TIDMGLR
RNS Number : 8043F
Galileo Resources PLC
23 February 2018
For immediate release
23 February 2018
Galileo Resources Plc
("Galileo" or "the Company")
Star Zinc Project Update
Highlights
-- BMR Group plc ("BMR") notifies Galileo that it has made the
final deferred consideration to Bushbuck Resources Limited ("BRL"),
in relation to BMR's acquisition of the Star Zinc Project ("Star
Zinc")
-- Galileo increases its aggregate beneficial interest in Star
Zinc to 85% from 51% in Star Zinc having expended in excess of
USD250 000 on exploration activities pursuant to the binding Term
Sheet announced 31 August 2017 with BMR ("Term Sheet ")
-- BMR elects not to buy back a 10% interest in Star Zinc from the Company for USD150 000
-- Further to the Company's announcement of 13 February 2018,
the Company ships first batch of drill core samples (first 4 drill
holes) from Star Zinc for assay
-- ZMC formally transfers the Licence from BRL to BMR's
subsidiary Enviro Processing Limited ("EPL")
-- With regard to recent revocation (subject to appeal) of BMR's
separate Kabwe Project's mining licence by the Zambian Mining
Cadastre ("ZMC"), Galileo has been advised that Star Zinc's
exploration licence 19653-HQ-LEL ("the Licence") is not affected at
all and the Company and Star Zinc remain in good standing in this
regard
-- EPL submits an application for renewal of the Licence (for a
further 3 years) and includes an additional block within the
renewal area
-- EPL relinquishes 50% of the Licence area in accordance with the renewal regulations.
-- Subject to ZMC approval, the Star Zinc licence to be
transferred to a joint venture company to be owned 85% by Galileo
and 15% by BMR.
Colin Bird, Chief Executive Officer, said: "The completion of
BMR's acquisition of Star Zinc, together with the Company's
exploration progress represent are positive developments for the
Project. We are continuing with drilling and expect to complete
this phase during March. We expect our first assay results shortly
and will release further assays progressively to the market as soon
as they become available."
Star Zinc Update
Galileo is pleased to announce that BMR Group plc ("BMR") has
notified the Company that it has paid the final consideration
amount (see previous announcement of 5 September 2017) to Bushbuck
Resources Limited in relation to BMR's acquisition of Star
Zinc.
The Company has incurred expenditure in excess of USD250 000 on
exploration activities, including geochemical soil sampling,
permitting, and evaluation and on going drilling. Pursuant to the
Term Sheet, Galileo, on having spent USD250 000 earns in a further
34% beneficial interest to take its aggregate interest to 85% in
Star Zinc, which is to be realised by way of an 85% equity stake in
Enviro Zambia Limited ("Enviro Zambia"), a joint venture company to
be incorporated between BMR and Galileo. Subject to ZMC regulatory
approval, the Star Zinc licence, currently held by BMR's
Zambia-incorporated subsidiary Enviro Processing Limited ("EPL")
will be transferred to Enviro Processing Zambia Limited ("EPZL")
upon its incorporation.
The Company has shipped its first batch of drill core samples
(first 4 drill holes) from its current drilling programme for
assay, results for which are expected during March.
The Company announces further, with regard to recent press and
BMR announcements relating to the revocation of BMR's separate
Kabwe Project's mining licence (the revocation is subject to
appeal) by the Zambian Mining Cadastre, that in the opinion of its
Zambian counsel, the revocation in no way affects Star Zinc's
exploration licence nor the joint venture parties' standing in this
regard.
Note
Pursuant to the Term Sheet, the Company entered into a joint
venture, the terms of which were disclosed in the announcement on
31 August 2017, with BMR, whereby Galileo advanced to BMR
USD591,600 (at an interest rate of 12% per annum) primarily to
enable BMR to finance the initial consideration payable to
Bushbuck. Upon completion of the acquisition of Star Zinc, Galileo
subscribed for a 51% equity stake in Enviro Zambia, which was
satisfied by the cancellation of the aforementioned loan of
USD591,600.
Given that BMR has elected not to exercise its right to buy back
a 10% interest in Star Zinc from the Company, USD100,000 held in
escrow will be released to BMR.
Other highlights of the joint venture include:
- from completion of the 18 month work programme until
completion of a feasibility study, the interest of BMR in Enviro
Zambia shall be free carried; and
- BMR and Enviro Zambia shall enter into an off take agreement
for processing of ore from Star Zinc at Kabwe, such terms to be
determined as soon as reasonably practicable following completion
of the PEA to reflect capacity production of zinc from Star Zinc,
and relevant grade and resource life of the Star Zinc project set
out in PEA, which BMR intends to process in conjunction with its
Kabwe Leach Plant Residues.
