14th Jan 2016 10:47
LONDON (Alliance News) - Galileo Resources PLC Thursday said it has finalised the joint venture agreement to potentially acquire a large stake in the Concordia copper project in South Africa.
The miner signed a memorandum of understanding with Shirley Hayes ipk (Pty) Ltd back in November to earn-in and acquire up to an 80% interest in the Concordia copper project in the northern Cape province.
Galileo will earn-in 51% of the project for ZAR10.0 million, while a further 29% interest can be acquired through the issue of 30 million shares at the price at the time of issuance in Galileo following completion of the earn-in.
That memorandum has now turned into a formal co-operation and joint venture agreement, but Galileo will still need to secure funding before it can push forward with its ZAR10.0 million investment over a 14-month period, which equates to GBP500,000.
If it acquires that 51% stake, Galileo has the option to set up a joint venture company to own and manage the project, and most importantly operate the project. Beyond that, if it ends up increasing its stake to 80%, Galileo may see that fall to as much 69.39% as the pair would have to introduce a black-economic empowerment partner under South African rules.
Should Galileo elect not to continue with its participation in the project beyond the ZAR10.0 million expenditure, Galileo shall dilute to a 15% beneficial shareholding in the project and joint venture.
Galileo said it has also appointed Minxcon Consulting on Wednesday, a multifaceted independent South African geological and mining consulting group, to review and model the geological data base in order to identify zones with open pittable mining potential.
Concordia is identified to host five potential massive bulk copper mineralized zones within a 10 kilometre radius of each other, and Galileo said a preliminary computer modelling assessment of the Concordia data identifies the opportunity to model surface mineable tonnes and grades "not common in the global mining world".
"Both parties, having completed satisfactory due diligence, have progressed and signed a formal agreement against the salient terms as appended. We are very positive about the project's fundamentals and consequently have immediately appointed a reputable independent geological consulting company to fast track, further modelling of the deposit, design of a suitable open pit and an initial financial assessment. We expect very quickly to position Concordia relative to other major emerging global copper projects," said Chief Executive Colin Bird.
Galileo shares were trading down 5.9% to 1.20 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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