REG - Galileo Resources - Interim Results
30/12/2022 10:00
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RNS Number : 3395L Galileo Resources PLC 30 December 2022
30 December 2022
Galileo Resources PLC
("Galileo" or "the Company" or "the Group")
Unaudited interim results for the six months ended 30 September 2022
Galileo (AIM: GLR), the exploration and development mining company, announces
its unaudited interim results for the six-month period ended 30 September
2022. A copy of the interim results is available on the Company's website,
www.galileoresources.com (http://www.galileoresources.com) .
Operational Highlights
ZAMBIA
Luansobe Copper Project
The Company holds a 75% interest in the Luansobe project and is undertaking an
advanced exploration programme with a view to completing a Project Feasibility
Study within 18 months of 20 February 2022.
The Luansobe area is situated some 15km to the northwest of Mufulira Mine in
the Zambian Copperbelt which produced well over 9Mt of copper metal during its
operation. It forms part of the north-western limb of the northwest -
southeast trending Mufulira syncline and is essentially a strike continuation
of Mufulira, with copper mineralisation hosted in the same stratigraphic
horizons. At the Luansobe prospect mineralisation occurs in at least two
horizons, dipping at 20-30 degrees to the northeast, over a strike length of
about 3km and to a vertical depth of at least 1,250m.
Period Under Review
Re-logging of historic drill core dating from the 1950s and 1960s was
completed, with core from five vertical holes being split for assaying of
possible copper-bearing zones not previously recognised or considered of
interest by earlier operators. This work identified mineralised lenses of
moderate copper grade, with some higher-grade intervals in an upper zone at
Luansobe - selected assay results received included:
· 16m @ 1.20% Cu from 58m in hole L0071
· 14m @ 0.99% Cu from 70m in hole L0069
The newly discovered mineralisation was considered by the Company to have the
potential to add incremental value to a possible open pit mining operation.
A contract was signed in August 2022 for a programme of core drilling designed
to infill gaps in historic drilling and twin selected holes, with a particular
focus on shallow levels of the Luansobe deposit. The new data will be utilised
to complete a mineral resource estimate reported in accordance with JORC
(2012) which will be used as the basis for potential open pit mine planning.
Post Period Under Review
On 03 November 2022 the Company confirmed completion of the drill programme,
comprising 28 vertical diamond drill holes totalling 3,563.5m, thus marking an
important step towards the definition of a new Mineral Resource Estimate for
the Project. Assay results for the first 15 of 28 holes drilled were received.
These identified wide zones of moderate grade, near-surface copper
mineralisation, potentially offsetting open pit pre-stripping costs, which
could be expected to impact positively on project economics.
Selected assay intervals for the first fifteen holes, included:
· 23.73m @ 2.63% Cu from 85.27m in hole LUDD013
· 2.56m @ 2.78% Cu from 45.44m in hole LUDD005
· 16.39m @ 0.95% Cu from 54.0m in hole LUDD009
· 7.0m @ 0.66% Cu from 21.0m in hole LUDD006
External independent consultant, Addison Mining Services of the UK, will
complete a JORC (2012) Mineral Resource Estimate as soon as the balance of
geological data and supporting assays have been received. The Mineral Resource
Estimate will provide the information required to progress towards a potential
open pit mine plan.
Shinganda Project
Galileo has an Option and Joint Venture project covering the Shinganda
Copper-Gold project, Zambia where the Company has the right to earn an initial
51% interest.
The project area covers part of a major 10km structural trend with two
previously developed small-scale open pit copper-gold mines. Very limited
historic drilling on the property is reported to have intersected 1.07% Cu
over a true width of 28.3m at shallow depth within supergene copper oxides.
Drilling on the structure within the Shinganda property further to the west by
Vale S.A. recorded a 2m interval @ 3.93% Cu, 1.72g/t Au.
Period Under Review
The Company engaged a contractor to undertake a detailed ground magnetic
survey at Shinganda, covering 383-line kilometres in total. Results were
received and are being used to help guide further exploration.
On 20 July 2022 Galileo reported that it had completed a reconnaissance
mapping and sampling exercise over the most prospective western sector of the
exploration licence. Much of the area is covered by a layer of overburden and
duricrust, nevertheless nine target areas with mineralisation or alteration of
interest were identified during mapping. Almost all were artisanal pit working
exposures with visible copper oxide mineralisation. Altogether 27 rock grab
samples were collected for copper and gold assay from the exposed rocks. Assay
results returned strongly anomalous values for copper and gold from many of
these, including:
· 1.42% Cu, 3.14g/t Au from the Shinganda outcrop
· 1.79% Cu, 10.19g/t Au from Target No.1
· 3.77% Cu, 1.24g/t Au from Target No.7
The outcome of the prospecting, showing the presence of copper and gold
mineralisation over an area of at least 12km x 6km on the Shinganda licence,
points to the potential for several shallow copper-gold deposits on the
property or for a potentially larger target.
