TIDMGLR
RNS Number : 0426V
Galileo Resources PLC
09 December 2021
For immediate release
9 December 2021
Galileo Resources Plc
("Galileo" or "the Company")
Glenover Assets Sale and
Option to sell shares in Glenover
Galileo Resources plc ("Galileo "or the "Company") is pleased to
provide details regarding;
a. Asset sale agreements entered into between Glenover Phosphate
Proprietary Limited ("Glenover") in which Galileo has a 29% direct
and 4.99% indirect investment held via Galagen Proprietary Limited
who are the BEE partner in Glenover, and JSE Limited listed Afrimat
Limited (JSE : AFT) ("Afrimat") on 8 December 2021 (the "Asset Sale
Agreement"). The Asset Sale Agreements relate to the sale for ZAR
250M (approx. GBP11.64M) of certain deposits of phosphate rock
located at the Glenover Mine ("Inventory Deposits") ("Glenover
Unconditional Asset Sale") and mining rights to mine the
Vermiculite Deposit at the Glenover Mine ("Vermiculite Mining
Rights") ("Glenover Conditional Asset Sale").
b. A conditional sale of shares agreement between Afrimat,
Glenover and the shareholders of Glenover under which Glenover has
the option (the "Afrimat Option") to acquire the sale of shares in
and shareholders loans made to Glenover for ZAR300M ( approx.
GBP14M ) (the "Sale of Shares Agreement") which is expected to
complete by 15 June 2023 if the option is exercised.
The agreements hereinafter being referred to as the ("Glenover
Agreements").
Colin Bird Chairman & CEO said:
"Galileo originally invested in Glenover in 2012 and this
agreement is testament to the hard work of the Glenover management,
our local shareholder Ferminore Proprietary Limited, and BEE
partner Galagen. The Acquirer Afrimat, is a well respected South
African mining group, who have carried out extensive critical
testwork and due diligence, before proposing this acquisition. We
wish them well with this. The succesfull completion of this
transaction is a good example of how local South African groups can
successfully work with an experienced international partner
creating value for all parties and an asset that can be taken on
for further development by an established South African mining
group. I would also like to thank the Galileo shareholders for
their patience and support."
As further detailed below on completion of the;
a. Asset Sale Agreement the value to Glenover will be ZAR250
million (approx.. GBP11.64M) which after taxes, costs and working
capital requirements it intends to distribute to to the Glenover
shareholders; and
b. Sale of Shares Agreement the value to the Glenover
shareholder will be a further ZAR300M (approx. GBP14M).
Galileo has a 29% direct shareholding in Glenover and a 4.99%
indirect shareholding held via Galagen Proprietary Limited who are
the BEE partner in Glenover.
Highlights of Glenover Unconditional Asset Sale
Consideration i) ZAR 215.1M for the ("Inventory Deposits")
payable the ("Inventory Consideration").
to Glenover
========================== ======================================================
Payment of Unconditional Inventory Consideration to be paid by Afrimat
Asset Sale Consideration in cash to Glenover within 15 business days
of the signature date of the Asset Sale Agreement.
========================== ======================================================
Effective Date The effective date is the signature date of
Asset Sale Agreement.
========================== ======================================================
Distribution Glenover intends to make a cash distribution
of Unconditional to its shareholders from the Inventory Consideration
Asset Sale Consideration and the IP Consideration having made provision
to Glenover shareholders for South African Income Tax @ 28%, transaction
costs and bonuses and having retained sufficient
funds for 12 months working capital requirements
at the time of the distribution to meet South
African companies law solvency requirements
("Provisions Prior to Paying Dividend") . The
final amount and timing of this distribution
has not been finalised but is expected, subject
to advice, to be around ZAR145M (approx. GBP6.8M)
before 28 February 2022 of which Galileo's
29% share would be approximately ZAR42M (approx.
GBP1.97M). Any proceeds received in respect
of Galileo indirect 4.99% interest are subject
to agreement with Galagen Proprietary Limited
and will be notified at the time, as applicable.
