TIDMGLR
RNS Number : 7790D
Galileo Resources PLC
07 March 2022
For immediate release
07 March 2022
Galileo Resources Plc
("Galileo" or "the Company")
Option Agreement over
Lithium & Gold Projects, Zimbabwe
Galileo Resources plc ("Galileo "or the "Company") is pleased to
provide details regarding an assignment agreement entered into on 4
March 2022 (the "Deed of Assignment") which assigns to Galileo an
option granted under an agreement dated 21 January 2022 between BC
Ventures and Cordoba Investments Limited (the "Principal
Agreement") to acquire a 51% interest in B.C. Ventures Limited ("BC
Ventures") (the "Option"). BC Ventures is the owner of a highly
prospective lithium project in Southwest Zimbabwe (the " Kamativi
Lithium Project" ) and two gold licenses (the "Bulawayo Gold
Project") close to Bulawayo (the "Projects") through its wholly
owned Zimbabwe subsidiary Sinamatella Investments (Private)
Limited.
Technical Highlights
-- Kamativi Lithium Project
The Kamativi Lithium Project comprises EPO 1782 and lies on the
Kamativi Belt directly adjacent to, and along strike from the
historic Kamitivi tin-tantalum mine which operated from 1936 to
1994, where there are active plans by the Zimbabwe Mining
Development Corporation to produce lithium from mine tailings
First-pass grab sampling within the project area by GeoQuest,
who are a fully independent Southern and Central African based
geological consultancy and contracting group, has confirmed
lithium-bearing minerals in pegmatites based on preliminary AAS and
XRD results and the ground is considered highly prospective for
pegmatite-hosted lithium and associated mineral, past exploration
having focussed on tin and tantalum.
There is extensive historical raw and exploration data on the
Lithium Project and work will commence with the objective of drill
testing as soon as targets have been prioritised.
-- Bulawayo Gold Project
The Bulawayo Gold Project comprises EPO 1783 and EPO 1784 and
covers a large 1,300 sq km licence area near Bulawayo with
extensive Greenstone Belt rock formations that are host to many
small to mid-size quartz reef gold mines and deposits in
Zimbabwe.
The Bulawayo Gold Project licences have good prospectivity for
extensions of known gold deposits based on an initial assessment by
Geoquest, as well as new discoveries under thin sand and rock cover
using modern exploration techniques as there has been no systematic
exploration for over 25 years.
Recent grab samples undertaken by Geoquest on the licence area
report assay values ranging from 3.9 - 16g/t Au.
The target is to explore for resources to support the
development of a large scale mine. The licences adjoin and enclose
a number of small scale gold mines on pre-existing mining permits
which provides the opportunity to integrate the production from
these operations which have a total historic production reported as
more than 1Moz Au.
Galileo plans to integrate multiple regional datasets to focus
exploration on drill targets with potential for high-grade 'reef'
deposits and/or bulk mining potential of a cluster of such deposits
.
Transaction Highlights
-- Under the Principal Agreement;
the Option is for Galileo to earn an initial 51% interest in the
Gold and Lithium Projects in Zimbabwe by spending US$1.5m on
exploration and evaluation by 21 January 2024 and paying US$100,000
to BC Ventures by 7 March 2022; and
GeoQuest who are an independent southern and Central African
based geological ( mineral exploration) consultancy and contracting
group will conduct the exploration overseen by the technical
committee which will comprise 2 representatives from Galileo, 2
from BC Ventures and be chaired by one of the Galileo
representatives.
-- Under the Deed of Assignment Galileo will issue 13,741,609
Galileo shares (the "Consideration Shares") based on the 5 day VWAP
on the date of this announcement being 1.1pence to settle
GBP150,000 due to Cordoba for assigning their rights and
obligations under the Principal Agreement containing the Option to
Galileo. The Consideration Shares are subject to the lock up and
orderly market arrangements detailed below.
Colin Bird Chairman & CEO said: " This is a significant
investment for Galileo, in that we have an option to acquire a
controlling interest in what we consider an highly prospective
lithium project in Southwest Zimbabwe. The project is adjacent to
the Kamativi Mine, which produced tin for many years, closing in
1994. The pegmatites in the area are known to contain lithium
bearing minerals, as well as tantalum and tin and the pegmatites
will be the focus of our exploration programme.
In addition, we have an option to acquire a controlling interest
in two gold licences, which are in the midst of small producing
gold mines near Bulawayo, where we have a good understanding of the
structural controls and believe there is a propensity for a
significant new gold discovery, notwithstanding the opportunity to
small scale mine in the short term. This is our first foray into
Zimbabwe, where foreign investment is being welcomed and the
country has excellent potential in many commodities as well as good
infrastructure support."