The Company engaged a contractor to undertake an initial drilling programme to
test the Shinganda pit workings in the vicinity of the historic intersection
of 1.07% Cu over a true width of 28.3m at shallow depth within supergene
copper oxides - previous drill holes at Shinganda were not assayed for gold.
Results were reported for the first six angled holes totalling 963.9m drilled
at the Shinganda outcrop target, with copper assays being received for the
first four of these. Gold assay results were awaited. Shallow intervals of
semi-massive hematite mineralisation with strongly disseminated copper were
noted particularly in holes SHDD002 and SHDD005.
Assay results included:
· 50.3m @ 1.53% Cu from 21m downhole depth in SHDD002, with a
sub-interval of 7m @ 4.36% Cu, including 2.0m @ 11.31% Cu
· 43.7m @ 1.01% Cu from 7.3m downhole depth in SHDD004, including 10.0m
@ 1.61% Cu
Further drilling is planned.
Kashitu
Period under review
A new small-scale exploration licence was issued on 23 February 2022 covering
the core of the Kashitu project area. The licence will run for four years from
the issue date.
The Company has continued to plan for a drilling programme at the Kashitu zinc
project. Site visits were previously undertaken to establish the suitability
of several potential drill sites, with the initial focus on testing of a
high-grade willemite zinc silicate vein zone which has been partially mined
previously in a small open pit.
ZIMBABWE
Galileo announced an agreement entered into on 04 March 2022 which assigned to
Galileo an option granted under an agreement dated 21 January 2022 between BC
Ventures and Cordoba Investments Limited to acquire a 51% interest in BC
Ventures. BC Ventures is the owner of a highly prospective lithium project in
western Zimbabwe (the Kamativi Lithium Project) and two gold licences (the
Bulawayo Gold Project) close to Bulawayo through its wholly owned Zimbabwe
subsidiary Sinamatella Investments (Private) Limited. Under the terms of the
agreement the Company committed to spend US$1.5 million on exploration
expenditure by 21 January 2024.
On 10 August 2022, the Company further announced an agreement to acquire a
further 29% shareholding in the Sinamatella projects and an extension on the
commitment to spend US$ 1.5 million on exploration expenditure by 6 months to
21 July 2024. Post the financial period under review the Company announced
that all conditions had been met in relation to the agreement to acquire a 29%
shareholding in BC Ventures Limited (the "Share Acquisition") accordingly, the
Company issued 50,000,000 Galileo ordinary shares at a price of 1.2 pence per
share being the consideration shares due in relation to the Share Acquisition.
As a result, Galileo now has an interest of 29% in BC Ventures alongside an
option to acquire a further 51% interest through the Company spending
$1.5million on exploration and evaluation of the Projects by 21 July 2024.
Zimbabwe is recognised as one of the most potentially prospective countries in
Africa for pegmatite-hosted lithium. Among other explorers, Prospect Resources
Ltd (ASX: PSC) estimates that its Arcadia open pit lithium deposit, hosted
within a stacked series of pegmatite dykes, contains JORC- compliant proven
and probable ore reserves of 37.4Mt, grading at 1.22% Li2O. China's Zhejiang
Huayou Cobalt recently announced that it had agreed a deal to purchase 100% of
the Arcadia hard-rock lithium project for US$422m. Zimbabwe has also long been
a significant gold producer, primarily from Greenstone Belt quartz 'reef'
deposits that are host to many small to mid-size quartz reef gold mines and
deposits.
Period Under Review
Kamativi Lithium Project
The Kamativi Lithium Project comprises EPO 1782, covering 520km2, and lies on
the Kamativi Belt directly adjacent to, and along strike from the historic
Kamativi tin- tantalum mine which operated from 1936 to 1994. The Kamativi
Mine produced 37,000 tonnes of tin and 3,000 tonnes of tantalum ore from
pegmatites, and in 2018 Chimata Gold Corp (Zimbabwe Lithium Company) announced
a new JORC (2012) compliant Indicated Mineral Resource of 26Mt @ 0.58% Li2O
within the Kamativi mine tailings, confirming that the mine contained
significant quantities of lithium.
The Sinamatella licence area encloses extensions and splays of the Kamativi
Tin Mine host unit, including mapped pegmatites, and it has been reported that
there are old tin-fluorite workings within the Sinamatella property. The
licence area also contains a large extent of the pre-Cambrian Malaputese
Formation which is considered to be strongly prospective for VMS hosted
copper, surrounding the old Gwaii River Copper Mine and including numerous
other copper prospects and occurrences.
Little exploration has been carried out on the licence area in the past 25+
years, however there is very good historical data available to advance
exploration for lithium prospects.
Environmental studies were completed on the permit area and the necessary
permissions were granted by the Zimbabwe authorities to facilitate
commencement of exploration on the property. Reconnaissance mapping/sampling
site visits were undertaken, and detailed exploration work commenced on the
property, comprising geological mapping, rock grab sampling and soil sampling
aimed at identifying potentially lithium-bearing pegmatite host rocks.
