REG - Galileo Resources - Update on the Luansobe Copper Project

Galileo ResourcesAnnouncement

06/09/2024 07:00

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RNS Number : 1532D  Galileo Resources PLC  06 September 2024

 

For immediate release

 

Galileo Resources PLC

6 September 2024

Galileo Resources Plc

("Galileo" or "the Company")

Update on the Luansobe Copper Project, Zambia

 

Galileo Resources plc ("Galileo "or the "Company") further to its announcement
on 29 May 2024, is pleased to provide an update on the proposed development of
the Luansobe copper project ("Luansobe" or the "Project") in Zambia where a
small-scale mining licence has been granted and Galileo holds a 75% interest
in the Project.

 

External consultants have been used to generate a mining schedule for internal
planning and more specifically to facilitate the process of obtaining mining
contractor quotations and to provide the basis for negotiation with third
parties currently offering a range of participation scenarios to jointly
develop the Project.

As previously announced, Luansobe has the potential to be a multi-resource
project with open pit, shallow underground and deeper underground resources
all having been identified to varying degrees (see RNS of 9 February 2023).
Planning has now highlighted that it may not be necessary for one operator or
contractor to retain control or oversight across all mining areas and the
Galileo Board has taken cognisance of the fact that it may be in shareholder's
interest to split the Project into separate mining and processing operations
each capable of generating a sustainable and profitable business.

The Board considers the optionality offered by the resource to be a
significant benefit. This optionality is underscored by the wide range of
commercial routes afforded the Project following approaches from a number of
potential investors, partners, and contractors. These various commercial
options or routes that can be followed include contractor mining followed by
in-house processing, contractor mining with external toll treatment of ore and
mining and toll treatment delivered by a single provider. Consultation with
external expertise is considering all of these options and it remains the
responsibility of the Board to select the best option or options that will
optimise the Luansobe resource and maximise shareholder returns.

In order to generate the mining schedule, the external consultant undertook to
review the geological database, interrogate the geological block model,
complete pit optimisation using benchmark operating mining costs for agreed
mine design criteria, complete optimisation with sensitivity analysis and
compare grades and tonnage between the various pit selections.

The Company intends to complete the work set out below before committing to a
date for the commencement of operations at Luansobe and will keep Shareholders
updated as this evolves. Production remains dependant on a number of factors
as announced previously but including permitting and the availability of
funding.

Highlights

·    The initial optimisation study has identified the following
opportunities:

·     Remodelling of the geological block model resulted in the inclusion
of low-grade (below cut-off) ore that will improve dilution

·     Potential inclusion of ore within the overburden

·     Inclusion of a possible free dig portion of the overburden

·    Sensitivity analysis highlighted a number of optimisation scenarios
for the open pit only:

·     Extending pit depth to 220m using a 0.25% Cu cut-off resulted in an
estimated run of mine tonnage of 9.12 million tonnes("Mt") and projected total
copper production for the open pit of approximately 70,000t Cu.

·     Reducing pit depth to 160m using a 0.5% Cu cut-off resulted in an
estimated run of mine tonnage of 4.41Mt and projected total copper production
for the shallower open pit of approximately 40,000t Cu.

·    In order to provide contractors and other interested parties with the
best possible information upon which to base offers and/or tenders, the Board
has instructed the external consultant to complete mine design to complement
the strategic scheduling already completed. This will provide interested
parties with detailed mine design, pushback design, life of mine scheduling
and for internal use, trade-off studies.

·    Potential exists outside of the Mineral Resource defined by the block
model which has the scope to add significantly to the global resource. More
specifically, this includes shallow underground mineralisation excluded from
previous resource estimation work due to limited drill density.

·    Deeper mineralisation has also come under the spotlight where some
excellent in-house studies has identified geological factors that may have a
profound bearing on interpretation of the distribution of mineralisation and
the Company's planned deep level drilling strategy.

 

Colin Bird Chairman & CEO said: "We are very pleased with our Luansobe
acquisition. The investment was based on previous work and since acquiring the
project we have also carried out fieldwork, drilling programmes, relogging
historic core, modelling for resource and engineering financial modelling. The
work we have carried out confirms that the project has the potential to be a
large-scale mining project close to existing processing facilities, large and
small notwithstanding the Mufulira mine. We have interrogated more than 300
boreholes collared within the Licence and we are now confident of the orebody
architecture but more importantly, through engineering modelling have
identified blocks of ore which can fit into the open pit and shallow UG that
is transformative for our original expectations for the pit. This work was
carried out in conjunction with a third-party engineering consultant, Sound
Engineering Solutions and we are grateful to them for their contribution. We
are now convinced that ""we have a two, possibly three-stage, project with a
substantial Cu ore resource suitable initially for O/P mining and potentially
followed by a large scale UG operation. Naturally a project of this size and
definition has attracted considerable interests from third parties and as such
we have entertained numerous enquiries concerning potential involvement in
varying ways. The Board of Galileo is acutely aware that embarking on a
particular development route would probably be exclusive to other routes thus
removing the optionality of best value outcome for the Galileo shareholders.
We remain open to the various options tabled and recognise the need to select
the optimum option to satisfy shareholder expectations. We will keep
shareholders advised on progress should a material event regarding Luansobe be
consummated".

Project Background

The Luansobe area is situated some 15km to the northwest of the Mufulira Mine
in the Zambian Copperbelt which produced well over 9Mt of copper metal during
its operation. It forms part of the northwestern 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 over two contiguous
zones, 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.

Galileo entered into a Joint Venture agreement with Statunga, a private
Zambian company which held the Project comprising small-scale exploration
licence No. 28340-HQ-SEL in the Zambian Copperbelt prior to its conversion to
two mining licences (see RNS of 30 December 2021).

Information on Statunga: Statunga Investments Limited was registered on 4 May
2020 in Zambia with company number 120200003303 owned by Zambian individuals,
including Lukonde Makungu who is a director of Statunga Investments Limited
and an executive director of Cooperlemon consultancy which provides
consultancy services to Statunga.  Statunga's main activity is mining, and
registered address office is at Plot No. 2457B, Kamfinsa, Copperbelt Province,
Zambia.

The JV Agreement provides Galileo the right to earn an initial 75% interest in
a special purpose joint venture company to be established under Zambia law to,
with Ministerial consent, acquire the exploration licence and the technical
data related to the Luansobe Project by making two payments of US$200,000 each
(subject to project due diligence) by 20 February 2022 and issuing 5,000,000
Galileo shares to the Vendors. These conditions were met by the Company.
Statunga retains a 25% interest in the Project.

If a decision to mine is made by Galileo, then the parties will be entitled to
fund pro rata to their beneficial interest in the JV Company. Any funding
shortfall by the Vendors will be recovered from subsequent mine production.

 

Technical Sign off

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 and CEO of Galileo  Resources Plc, with
more than 40 years' experience mainly in hard rock mining. Mr Bird has
reviewed and approved this announcement.

 

 

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.

 

 

 

 

 

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").

 

 

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