Summary of Transaction
On 21 January 2022, Cordoba and BC Ventures entered into an
option agreement (the "Principal Agreement") which provided Cordoba
with an option to acquire 51% of BC Ventures by funding
US$1,500,000 of exploration expenditure within 2 years for BC
Venture's 100% owned Zimbabwean subsidiary Sinamatella Investments
(Private) Limited ('Sinamatella') holds three Exclusive Prospecting
Orders ('EPOs') No's 1782, 1783 and 1784 in the Kamativi Regional,
'Bulawayo North' and 'Bulawayo South' areas in the Republic of
Zimbabwe. EPO 1782 is primarily prospective for lithium (tantalum,
niobium, tin, tungsten, REE's and copper) whilst EPO5 1783 and 1784
are primarily prospective for gold. The three EPOs were issued on
12 March 2021 and have a term of 3 years.
On 4 March Galileo entered into a Deed of Assignment with
Cordoba and BC Ventures (the "Deed of Assignment") under which
Cordoba has assigned all its rights and obligations under the
Principal Agreement to Galileo for GBP150,000 which is being
settled by the issue of 13,741,609 new ordinary Galileo Resources
plc shares which will rank pari passu with existing Galileo
Resources plc shares and will be subject to the lock up and orderly
market arrangements described below under the heading Lock up and
orderly market arrangements in relation to the Consideration
Shares.
Kamitivi Lithium Project
Zimbabwe is recognised as one of the most prospective countries
in Africa for pegmatite-hosted lithium. Prospect Resources Ltd
(ASX: PSC) estimates that its Arcadia open pit lithium deposit,
hosted within a stacked series of pegmatite dykes, contains
JORC-compliant proven and probable ore reserves of 37.4Mt, grading
at 1.22% Li O and 121ppm Ta O . China's Zhejiang Huayou Cobalt
recently announced that it had agreed a deal to purchase 100% of
the project for US$422m.
Adjacent to the Lithium Project area, the Kamativi mine operated
from 1936 to 1994, producing 37,000 tonnes of tin and 3,000 tonnes
of tantalum ore from pegmatites. In 2018 Chimata Gold Corp
(Zimbabwe Lithium Company) announced a new JORC (2012) compliant
Indicated Mineral Resource of 26Mt @ 0.58% Li(2) O within the
Kamativi mine tailings, confirming that the mine contained
significant quantities of lithium.
Sinamatella's 520km(2) licence area in western Zimbabwe encloses
extensions and splays of the Kamativi Tin Mine host unit, including
mapped pegmatites. It has been reported by [whom] in [when] that
there are old tin-fluorite workings within the Sinamatella property
and recent grab samples from the west of property report lithium in
old mica-tourmaline workings, confirming the potential for new
lithium discoveries. Little new exploration has been carried out in
the past 25+ years.
The licence area also contains a large extent of the
pre-Cambrian Malaputese Formation which is considered to be
strongly prospective for VMS hosted copper, surrounding the old
Gwaii River Copper Mine and including numerous other copper
prospects and occurrences.
Very good historical raw data and baseline information datasets
exist and are available to be used to advance the Lithium
Project.
Galileo plans to integrate the multiple regional datasets to
focus exploration on recorded zones containing numerous large
pegmatites and quartz veins within the highly prospective Kamativi
Belt, as well as contact zones with surrounding granites and
gneisses with old tin workings.
Bulawayo Gold Project
Zimbabwe has long been a significant gold producer, primarily
from Greenstone Belt quartz 'reef' deposits. The largest current
producer is Caledonia Mining Corporation Plc from its Blanket Gold
Mine , which currently operates at a depth of about 750m below
surface on multiple ore shoots and produced approximately 55,000
ounces of gold in 2019. A new deepening of the mine will raise
production to 80,000 ounces from 2022 and extend mine life. To
date, in excess of 1 million ounces of gold have been produced from
the property.
The Sinamatella contiguous licences cover a large 1,300km(2)
area near Bulawayo in west-central Zimbabwe. They cover highly
prospective Greenstone Belt geology with several past producing
small to mid-size gold mines, with production reported totalling
>1Moz Au, e.g. Queens Group (440,000 oz Au at 6-20g/t), as well
as many smaller occurrences.
Sinamatella's licences enclose the area of these mines, although
some of the mines and advanced prospects are covered by
pre-existing mining permits; however, other known gold mine
prospects and potential strike continuations lie within the
Sinamatella ground.
Gold typically occurs in quartz 'reef' and shear zone settings.
No systematic exploration has been carried out for more than 25
years due to the previously unfavourable investment climate in
Zimbabwe during that time. Prospective areas with thin
sand/alluvial/Karoo basalt cover have never been explored. Recent
grab sampling on the property by GeoQuest reports assays ranging
from 3.9-16g/t Au, confirming the prospectivity of the ground.