Bulawayo Gold-Nickel-Copper Project
The Bulawayo Project comprises EPO 1783 and EPO 1784, covering a large
1,300km2 licence area near Bulawayo with extensive Greenstone Belt rock
formations in Zimbabwe. No systematic exploration has been carried out in the
area for more than 25 years due to the previously unfavourable investment
climate in Zimbabwe. Prospective areas with thin sand/alluvial/Karoo basalt
cover have never been explored and preliminary grab sampling on the property
reported assays ranging from 3.9-16g/t Au, confirming the prospectivity of the
ground.
The aim is to explore for resources to support the development of a large
scale mine. The licences adjoin and enclose a number of small-scale gold mines
on pre-existing mining permits which provides the opportunity to integrate the
production from these operations which have a total historic production
reported as more than 1Moz Au.
The Company contracted Xcalibur Airborne Geophysics (Pty) Ltd, to carry out a
fixed-wing airborne magnetic and radiometric survey over the Bulawayo licence
area, with the programme being completed in June 2022. The survey comprised
12,184 line km of flying at 100m line spacing covering extensive Greenstone
Belt rock formations. The aim of the survey was to map critical structures and
belts linking the many known small-scale gold mines and deposits to help
identify targets for the potential development of a medium to large scale
mine.
The survey successfully mapped magnetic greenstone lithologies that have
remained unexplored, hidden beneath relatively shallow alluvial and Karoo
sandstone cover. The new geophysical data was then integrated with existing
gold deposit and soil geochemical datasets. Modelling of the integrated
dataset identified multiple gold targets associated with these prospective
lithologies and geological structures known to provide the setting for both
historic gold producers and operating mines within the Bulawayo licences.
In addition to gold targets, three nickel targets were also identified
together with several further sites of interest. These included a 1.5km long
soil geochemical anomaly up to 1,700ppm Ni with a coincident magnetic
signature in the Fingo area, as well as several other buried or previously
unidentified gabbro and ultra-mafic intrusives that represent potential hosts
for nickel-copper mineralisation
Post Period Under Review
Kamativi
On 08 December 2022 the Company provided an update on a reconnaissance mapping
and sampling programme which identified four target zones with potential for
pegmatite-hosted lithium, tin and tantalum. Work included collection of 1,661
samples, comprising rock chips, stream sediments and soil samples which were
dispatched to an assay laboratory for a range of elements, including lithium,
tin and tantalum. Possible spodumene and petalite lithium mineralisation was
visually identified in rock chip samples from one site, however this will
require laboratory confirmation.
Bulawayo
In November 2022 Galileo reported in relation to the Bulawayo Project that the
following work was under way or planned on the initial targets selected for
follow-up, as a precursor to proposed drilling in early 2023.
Bembeshi Gold:
At the Bembeshi gold target, evidence was found of both historic and current
gold mining along a 7km-long outcropping greenstone trend. Exploration
encountered visible sulphides and associated alteration in multiple
shear-hosted quartz veins and stockworks over zones up to 30m wide. High-grade
gold is currently being mined by artisans and small-scale miners at reported
average grades of 5 to 7g/t Au. A wide-spaced soil survey had commenced over a
6km-long greenstone gold target hosting former producing mines to confirm the
continuity of gold mineralisation.
Bembeshi Nickel:
The new Bembeshi nickel target was outlined, located east of the Fingo
prospect, representing an entirely new potential nickel target. The target was
based on available evidence for a large buried mafic - ultramafic body with
potential to host nickel. Soil and rock sampling by the Company returned
encouraging Ni results from preliminary handheld XRF analysis.
At the Fingo nickel target, infill and extension soil lines were planned on
the prospect.
Queens West:
Ground geophysical surveys (resistivity and magnetic) were undertaken to test
possible gold-bearing structures identified under surface cover extending away
from current and historic gold mining activity in the Queens mine area,
supported by historic anomalous gold in soil ranging from 0.5 to 1.0g/t Au.
Discovery of multiple quartz veins/stockworks at surface containing sulphide
mineralisation, and active artisanal mining were considered to provide clear
evidence of the presence of gold along these structural extensions.
Supplementary IP-Resistivity ground geophysics was planned to generate
drill-ready gold targets
Galileo also reported that it had commissioned an external geological
contractor to build a small-scale mining database for legally held small
mining claims within the larger Bulawayo Licence to assist with exploration in
the medium-term.
BOTSWANA
Kalahari Copperbelt
Period under review
Following completion of the first phase drilling programme on PL40, PL39 and
PL253 an overview report of the programme was prepared incorporating
recommendations for follow-up drilling on the Galileo retained licences.
Significant encouragement in relation to the Kalahari Copperbelt is derived
from the recent commencement of mining operations by Sandfire Resources
Limited on its' Motheo Copper Mine and especially drilling reports by ASX
listed Cobre Limited from its' newly discovered Ngami copper-silver project
along 10km of strike which lies just about 20km from Galileo's PL253.
