please contact: Galileo Resources PLC

 

 Colin Bird, Chairman                       Tel +44 (0) 20 7581 4477
 Beaumont Cornish Limited - Nomad           Tel +44 (0) 20 7628 3396

 Roland Cornish/James Biddle
 Novum Securities Limited - Joint Broker    +44 (0) 20 7399 9400

 Colin Rowbury /Jon Belliss
 Shard Capital Partners LLP - Joint Broker  Tel +44 (0) 20 7186 9952

 Damon Heath

 

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

 

Beaumont Cornish Limited, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting as nominated adviser to
the Company in relation to the matters referred herein. Beaumont Cornish
Limited is acting exclusively for the Company and for no one else in relation
to the matters described in this announcement and is not advising any other
person and accordingly will not be responsible to anyone other than the
Company for providing the protections afforded to clients of Beaumont Cornish
Limited, or for providing advice in relation to the contents of this
announcement or any matter referred to in it.

 

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END

 

Technical glossary

 

 "redox"  Oxidation/reduction reaction occurring in the weathering zone along the water
          table.

 

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