As with Kamativi, there is excellent potential for integration
of multiple regional datasets to focus exploration on priority
targets. Galileo will undertake this work through GeoQuest which
has such datasets available and can manage exploration in Zimbabwe
for Galileo.
Summary of Principal Agreement which has been assigned to
Galileo such that the rights and obligations of Cordoba under the
Principal Agreement have been assigned to Galileo
The Principal Agreement was entered into between Cordoba and BC
Ventures on 21 January 2022 and has the following terms:
i. Cordoba was given an exclusive option to earn a 51% interest BC Ventures by;
a. making a payment of US$50,000 within 10 days of signing
(which has been paid) and a further US$100,000 within 45 days of
the Principal Agreement which has not been paid and is due to be
paid by 7 March 2022; and
b. spending a minimum of US$1.5 million (net of any due
diligence, legal, or administrational fees) on exploration works on
the Projects within a maximum of 24 months.
ii. Once the Option has been exercised, BC Ventures and its
Projects shall be re-valued by an independent 3rd party to be
agreed by both parties prior to any new money being raised or
injected into the Company. The original shareholders of BC Ventures
will subsequently contribute pro-rata to exploration funding above
and beyond the initial US$1.5 million or dilute their respective
shareholding in BC Ventures and the Projects via a straight-line
dilution formula.
iii. The original shareholder of BC Ventures shall have the
right, at any time from the date of the agreement, to convert up to
29% of their shareholding in the Company into publicly listed
company shares in accordance with a valuation conducted by an
independent 3rd party to be agreed by the parties. The original
shareholders of BC Ventures will, however, retain a minimum
shareholding of 20% in BC Ventures and the Projects through into
production or sale.
iv. Should a bone fide independent 3rd party offer to acquire BC
Ventures or any of its Projects then both parties shall have 'tag
along and drag along' rights.
v. Neither party may sell its interest in BC Ventures or the
Projects without first offering its interest to the other party
(the 'Offeree'). The Offeree shall have 45 days to exercise its
pre-emptive rights.
vi. A technical and operational management committee will be
formed with 2 representatives from each party and the chairman to
be nominated by Cordoba;
vii. The Parties commit to carrying out all geological (mineral
exploration and evaluation) works in accordance with international
best practice (i.e. with the latest International JORC, N143 101,
SAMBEC or PERC Codes governing the industry) with the work to be
carried out by GeoQuest who are an independent southern and Central
African based geological ( mineral exploration) consultancy and
contracting group.
viii. The Parties agree that should the Projects, at any stage,
fail to meet ongoing prospecting criteria, they will be returned in
their entirety to the original shareholders of BC Ventures.
Summary of Deed of Assignment under which Galileo has been
assigned all Cordoba's rights and obligations under the Principal
Agreement
The Agreement was entered into on 4 March between Cordoba as
Assignor, Galileo as Assignee and BC Ventures as the Continuing
Party the has the following terms:
i. Cordoba assigns to Galileo Cordoba's Future Rights and Future
Obligations under the Principal Agreement
ii. BC Ventures has consented to the assignment and assumption
evidenced by the Deed and confirmed the Principal Agreement remains
in full force and effect;
iii. confirms the initial payment of US$50,000 due under the
Principal Agreement has been paid by Cordoba but the payment of
US$100,000 due on or before 7 March has not been paid;
iv. confirms BC Ventures and Sinamatella are in good standing,
and have no liabilities, and that Sinamatella owns the Project
licences;
v. Recognises that the BC Ventures and the Galileo have various
mining projects and may in the future participate for their own
account in mining projects inside and outside the Republic of
Zimbabwe separate from their participation in the exploration and
development of the Projects and agrees Galileo and BC Ventures
agree to work closely in the utmost good faith towards one another
all projects within 25 kms of the boundary of any of the Projects
shall be registered to Sinamatella and included as an additional
project the subject of the terms of the Principal Agreement
vi. Galileo and BC Ventures agree that the valuation of the BC
Ventures on the date of the Deed of Assignment is US$2,941,176 and
this valuation shall be a starting reference valuation prior to any
new valuation being made as per the Principal Agreement if a) the
original shareholders of the BC Ventures wish to sell up to 29% of
their 49% shareholding in the BC Ventures which is not subject to
the option in the Principal Agreement and b) the Galileo wishes to
purchase up to a 29% shareholding in the BC Ventures from the
shareholders of the BC Ventures.
Consideration under Deed of Assignment : Galileo shall issue to
Cordoba, or its nominees, GBP150,000 of Galileo shares (the
"Consideration Shares") based on the 5 day VWAP of the Galileo's
share price on the date of this announcement.