NEVADA
Ferber gold-copper project
Period Under Review
An earlier Galileo project review identified several drill targets at Ferber
to test both skarn-type gold-copper occurrences and Carlin-type gold
occurrences on the 100% held property. Due to strong demand for drill machines
in Nevada, it proved difficult to find a contractor to undertake diamond core
drilling at Ferber in 2022. However, the Company has proceeded with an
application for environmental permit for the planned programme and has engaged
Rangefront Mining Services, based in Elko Nevada, to assist in seeking quotes
from drilling contractors for Reverse Circulation (RC) drilling with the aim
of completing the planned programme during Q3 2023.
SOUTH AFRICA
Glenover Phosphate Project (" Glenover")
Period Under Review
The Company received confirmation that all conditions for Afrimat Limited
("Afrimat") to acquire the Vermiculite Mining Right from Glenover had been met
and that Glenover had elected for the Vermiculite Mining Right Consideration
to be paid in cash, of which of ZAR11.6 million (approx. £0.6 million) was
received by the Company.
Post Period Under Review
The Company announced that Afrimat had given notice to Glenover of its
intention to conditionally acquire 100% of the shares in Glenover from the
current shareholders of Glenover for consideration of ZAR300 million
(approximately £14.3 million) with the to receive ZAR107 million
(approximately £5.1 million).
The Sale Shares Consideration will be settled through a combination of cash
and Afrimat shares;
· 50% of the Sale Shares Consideration shall, at the election of
Afrimat, be split between Afrimat shares based on the Afrimat 30-day VWAP at
which the Afrimat shares traded on the JSE Limited on the relevant Effective
Date and cash (Afrimat has to make this election on the relevant Effective
Date); and
· 50% of the Sale Shares Consideration shall, at the election of the
Sellers (which includes the Company), be split between Afrimat shares 30-day
VWAP at which the Afrimat shares traded on the JSE Limited on the relevant
Effective Date and cash (the Sellers have to make this election on the
relevant Effective Date).
The remaining suspensive conditions of the Glenover Acquisition include
approval from the South African Department of Mineral Resources and Energy
("DMRE") in terms of Section 11 of the South African Mineral and Petroleum
Resource Development Act No. 28 of 2000 and South African Competition
Commission approval for the Acquisition. The Company anticipates that the
above suspensive conditions will be met by 31 July 2023.
In the event that either or both the suspensive conditions are not fulfilled
by 31 July 2023, interest will be payable at the prime lending rate of the
South African Reserve Bank (basic rate of interest that commercial banks
charge their customers) less 2% on the remaining purchase consideration of
ZAR300 million (£14.3 million) from 1 August 2023 until the suspensive
conditions are fulfilled or waived, as applicable, prior to the longstop date
of 30 April 2024.
The Company has a very prospective portfolio of projects all of which will be
pursued during 2023. The progress of certain projects beyond the first half of
2023 will depend on receipt of the funds from the Glenover sale proceeds as
referred to above. Should the receipt of funds be delayed, then certain low
priority projects may be deferred until receipt of the funds or alternative
funding is secured.
Financial Highlights
The Group reported earnings of £1,209,344 (2021: loss of £552,493) after
taxation. This included a fair value adjustment on non-current asset held for
sale of £2,392,670 in relation to the Group's interest in Glenover as more
fully described in the announcement of 9 December 2021. Earnings reported is
0.11 pence (2021: loss of 0.06 pence) per share. Earnings per share is based
on a weighted average number of ordinary shares of 1,115,819,649 (2021:
919,808,258).
For further information, please contact:
Colin Bird, Chairman and CEO Tel +44 (0) 20 7581 4477
Edward Slowey, Executive Director Tel +353 (1) 601 4466
www.galileoresources.com (http://www.galileoresources.com)
Beaumont Cornish Limited
Nominated Advisor
Roland Cornish/James Biddle Tel +44 (0)20 7628 3396
Novum Securities Limited - Broker
Colin Rowbury/ Jon Belliss Tel +44 (0)20 7382 8416
Statement of Responsibility for the six months ended 30 September 2022
The directors are responsible for preparing the consolidated interim financial
statements for the six months ended 30 September 2022 and they acknowledge, to
the best of their knowledge and belief, that:
· the consolidated interim financial statements for the six months ended
30 September 2022 have been prepared in accordance with UK adopted IAS 34 -
Interim Financial Reporting;
· based on the information and explanations given by management, the
system of internal control provides reasonable assurance that the financial
records may be relied on for the preparation of the
consolidated interim financial statements. However, any system of
internal financial control can
provide only reasonable, and not absolute, assurance against material
misstatement or loss;
· the going concern basis has been adopted in preparing the consolidated
interim financial statements and the directors of Galileo have no reason to
believe that the Group will not be a going concern in the
foreseeable future, based on forecasts and available cash resources;
· these consolidated interim financial statements support the viability
of the Company; and
· having reviewed the Group's financial position at the balance sheet
date and for the period ending on the anniversary of the date
of approval of these financial statements they are satisfied that the
Group has, or has access to, adequate resources to continue in operational
existence for the foreseeable future.