========================== ======================================================
Highlights of Glenover Conditional Vermiculite Mining Right
Sale
Consideration ZAR 34.9M to acquire the Vermiculite Mining
payable Right (the "Vermiculite Consideration").
to Glenover
=========================== =======================================================
Settlement of The Vermiculite Consideration is at Glenover's
Vermiculite Consideration election to be settled in cash or Afrimat shares
based on the 30 days' volume weighted average
price ("VWAP") at which Afrimat shares traded
on the JSE Limited on the relevant Effective
Date. The Afrimat shares issued to settle the
Vermiculite Consideration will not be subject
to any sale restrictions.
=========================== =======================================================
Sale of Assets a) by no later than 15 June 2022, the mining
Outstanding Conditions right to mine certain minerals on the property
known as Farm Glenover 371 L.Q. (the "Mining
Right") has been granted to Glenover; and
b) by no later than 15 June 2022, the Water
Use License Application ("WULA") has been granted
and a period of 30 days have lapsed since the
date of grant of the WULA without any appeal
having been lodged against the grant thereof.
"Sale of Assets Outstanding Conditions"
=========================== =======================================================
Effective Date The effective date of the sale of the Vermiculite
Mining Right shall be the first day of the
month following the month in which the last
of the Sale of Assets Outstanding Conditions
has been fulfilled, which is anticipated as
being 1 July 2022.
=========================== =======================================================
Distribution Glenover intends to make a distribution in
of Vermiculite specie of Afrimat shares to its shareholders
Consideration from the Vermiculite Consideration having made
to Glenover shareholders provision for South African Income Tax @ 22.4%,
transaction costs and bonuses and having retained
sufficient funds for 12 months working capital
requirements at the time of the distribution
to meet South African companies law solvency
requirements. The final amount and timing of
this distribution has not been finalised but
is expected, subject to advice, to be around
ZAR35M (approx.. GBP1.6M) of which Galileo's
29% share would be approximately ZAR10M (approx.
GBP470K). Any proceeds received in respect
of Galileo indirect 4.99% interest are subject
to agreement with Galagen Proprietary Limited
and will be notified at the time, as applicable.
=========================== =======================================================
Highlights of Share Sale Agreement
Consideration ZAR300M (approx. GBP 14M) to acquire from the
payable to Glenover Glenover shareholders all the shares of and
shareholders sale claims to Glenover (the "Glenover Shares")
(the "Sale Shares Consideration"). Galileo
Resources SA (Pty) Ltd, the Company's wholly
owned South African subsidiary, share of the
Sale Shares Consideration is ZAR102M (approx.
GBP4.78M).
===================== =======================================================
Settlement of a) 50% of the Sale Shares Consideration shall,
Consideration at the election of Afrimat, be split between
payable to Glenover Afrimat shares based on the Afrimat 30 day
shareholders 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
b) 50% of the Sale Shares Consideration shall,
at the election of the Sellers, 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).
Any Afrimat shares issued to settle the Sale
Shares Consideration will not be subject to
any sale restrictions.
===================== =======================================================
Afrimat Option Afrimat has at its sole discretion until 15
Period June 2022 or, if an extension has been granted
by 10 November 2022, to exercise their option
to acquire the Glenover Shares.
===================== =======================================================
Conditions Precedent a) by no later than 15 June 2022 the issue
of a mining licence to Glenover (the " Mining
Right");
b) by no later than 15 June 2022 the Water
Use License Application ("WULA") has been granted
and a period of 30 days have lapsed since the
date of grant of the WULA without any appeal
having been lodged against the grant thereof;
c) by no later than 28 February 2023 the approval
in terms of the Competition Act No. 89 of 1998,
if required, has been granted, either unconditionally
or subject to conditions which have been approved
in writing by Afrimat;
d) by no later than 31 May 2023 the consent
of the Minister of the Department of Mineral
Resources and Energy for the application in
terms of Section 11 of the Mineral and Petroleum
Resources Development Act No. 28 of 2002, has
been granted, either unconditionally or on
terms and conditions which are reasonably acceptable
to Afrimat;
e) by no later than 15 June 2022 the shareholders
of the Company (to the extent required by the
AIM Rules) have approved the Share Sale Agreement;
f) Afrimat has at its sole discretion have
exercised the Afrimat Option to acquire or
not to acquire 100% of the issued share capital
of Glenover, exercisable at the sole discretion
of Afrimat by 15 June 2022 or, if an extension
has been granted by 10 November 2022; and
g) by no later than 15 June 2022, the approval
of the amended Glenover's memorandum of incorporation
by Glenover, Afrimat and the Shareholders is
obtained to be filed with the CIPC;
(the "Sale of Shares Outstanding Conditions").
