REG - Galileo Resources - Option and JV over Shinganda Copper-Gold Project

Galileo ResourcesAnnouncement

07/12/2021 07:00

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RNS Number : 7359U  Galileo Resources PLC  07 December 2021

 

For immediate release

 

7 December 2021

Galileo Resources Plc

("Galileo" or "the Company")

 

Option and Joint Venture Agreement over

Shinganda Copper-Gold Project, Zambia

 

Galileo Resources plc ("Galileo "or the "Company") is pleased to provide
details regarding an Option and Joint Venture Agreement entered into on 6
December 2021 with Garbo Resource Solutions Ltd, covering the Shinganda
Copper-Gold Project, Zambia comprising Large Scale Exploration Licence No.
22990-HQ-LEL (the "Project")

 

Highlights

·     Option agreement gives Galileo the right to earn an initial 51%
interest in the Shinganda copper-gold project in central Zambia, subject to
any necessary Zambian regulatory approval, by spending US$0.5m on exploration
and evaluation over two years

·     The Company can subsequently increase its interest through entering
into a Joint Venture to develop a mining operation, ranging from 65% interest
for a large deposit of greater than 1Mt of contained copper equivalent, up to
an 85% interest in a smaller deposit of less than 200,000 tonnes of contained
copper equivalent

·     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 off-property to the west by Vale S.A.
recorded 2m @ 3.93% Cu, 1.72 g/t Au

·     Historic grab sampling in an exploration pit towards the south of
the Project area by Vale S.A., with reported assay values of 10.45% Cu, 11g/t
Au, will be followed up in the field by Galileo for confirmation purposes

·     Galileo plans to review past exploration data followed by a
drilling programme focussed on testing the tenor and extent of the shallow
copper/gold mineralisation indicated by previous drilling and nearby mining

 

Colin Bird Chairman & CEO said: "This project fits the Galileo model in
that the licence areas have good copper and gold intersections from previous
campaigns. The agreement gives us the opportunity for new deposit discovery
and/or small mine production potential.

 

We look forward to working on this project commencing early in the New Year."

 

 

Summary

Galileo has entered into an Option and Joint Venture agreement with Garbo
Resource Solutions Ltd ("Garbo"), a private special purpose UK company
established to hold the Shinganda copper-gold property located in Central
Zambia. The property is held as a large-scale exploration licence No.
22990-HQ-LEL, covering an area of 186.76km(2), by Garbo Resource Zambia Ltd.,
which is 99.4% owned by Garbo.

 

Historic Exploration

There has been quite an amount of historic exploration on the licence and
small-scale open pit mining just outside the licence to the E-SE ('Western Sun
pit' and 'Moxico pit') along the Gerhard trend (E.SE-W.NW), which extends for
at least 10km. This trend appears to be a large, near-vertical fault/shear
zone. The Gerhard trend is marked by a strong magnetic linear and soil
geochemical anomaly, reflecting a zone of hematite-magnetite mineralisation,
along with associated copper-gold, which probably represents a hydrothermal
system driven by intrusives at depth. Apart from the two developed pits off
the property to the east, the main showing of interest is the Shinganda
prospect on the Shinganda property which was tested by two historic angled
drillholes across the fault structure which is 35m wide in this area. The
shallower hole intersected a reported 28.3m true width interval assaying 1.07%
Cu within the oxide zone at about 50m vertical depth which appears not to have
been followed up. Drilling suggests that mineralisation may fade out at depth.
Drilling off-property by Vale S.A. is reported to have intersected shorter
intervals of higher grade up to 2m @ 3.93% Cu, 1.72g/t Au. It is also reported
that an exploration pit in the southern part of the Shinganda property yielded
a sample collected by Vale S.A. assaying 10.45% Cu, 11g/t Au (Source:
Competent Persons Report on Garbo Resource Solutions Limited in North-Western
Province, Zambia by Coffey Geotechnics Ltd, March 2019 - page 53). This report
will be followed up by Galileo in the field for confirmation purposes.

 

 

Project Potential

The Company believes that there may be considerable further potential around
the Shinganda target, as previous drilling there appears very limited (just 2
holes known) and there remains considerable untested strike potential. Higher
copper-gold grades are recorded to the west in the ex-Vale property, and two
open pits were previously developed along the Gerhard structure to the east.
The target for Galileo would be primarily supergene-enhanced shallow
copper-gold mineralisation which is amenable to small to medium scale open pit
mining development and that can be readily tested by shallow drilling.

 

Project Licence

Licence No. 22990-HQ-LEL is in its initial 4-year term which expires on 22
August 2022. An exploration licence is valid for a period of four years. It
may be renewed for two further periods not exceeding three years each but the
maximum period from the initial grant of the licence shall not exceed 10
years. A holder of an exploration licence shall relinquish 50% of the licence
at each renewal.

 

Summary of Option Terms

An Option and Joint Venture Agreement has been signed with Garbo on the
following summary terms:

 

i.      Galileo may earn an initial 51% interest in the Project by
spending US$500,000 on exploration, including drilling and evaluation studies,
over a two-year period, subject to any necessary Zambian regulatory approval.

ii.     Galileo may withdraw without penalty at any stage during the
Option period

iii.    At any time during the Option period Galileo may elect to move
forward to a Joint Venture to more fully evaluate and, if warranted, develop
the Project.

iv.   Should the parties decide to advance the Project to feasibility study,
then Galileo will pay the cost of such a study.

v.    Galileo's share of profits from a mining operation will vary,
depending on the projected size of the deposit, ranging from 85% if the
project has the potential of greater than 50,000 but up to 200,000 tonnes of
contained copper equivalent, to 65% if the project has the potential for more
than 1,000,000 tonnes of contained copper equivalent.

vi.   On decision to mine, each party will be responsible for funding of the
development pro-rata to its equity holding in the Joint Venture

vii.  Should Garbo fail to finance its share in the development of the
Project, 100% ownership of the Project will revert to Galileo and Garbo will
be granted a 2% net smelter royalty on commercial production

 

 

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").

 

 

Technical Glossary

 "fault/shear zone"   Plane of failure in faulted body of rock

 "hematite"           A mineral composed of ferric iron oxide

 "hydrothermal"       Descriptive of hot magmatic emanations rich in water

 "intrusives"         Bodies of igneous rock that invade older rocks

 "magnetite"          A magnetic iron oxide, Fe(3)O(4)

 "soil anomaly"       A concentration of one or more elements in soil that is markedly higher than
                      background

 "supergene"          Descriptive of a mineral deposit, weathering or alteration formed by
                      descending solutions

 

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