C Bird
Chairman and Chief Executive Officer
30 December 2022
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2022 2021 2022
(Unaudited) (Unaudited) (Audited)
£s £s £s
ASSETS
Intangible 4,382,659 2,854,706 3,875,570
assets
6
Investment in joint ventures - 1,990,053 2,936,125
Non-current assets held for sale 7 5,138,367 1,574,160 -
Loans to joint ventures, associates and subsidiaries 284,792 364,644 792,259
Other financial assets 2,318,549 1,440,148 1,994,617
Non-current assets 6,986,000 6,649,551 9,598,571
Trade and other receivables 387,734 49,796 119,855
Cash and cash equivalents 3,309,842 3,523,794 4,648,995
Other financial assets - 6,930 -
Current assets 8,835,943 5,154,680 4,768,850
Total Assets 15,821,943 11,804,231 14,367,421
EQUITY AND LIABILITIES
Share capital 32,146,730 31,636,356 31,996,730
Reserves 1,352,184 887,304 1,223,801
Accumulated loss (18,142,010) (21,687,406) (19,351,353)
15,356,904 10,836,254 13,869,178
Non-controlling interest 117,754 - 117,754
Equity 15,474,658 10,836,254 13,986,932
Liabilities
Other financial liabilities 6 6 6
Deferred taxation - 425,813 -
Non-current liabilities 6 425,819 6
Trade and other payables 141,628 542,158 106,233
Taxation payable 205,651 - 274,250
347,279 542,158 380,483
Total liabilities 347,285 967,977 380,489
Total Equity and liabilities 15,821,943 11,804,231 14,367,421
Joel Silberstein
30 December 2022
Company number: 05679987
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2022 2021 2022
(Unaudited) (Unaudited) (Audited)
£s £s £s
Revenue - - -
Operating expenses (629,417) (556,524) (753,321)
Operating loss (629,417) (556,524) (753,321)
Investment revenue 218,012 - 332,904
Fair value adjustments 2,392,670 - 141,205
Profit/(loss) on sale of investments - - (1,266,967)
Provision for impairment - - (495,842)
Share of (loss)/profit from equity accounted investments (771,921) 4,031 3,433,034
Profit/(loss) for the period before taxation 1,209,344 (552,4933) 1,391,013
Taxation - - 151,563
Profit for the period after taxation 1,209,344 (552,493) 1,542,576
Other comprehensive loss:
Exchange differences on translating foreign operations 91,182 41,091 483,319
Total comprehensive income/(loss) 1,300,526 (511,402) 2,025,895
Total comprehensive loss attributable to:
Owners of the parent 1,300,526 (511,402) 2,025,895
Weighted average number of shares in issue 1,115,819,649 919,808,258 1,038,799,984
Basic earnings/(loss) per share - pence 0.11 (0.06) 0.15
STATEMENTS OF CHANGES IN EQUITY as at 30 September 2022
Total capital Foreign currency translation reserve Convertible instruments Shares to be issued reserve Share based payment reserve Total reserves Accumulated Total NCI Total
Share Share
loss equity attributable to equity holders of the company equity
Capital
premium
Figures in Pound Sterling
reserve
Balance at 1 April 2021 6,522,609 23,182,635 29,705,244 (776,495) 1,047,821 - 566,374 837,700 (21,134,916) 9,408,029 - 9,408,029
Loss for the year - - - - - - - - 1,542,576 1,542,576 - 1,542,576
Other comprehensive income - - - 483,319 - - - 483,319 - 483,319 - 483,319
Total comprehensive income for the year - - - 483,319 - - - 483,319 1,542,576 2,025,895 - 2,025,895
Warrants lapsed (91,194) (91,194) 91,194 - -
Options lapsed (149,793 (149,793) 149,793 - -
Warrants issued - (27,560) (27,560) - - - 27,560 27,560 - - - -
Warrants exercised - 33,791 33,791 - - - (33,791) (33,791) - - - -
Issue of shares 184,559 2,100,696 2,285,255 - - - - - - - - -
- --
Shares to be issued - - - - - 150,000 - 150,000 - 150,000 - 150,000
Change in share in associate - - - - - - - - - - 117,754 117,754
Total contributions by and distributions 184,559 2,106,927 2,291,486 - (247,218) (97,218) 240,987 2,435,255 2,553,009
to owners of company recognised
directly in equity - - 117,754
Balance at 1 April 2022 6,707,168 25,289,562 31,996,730 (293,176) 1,047,821 150,000 319,156 1,223,801 (19,351,353) 13,869,178 117,754 13,986,932
Loss for the 6 months - - - - - - - - 1,209,344 1,209,344 - 1,209,344
Other comprehensive income - - - 91,182 - 91,182 - 91,182 - 91,182
Total comprehensive income for the 6 - - - 91,182 - - - 91,182 1,209,344 1,300,526 - 1,300,526
months
Options issued - - - - - - 187,201 187,201 - 187,201 - 187,201
Warrants exercised - - - - - - - - - - - -
Issue of shares 13,742 136,258 150,000 - - (150,000) - (150,000) - - - -
Total contributions by and distributions 13,742 136,258 150,000 - - (150,000) 187,201 37,201 - 187,201 - 187,201
to owners of company recognised
directly in equity
Balance at 30 September 2022 6,720,910 25,425,820 32,146,730 (201,994) 1,047,821 - 506,357 1,352,184 (18,142,010) 15,356,904 117,754 15,474,658
CONSOLIDATED STATEMENTS OF CASH FLOW Six months Six months Year