===================== =======================================================
Effective Date The effective date of the Sale of the Glenover
Shares shall be the first day of the month
following the month in which the last of the
Sale of Shares Outstanding Conditions is fulfilled
or waived, which is anticipated as being 1
July 2023.
===================== =======================================================
Additional Information on Afrimat: Afrimat is a leading black
empowered Group with its main business and core competence in open
pit mining. It is listed on the 'Construction and Materials' sector
of the JSE Main Board since 2006. The group supplies a broad range
of products ranging from Construction Materials (aggregates,
bricks, blocks, pavers and readymix concrete), Industrial Minerals
(lime and lime products) and Bulk Commodities (iron ore and
anthracite). Afrimat Afrimat's announcement in relation to the
Asset Sale Agreement and the Option Agreement can be found at their
website https://www.afrimat.co.za/
Further information on Assets the subject of the Share Sale
Agreement: The Company has a 29% direct shareholding in Glenover
and an indirect investment of 4.99% in Glenover held through its
shareholding in Galagen. The investment in Glenover is treated in
the Company's accounts as a minority investment in a joint venture
as such the Company recognises in its statement of Comprehensive
Incone the net result of Glenover which was a loss of GBP9,088 in
its accounts for the year ended 31 March 2021 (the "2021
Accounts"). The carrying value of the Company's investment in
Glenover in the 2021 Accounts is GBP1,979,640 and its loan to
Glenover is GBP335,390. Accordingly, Galileo anticipates that
should the all parts of the disposal proceed as antificpated, it
will record a profit on disposal in its accounts for the relevant
reporting period, which will be determined at that time.
Use of funds: The Company intends to use the dividends received
from Glenover, and if Afrimat exercise their option under the Share
Sale Agreement, the sale proceeds from the sale of its Glenover
shares, less any associated tax liabilities as working capital of
the Company to support expenditure on the Company's existing
projects, ongoing corporate costs and / or for further acquisitions
in the mining sector.
Intention regarding Afrimat shares: The Company intends to hold
any Afrimat shares it receives by way of dividend from Glenover
arising from the Vermicilite Consideration and / or the sale of
Glenover Shares as a current asset investment.
Decision on settlement of share of Sale of Shares Consideration:
The Company will based on market conditions at the time of
completion of the Share Sale Agreement make a decision as to
whether to receive a portion of 50% of the Sale of Shares
Consideration in Afrimat Shares or cash.
Transaction Incentive Award: Further to the approval granted at
the Company's AGM on 25 October 2021 the Company intends to make
awards in relation to the Glenover Agreements transaction (the
"Transaction") based on criteria determined by the remuneration
committee. The maximum transaction award payable in relation to the
Transaction will be 2% of the Transaction value and be allocated
amongst the eligible participants by the remuneration committee.
Awards may be paid in cash and/or Company shares and if in Company
shares based on the 30-day VWAP following the date the Company
announces the Transaction.
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
Roland Cornish/James Biddle 3396
================================== ======================
Novum Securities Limited - Joint
Broker
Colin Rowbury /Jon Belliss +44 (0) 20 7399 9400
================================== ======================
Shard Capital Partners LLP - Tel +44 (0) 20 7186
Joint Broker 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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END
DISFSMFWAEFSEIE
(END) Dow Jones Newswires
December 09, 2021 02:00 ET (07:00 GMT)
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