TIDMGLR
RNS Number : 2787C
Galileo Resources PLC
27 June 2016
For immediate release
Galileo Resources PLC
AIM: GLR
27 June 2016
Galileo Resources Plc
("Galileo" or "the Company")
GALILEO EXECUTES EARN-IN AGREEMENT TO FARM OUT SILVERTON GOLD
PROPERTY IN NEVADA USA
Galileo is pleased to announce that it has executed an Earn-In
Agreement ("Agreement") with Orogen Gold plc ("Orogen") following
completion of Orogen's due diligence covering the Silverton
gold-silver property ("Property") in Nevada, USA, as envisaged
under the terms of a previously signed Term Sheet announced in an
RNS on 21 April 2016. Orogen will have the right to earn-in to an
initial 51% interest in the Property by way of exploration
expenditure of US$400,000 within 18 months and thereafter the
possibility to spend an additional US$1,500,000 within 30 months to
earn-in a further 24% interest, in total 75%, in the Property.
Galileo will have the right to participate pro rata after
Orogen's initial 51% earn-in; should it exercise this right it
would retain a 49% equity interest in the Property. Refer to
Summary of Terms of Agreement below for further details.
Highlights
-- Galileo executes Earn-In Agreement following Orogen's successful due diligence
-- Orogen has the right to earn an initial 51% interest in the
Silverton Property over the 6km(2) claim area through exploration
spend of US$400,000 over 18 months
-- Orogen may earn an additional 24% interest in the Property
through a further exploration spend of US$1.5 million over a
subsequent 30 month period
-- Galileo retains the right to participate pro rata after Orogen's initial 51% earn-in
-- Property site visit identifies new target with historic
silver/gold workings along cross structure
-- Orogen commences focussed re-mapping and sampling programme
to confirm sites for an initial diamond drilling phase
-- Farm-out in line with Galileo's strategy of focusing its
available resources on its South African copper project.
Andrew Sarosi, executive director commented: "We are pleased to
have concluded this agreement with Orogen, which allows for an
outside party to fund the exploration of Silverton. Orogen's due
diligence, which included a site visit with Galileo, has already
identified additional targets not only to the shear zone reported
previously but also to targets not highlighted in the most recent
reports and adds to the Company directors' belief in the overall
prospectivity of the Property. Further news will be released as
results from initial drill testing become available."
The Property
The Property comprises a block of 72 lode claims covering about
6km(2) located northeast of Tonopah, Nevada USA, where historic
exploration has discovered widespread gold mineralisation in a very
prospective geological and structural setting. For more technical
details regarding the Property please refer to the RNS announcement
of 21 April 2016.
Summary of Terms of Agreement
First Earn-In
-- Orogen shall spend US$400,000 on Exploration Expenditure
within 18 months from the signature date of the Agreement to
include a drilling component. On completion, Orogen will have a 51%
undivided interest in the Property with Galileo holding the other
49% interest. If the full amount is not spent on exploration within
the required period then Orogen shall have the right to transfer
any shortfall in expenditure on the Property and such transfer will
form part of the earn-in expenditure, provided that the shortfall
does not exceed US$100,000. Any funds thus transferred will be used
exclusively for approved exploration to complete the First
Earn-In.
-- If Orogen by does not complete the Earn-In, or within 30 days
of, the end of first Earn-In period, then the Agreement shall be
dissolved, with no recourse by Orogen to investment capital and
payments made.
Second Earn-In
-- Orogen may spend a further US$1,500,000 on exploration
expenditure within 30 months commencing within 30 days of
completion of the First Earn-in to earn a further 24% undivided
interest in the Property, giving Orogen an aggregate 75% interest
in the Property, at which point Galileo shall have a 25% interest
in the Property. However Galileo shall have the right at its
election to contribute pro rata to expenditure during the Second
Earn-In to maintain its 49% interest in the Property.
-- If Orogen continues to sole fund during the Second Earn-In
and the full amount is not spent on exploration within the required
period then Orogen shall have the right to transfer any shortfall
in expenditure on the Property and such transfer will form part of
the Earn-In expenditure, provided that the shortfall does not
exceed US$200,000. Any funds thus transferred will be used
exclusively for approved exploration to complete the Second
Earn-In. If Orogen spends a minimum of US$1,000,000 during the
Second Earn-In period, but does not complete the full Earn-In
expenditure, then it will earn a pro-rata additional interest in
the Property. If Orogen fails to spend the minimum US$1,000,000
during the Second Earn-In period then its interest shall remain at
51%.
-- On completion of the First or Second Earn-In the parties may
form a JV, pro rata their interest in the Property with contractual
terms in line with this Agreement. The JV shall aim to advance and
develop the Property towards commercial production including but
not limited to bankable feasibility study. If either Party elects
not to contribute pro rata its interest in the JV to production,
such non-contributing Party's interest in the JV shall be subject
to a straight-line dilution to a minimum 5% interest in the JV, at
which time the non-contributing Party's interest shall be converted
to a 5% net profit (before tax) interest.
-- Orogen, during First Earn-In and Second Earn-In shall be the
Operator of all exploration work on the Property as long as it
meets its requirements under the Agreement
-- Orogen and Galileo may assign or sell all or parts of their
interest under the Agreement to any third party subject to the
first right of refusal of the non-assigning Party, on the same
terms and conditions of assign or sale to the third party.
-- Orogen may in its sole discretion terminate this Agreement at
any time by giving not less than 30 (thirty) days prior written
notice to that effect to Galileo.
Technical Sign-Off
Andrew Sarosi, Executive Director of Galileo, holds a B.Sc.
Metallurgy and M.Sc. Engineering, University of Witwatersrand, is a
member of The Institute of Materials, Minerals and Mining and is
'qualified person' as defined under the AIM Rules for Companies and
a competent person under the reporting standards. He has approved
the release of this announcement.
About Galileo
Galileo Resources plc is a UK public company quoted on the
London Stock Exchange AIM . The Company is focused on mineral
exploration and development and is currently focussing on the
Concordia copper project in the renowned O'kiep Copper District of
South Africa. The Company has undertaken and continues to review
and independently model the extensive historical data on the area,
in which eleven prospective copper areas have been identified to
date and of which five demonstrate considerable near-surface
potential.
Further details are available from the Company's website:
www.galileoresources.com, including its Nevada gold-copper
properties in the USA, its Glenover rare earth and phosphate
project and the Concordia copper project respectively in the
Limpopo and Northern Cape Provinces of South Africa. A copy of this
announcement is also available on the website.
You can also follow Galileo on Twitter: @GalileoResource
For further information, please contact:
Andrew Sarosi, Executive Tel +44 (0) 1752 221937
Director /020 7584 2155
Beaumont Cornish Limited Tel +44 (0) 20 7628 3396
- Nomad
Roland Cornish/James Biddle
Beaufort Securities Limited - Broker Tel +44 (0) 20 7382 8416
Jon Belliss
This information is provided by RNS
The company news service from the London Stock Exchange
END
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