ended ended ended
30 September 30 September 31 March
2022 2021 2022
(Unaudited) (Unaudited) (Audited)
£s £s £s
Cash used in operations (595,592) (175,946) (901,220)
Interest income 2,884 - 238,827
Net cash from operating activities (592,708) (175,946) (662,393)
Additions to intangible assets (154,106) (700,753) (1,559,823)
Distributions from Joint Ventures (incl subs, JVs & Assoc) - - 2,417,977
Proceeds on sale of non-current assets held for sale - 1,095,385 1,132,394
Loans repaid/(advanced) 509,567 (18,960) -
Purchase of financial assets (1,101,906) - (132,644)
Net cash flows from investing activities (746,445) 375,672 1,857,904
Net Proceeds on share issue - 1,931,113 2,060,529
Net cash flows from financing activities - 1,931,113 2,060,529
Total cash movement for the period (1,339,153) 2,130,839 3,256,040
Cash at the beginning of the period 4,648,995 1,392,955 1,392,955
Total cash at end of the period 3,309,842 3,523,794 4,648,995
Notes to the Financial Statements
1. Status of interim report
The Group unaudited condensed interim results for the six months ended 30
September 2022 have been prepared using the accounting policies applied by the
Company in its 31 March 2022
annual report, which are in accordance with UK adopted international
Accounting Standard, the AIM rules of the London Stock Exchange and the
Companies Act 2006 (UK). This condensed consolidated interim financial report
does not include all notes of the type normally included in an annual
financial report. Accordingly, this report is to be read in conjunction with
the annual report for the year ended 31 March 2022 and any public
announcements by Galileo Resources Plc. All monetary information is presented
in the presentation currency of the Company being Great British Pound. The
Group's principal accounting policies and assumptions have been applied
consistently over the current and prior comparative financial period. The
financial information for the year ended 31 March 2022 contained in this
interim report does not constitute statutory accounts as defined by section
435 of the Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified and did not contain a statement under section
498(2)-(3) of the Companies Act 2006.
2. Basis of preparation
The consolidated financial statements incorporate the financial statements of
the Company and all entities for the six months ended 30 September 2022,
including special purpose entities, which are controlled by the Company.
Control exists when the Company has the power to govern the financial and
operating policies of an entity to obtain benefits from its activities. The
results of subsidiaries are included in the consolidated annual financial
statements from the effective date of acquisition to the effective date of
disposal. Adjustments are made when necessary to the annual financial
statements of subsidiaries to bring their accounting policies in line with
those of the Group.
All intra-group transactions, balances, income and expenses are eliminated in
full on consolidation. Non-controlling interests in the net assets of
consolidated subsidiaries are identified and recognised separately from the
Group's interest therein and are recognised within equity. Losses of
subsidiaries attributable to non-controlling interests are allocated to the
non-controlling interest even if this results in a debit balance being
recognised for non-controlling interest. Transactions which result in changes
in ownership levels, where the Group has control of the subsidiary both before
and after the transaction, are regarded as equity transactions and are
recognised directly in the statement of changes in equity. The difference
between the fair value of consideration paid or received and the movement in
non-controlling interest for such transactions is recognised in equity
attributable to the owners of the parent.
3. Segmental analysis
Business unit
The Company's investments in subsidiaries and associates, that were
operational at year-end, operate in four geographical locations being South
Africa, Botswana, Zambia, Zimbabwe and USA, and are organised into one
business unit, namely Mineral Assets, from which the Group's expenses are
incurred and future revenues are expected to be earned. This being the
exploration for and extraction of its mineral assets through direct and
indirect holdings. The reporting on these investments to the board focuses on
the use of funds towards the respective projects and the forecasted profit
earnings potential of the projects.
The Company's investment in Zambia and Zimbabwe did not contribute to the
operating profit or losses and is excluded from the segmental analysis.