Lock up and orderly market arrangements in relation to the
Consideration Shares : The Consideration Shares are to be the
subject of the following lock up and orderly market arrangements
and cannot be sold during the lock up periods. During the orderly
market period shall first be offered for sale by the Galileo's
company broker at a price no lower than the shares have traded in
the previous 5 days (the "Nominated Price") and if not sold by the
Galileo's company broker within 10 business days may be sold via
another broker at the Nominated Price or higher.
Percentage of Consideration Lock up period Orderly Market Period
Shares
---------------------------- -------------------- ----------------------
10% No Lock Up Until 4 months from
the Effective Date
---------------------------- -------------------- ----------------------
45% Until 4 months from Until 8 months from
the Effective Date the Effective Date
---------------------------- -------------------- ----------------------
45% Until 8 months from Until 12 months from
the Effective Date the Effective Date
---------------------------- -------------------- ----------------------
Further information in relation to BC Ventures: BC Ventures is
privately owned and registered in the Bahamas and was established
as a mineral exploration (prospect generator) company and has
remained dormant until the current date and has never traded or
operated commercially and owns 100% of Sinamatella Investments
(Private) Limited ("Sinamatella"). Sinamatella was incorporated in
Zimbabwe to apply for mineral exploration licenses and was awarded
Exclusive Prospecting Orders (EPOs) 1782, 1783 and 1784 on 12 March
2021 which are its only assets. Since the issue of the EPOs
Sinamatella have paid the EPO application and initial year's
licence fees of Zimbabwe Dollars 119,896 (approx. US$1,000).
Application to trading on AIM: Application will be made to the
London Stock Exchange for a total of 13,741,609 new Galileo Shares
to be admitted to trading on AIM which rank pari passu to the
existing ordinary shares in the Company. It is expected that
Admission will become effective and that dealings in the new
Galileo Shares will commence at 8.00 a.m. on or around 10 March
2022.
On Admission, 1,110,688,453 Ordinary Shares (the "Enlarged Share
Capital") may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in, Galileo under the Financial Conduct Authority's
Disclosure Guidance and Transparency Rules.
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
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").
Technical Glossary
"Au" Gold
"basalt" A fine-grained volcanic rock with low silica
content
"fluorite" A mineral of composition CaF2 common in some
base metal deposits
"gneiss" Metamorphic rock, often of granitic origin
"granite" A medium to coarse grained granular acid intrusive
rock
"Greenstone Belt" Zones of variably metamorphosed mafic to ultramafic
volcanic sequences with associated sedimentary
rocks that occur within Archaean and Proterozoic
cratons between granite and gneiss bodies
"Indicated Mineral That part of a Mineral Resource for which
Resource" quantity, grade (or quality), densities, shape
and physical characteristics are estimated
with sufficient confidence to allow the application
of Modifying Factors in sufficient detail
to support mine planning and evaluation of
the economic viability of the deposit. Geological
evidence is derived from adequately detailed
and reliable exploration, sampling and testing
gathered through appropriate techniques from
locations such as outcrops, trenches, pits,
workings and drill holes, and is sufficient
to assume geological and grade (or quality)
continuity between points of observation where
data and samples are gathered (JORC 2012)
"Karoo" Sequence of rocks of Palaeozoic to Mesozoic
in age, defined in southern Africa
"mica" A platy, flexible mineral which is a common
constituent of igneous and metamorphic rocks
"Mt" Million Tonnes
"ore-shoots" High-grade mineral zones, usually occurring
as steeply-dipping zones along veins or faults
"pegmatite" Very coarse-grained igneous rock which commonly
occurs as dykes in granite intrusions
"Pre-Cambrian" Referring to the period in Earth's history
before 570 million years ago
"Probable Ore Reserve" A 'Probable Ore Reserve' is the economically
mineable part of an Indicated, and in some
circumstances, a Measured Mineral Resource.
The confidence in the Modifying Factors applying
to a Probable Ore Reserve is lower than that
applying to a Proved Ore Reserve (JORC 2012)
"Proved Ore Reserve" A 'Proved Ore Reserve' is the economically
mineable part of a Measured Mineral Resource.
A Proved Ore Reserve implies a high degree
of confidence in the Modifying Factors (JORC
2012)
"quartz" A mineral composed of silicon dioxide, SiO2.
"reef" Mineralised rock, particularly gold bearing
quartz.
"shear zone" Plane of failure in faulted body of rock
"tourmaline" Silicate mineral containing sodium, aluminium
and boron
"VMS" Volcanogenic Massive Sulphide - a class of
massive or semi-massive
sulphide deposit hosted in volcanic or volcaniclastic
rocks
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END
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