About Star Zinc
The Star Zinc project is a historical small scale open pit mine
from where, reportedly, low tonnage, but high grade willemite (a
zinc silicate mineral) was extracted intermittently in the 1950s to
1990s.
The Star Zinc project is located approximately 18km NNW of
Lusaka (see Figure 3.1 below), and is accessible via the tarred
"Great North Road" and a good all weather graded road, with the
journey time from central Lusaka of approximately 30 minutes
(traffic allowing).
There is adequate power, water, rail & telecommunications,
with the International Airport at Lusaka, less than 45 minutes
away.
The Mines and Minerals Development Act No. 7 of 2008, which
grants a Large Scale Prospecting Licence for a maximum of 7 years,
governs the mineral tenement. Recent changes to the Act now
provides for an initial 4 years with a furhter two 3-year
extensions totalling 10 years, with a mandatory 50% reduction of
licence area at the completion of the 1st grant and 2nd grant
periods respectively. The first renewal period initially expired 13
August 2016 but was extended to 13 August 2018.
The Star Zinc Willemite project was mapped in the 1960s by
several geologists of the Northern Rhodesia (now Zambia) Geological
Survey.
At Star Zinc, two main fracture trends are present, one E - W,
and another N - S. Both sets of fractures are nearly vertical and
are irregularly mineralised. Willemite generally replaces the host
rock marbles in the form of massive ore bodies, but it occurs also
in veins
In addition, karstic (pertaining to landscape underlain by
limestone which has been eroded by dissolution, producing ridges,
fissures, sinkholes and other characteristic landforms)
mineralisation and red soils (terra rossa) are locally heavily
mineralised with detrital willemite and supergene zinc minerals.
Zinc values measured in soils at Star Zinc reach up to 15,600 ppm
and are accompanied by the pathfinder elements Ag (silver), Pb
(lead) , Ba (barium), Sb (antimony) and Cd (cadmium). The karst
infill has a zinc (Zn) content up to 45wt.% Zn, up to 35wt.% Fe and
up to 5g/t Ag.
The mineralogical assemblage of Zn nonsulphides includes a whole
number of minerals, but the main economic phases present are
Zn-silicates (willemite, hemimorphite, Zn-bearing clays), Zn- Pb
carbonates (smithsonite, cerussite), hydrated Zn- Pbcarbonates
(hydrozincite, hydrocerussite) and Zn- Mn- Fe- oxides (zincite,
franklinite, gahnite).
Limited independent metallurgical testwork by others has clearly
shown that the willemite present at Star Zinc is amenable to acid
leaching with positive results for two samples tested. Zinc
leaching efficiencies obtained ranged from 89% and 92%. The
testwork indicated polymerisation of dissolved silica in the
leachate.
An independent competent person's report commissioned by BMR
concluded. In summary, the Star Zinc project has good potential to
become a viable project.
-- Note the information about Star Zinc is sourced primarily
from Competent Person's Report for the Star Zinc Project , Zambia;
Wardell Armstrong, January 2016
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
Technical Sign-Off
Andrew Sarosi, Director of Galileo, who holds a B.Sc. Metallurgy
and M.Sc. Engineering, University of Witwatersrand and is a member
of the Institute of Materials, Minerals and Mining, is a "qualified
person" as defined under the AIM Rules for Companies and a
competent person under the reporting standards. The technical parts
of this announcement have been prepared under Andrew's supervision
and he has approved the release of this announcement.
You can also follow Galileo on Twitter: @GalileoResource
For further information, please contact:
Galileo Resources PLC Tel +44 (0) 20 7581
Colin Bird, Chairman 4477
Andrew Sarosi, Executive Tel +44 (0) 1752 221937
Director
Beaumont Cornish Limited Tel +44 (0) 20 7628
- Nomad 3396
Roland Cornish/James Biddle
Beaufort Securities Limited - Broker Tel +44 (0) 20 7382
Jon Bellis/Elliot Hance 8416
Forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"will" or the negative of those, variations or comparable
expressions, including references to assumptions. These forward
looking statements are not based on historical facts but rather on
the Directors' current expectations and assumptions regarding the
Company's future growth, results of operations, performance, future
capital and other expenditures (including the amount, nature and
sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements re ect
the Directors' current beliefs and assumptions and are based on
information currently available to the Directors. A number of
factors could cause actual results to differ materially from the
results discussed in the forward looking statements including risks
associated with vulnerability to general economic and business
conditions, competition, environmental and other regulatory
changes, actions by governmental authorities, the availability of
capital markets, reliance on key personnel, uninsured and
underinsured losses and other factors, many of which are beyond the
control of the Company. Although any forward looking statements
contained in this announcement are based upon what the Directors
believe to be reasonable assumptions, the Company cannot assure
investors that actual results will be consistent with such forward
looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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