Geographical segments
An analysis of the profit/(loss) on ordinary activities before taxation is
given below:
Six months ended 30 Six months ended 30 Year
September September ended
2022 2021 31 March
(Unaudited) (Unaudited) 2022
(Audited)
£s £s £s
Profit/(loss) on ordinary activities before taxation:
Rare earths, aggregates and iron ore and manganese - South Africa 2,191,462 4,031 3,433,034
Gold - USA (4,214) (2,288) 8,170
Copper - Botswana (22,664) - 117,599
Corporate costs - United Kingdom (955,240) (443,598) (2,167,790)
1,209,344 (552,493) 1,391,013
4. Financial review
The Group reported earnings of £1,209,344 (2021: loss of £552,493) after
taxation. Earnings reported is 0.11 pence (2021: loss of 0.06 pence) per
share. Earnings per share is based on a weighted average number of ordinary
shares of 1,115,819,649 (2021: 919,808,258).
5. Share Capital
During the period under review the Company issued new ordinary shares as
follows:
Number of
Date ordinary shares
Opening balance 1 096 946 844
Acquisition 13 741 609
Closing balance 1 110 688 453
Post the period under review the Company issued new ordinary shares as
follows:
Number of
Date ordinary shares
Opening balance 1 110 688 453
Acquisition 50 000 000
Closing balance 1 160 688 453
Warrants
The Company had the following warrants outstanding at the period end:
Issue date Number of warrants Issue price (pence) Expiry date
15-Sep-20 10 000 000 2.00 2022/10/15
01-Jun-21 3 341 666 2.25 2023/06/01
01-Jun-21 66 833 332 2.25 2023/06/01
80 174 998
The Company had the following warrants outstanding at the date of this report:
Issue date Number of warrants Issue price (pence) Expiry date
01-Jun-21 3 341 666 2.25 2023/06/01
01-Jun-21 66 833 332 2.25 2023/06/01
70 174 998
Share Options 30 September 2022 30 September 31 March
2021 2022
Outstanding at the beginning of the year 58,700,000 68,400,000 68,400,000
Options lapsed - - (9,700,000)
58,700,000 68,400,000 58,700,000
During the period under review, on 28 July 2022 the Company granted 13,500,000
new options to employees and management at a strike price of 1.35 pence. The
options vest immediately and expire on 25 July 2025. The fair value of options
issued prior to the period end was determined by using the Black-Scholes
Valuation Model.
6. Intangible assets
Reconciliation of Intangible assets:
Group as at 30 September 2022
Asset currency Opening balance Additions Foreign exchange movements Closing
balance
Exploration and evaluation asset - Botswana 1,467,320 32,692 12,976 1,512,988
BWP
Exploration and evaluation asset - U.S.A. 1,893,024 121,414 340,007 2,354,445
US$
Exploration and evaluation asset - Zambia 515,226 - - 515,226
ZMW
Total intangible assets 3,875,570 154,106 352,983 4,382,659
Group as at 30 September 2021
Asset currency Opening balance Disposal as part of assets held for sale Additions Foreign exchange movements Closing balance
Exploration and evaluation asset - Botswana BWP 2,796,950 (2,378,626) 605,575 391 1,024,290
Exploration and evaluation asset - U.S.A. US$ 1,696,493 - 95,178 38,744 1,830,415
Total intangible assets 4,493,443 (2,378,626) 700,753 39,135 2,854,705
Group as at 31 March 2022
Asset currency Opening Additions Foreign exchange movements Total
Exploration and evaluation asset - Botswana BWP 418,324 1,047,628 1,367 1,467,320
Exploration and evaluation asset - U.S.A. US$ 1,696,493 114,723 81,807 1,893,024
Exploration and evaluation asset - Zambia ZMW - 515,226 - 515,226
2,114,817 1,667,577 83,174 3,875,570
Botswana
The Company currently holds copper licenses in the highly prospective Kalahari
Copper Belt ("KCB"), The KCB is approximately 800km long by up to 250km wide,
is a northeast-trending Meso- to Neoproterozoic belt that occurs
discontinuously from western Namibia and stretches into northern Botswana
along the northwestern edge of the Paleoproterozoic Kalahari Craton. The belt
contains copper-silver mineralisation, which is generally stratabound and
hosted in metasedimentary rocks of the D'Kar Formation near the contact with
the underlying Ngwako Pan Formation. The hanging wall-footwall redox contact
is a distinctive target horizon that consistently hosts copper-silver
mineralization in fold-hinge settings. The geological setting is similar to
that of the major Central African Copper Belt and Kupferschiefer in Poland.
7. Non-current assets held for sale
Group as at 30 September 2022
Glenover Phosphate (Pty) Ltd
The Company currently holds a 30.70% direct investment in Glenover and also
has an indirect investment of 4.99% in Glenover through its shareholding in
Galagen Proprietary Limited, a special purpose vehicle incorporated to hold
the BEE shareholding in the Glenover project, resulting in a total interest in
Glenover of 35.69%.
As announced on 9 December 2021, Glenover entered into a conditional sale of
shares agreement with JSE Limited listed Afrimat Limited (JSE: AFT)
("Afrimat") Glenover also between Afrimat, Glenover and the shareholders of
Glenover including Galileo Resources SA (Pty) Ltd the Company's wholly owned
South African subsidiary under which Afrimat has the option to acquire the
sale of shares in and shareholders loans made to Glenover for ZAR300 million
(approximately £14.3 million).
On 26 October 2022, The Company announced that Afrimat had given notice to
Glenover of its intention to conditionally acquire 100% of the shares in
Glenover from the current shareholders of Glenover for consideration of ZAR300
million (approximately £14.3 million) with the to receive ZAR107 million
(approximately £5.1 million).
The Sale Shares Consideration will be settled through a combination of cash
and Afrimat shares;
· 50% of the Sale Shares Consideration shall, at the election of
Afrimat, be split between Afrimat shares based on the Afrimat 30-day VWAP at
which the Afrimat shares traded on the JSE Limited on the relevant Effective
Date and cash (Afrimat has to make this election on the relevant Effective
Date); and
· 50% of the Sale Shares Consideration shall, at the election of the
Sellers (which includes the Company), be split between Afrimat shares 30-day
VWAP at which the Afrimat shares traded on the JSE Limited on the relevant
Effective Date and cash (the Sellers have to make this election on the
relevant Effective Date).
The remaining suspensive conditions of the Glenover Acquisition include
approval from the South African Department of Mineral Resources and Energy
("DMRE") in terms of section 11 of the South African Mineral and Petroleum
Resource Development Act No. 28 of 2000 and South African Competition
Commission approval for the Acquisition.
In the event that either or both the suspensive conditions are not fulfilled
by 31 July 2023, interest of the South African Reserve Bank at prime rate less
2% will be payable on the remaining purchase consideration of ZAR300 million
from 1 August 2023 until the suspensive conditions are fulfilled or waived, as
applicable, prior to the longstop date of 30 April 2024.
8. Going concern
The Company has sufficient financial resources to enable it to continue in
operational existence for the foreseeable future and meet its liabilities as
they fall due.
The directors have further reviewed the financial position of the Company at
the date of this report and Company's cash flow forecast which includes the
receipt of £5.1 million from the proceeds of the sale of shares in Glenover
which the Company anticipates will be received by the 31 July 2023. The
Company has a very prospective portfolio of projects all of which will be
pursued during 2023. The progress of certain projects beyond the first half of
2023 will depend on receipt of the funds from the Glenover sale proceeds as
referred to above. Should the receipt of funds be delayed, then certain low
priority projects may be deferred until receipt of the funds or alternative
funding is secured.
Accordingly, the directors consider it appropriate to continue to adopt the
going-concern basis in preparing these financial statements. This basis
presumes that funds will be available to finance future operations and that
the realisation of assets and settlement of liabilities and commitments will
occur in the ordinary course of business.
9. Post balance sheet events
9.1 Acquisition of a further 29% shareholding in BC Ventures
Limited
On 20 October 2022, the Company announced that all conditions had been met in
relation to the agreement to acquire a 29% shareholding in BC Ventures Limited
(the "Share Acquisition"); accordingly, the Company issued 50,000,000 Galileo
ordinary shares at a price of 1.2 pence per share being the consideration
shares due in relation to the Share Acquisition (the "Consideration Shares").
As a result, Galileo hold an interest of 29% in BC Venturers alongside an
option to acquire a further 51% interest through the Company spending
$1.5million on exploration and evaluation of the Projects by 21 January 2024.
The Consideration Shares are subject to the following lockup and orderly
market arrangements and cannot be sold during the lockup periods.
9.2 Update on Afrimat Option to sell shares in Glenover
The Company announced 26 October 2022 that Afrimat Limited ("Afrimat") had
given notice to Glenover of its intention to conditionally acquire 100% of the
shares in Glenover from the current shareholders of Glenover for consideration
of ZAR300 million (approximately £14.3 million) with the to receive ZAR107
million (approximately £5.1 million).
The Sale Shares Consideration will be settled in a combination of cash and
Afrimat shares;
· 50% of the Sale Shares Consideration shall, at the election of
Afrimat, be split between Afrimat shares based on the Afrimat 30-day VWAP at
which the Afrimat shares traded on the JSE Limited on the relevant Effective
Date and cash (Afrimat has to make this election on the relevant Effective
Date); and
· 50% of the Sale Shares Consideration shall, at the election of the
Sellers (which includes the Company), be split between Afrimat shares 30-day
VWAP at which the Afrimat shares traded on the JSE Limited on the relevant
Effective Date and cash (the Sellers have to make this election on the
relevant Effective Date).
The remaining suspensive conditions of the Glenover Acquisition include
approval from the South African Department of Mineral Resources and Energy
("DMRE") in terms of section 11 of the South African Mineral and Petroleum
Resource Development Act No. 28 of 2000 and South African Competition
Commission approval for the Acquisition.
In the event that either or both the suspensive conditions are not fulfilled
by 31 July 2023, interest of the South African Reserve Bank at prime rate less
2% will be payable on the remaining purchase consideration of ZAR300 million
from 1 August 2023 until the suspensive conditions are fulfilled or waived, as
applicable, prior to the longstop date of 30 April 2024.
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