REG - Galileo Resources - Glenover Assets Sale and Star Zinc Update

Galileo ResourcesAnnouncement

11/02/2022 07:00

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RNS Number : 3625B  Galileo Resources PLC  11 February 2022

 

For immediate release

 

11 February 2022

Galileo Resources Plc

("Galileo" or "the Company")

Glenover Assets Sale and

           Star Zinc Update

 

Galileo Resources plc ("Galileo "or the "Company") is pleased to provide an
update regarding a) the Glenover Asset sale between Glenover Proprietary
Limited ("Glenover") and JSE Limited listed Afrimat Limited announced on 9
December 2021 and b) the sale of Star Zinc project to Siege Mining Limited
("Siege") announced on 4 March 2021. Capitalised terms defined in these
previous announcements have the same meaning in this announcement unless
indicated to the contrary.

 

Highlights:

 

·    The Company has received ZAR50.7M (approx. £2.4M) from the Glenover
Unconditional Asset Sale (including the amount due through the Company's
indirect holding via Galagen Proprietary Limited);

 

·    The Company has received royalties due to it under the Star Zinc sale
agreement of US$118K (approx. £86K) from the 1st three shipments and is due a
further US$460K (approx. £335K) from shipments which are subject to final
weights and assays.

 

Colin Bird Chairman & CEO said: "This marks the start of earnings from the
Star Zinc operation, which are progressing and will continue exporting more
material. Our Kashitu operation will shortly be drilled with a view to a
similar operation as Star Zinc but under Galileo's control for Galileo benefit
other than 3(rd) party costs related to the Kashitu operation. I am pleased
that the Company has received the first distribution of approximately £2.4M
from the Glenover Asset Sale and look forward to the Company potentially
receiving approximately a further £470K from Glenover's conditional sale of
its Vermiculite Mining Rights and £4.78M if Afrimat exercises its option to
acquire Glenover."

 

 

 

Glenover Sale

 

As previously announced the Company has a 29% direct and 4.99% indirect
investment in Glenover held via Galagen Proprietary Limited who are Glenover's
BEE partner and is potentially due the following further consideration under
the Glenover Sale Agreements;

 

a)   ZAR10M (approx. £470K) by way of distribution by Glenover in relation
to the conditional sale of Vermiculite Mining Rights by Glenover (the
"Vermiculite Mining Right Consideration") which is conditional on i) the
mining right to mine certain minerals on the property known as Farm Glenover
371 L.Q. (the "Mining Right") being granted to Glenover by 15 June 2022; and
ii) by no later than 15 June 2022, the Water Use License Application ("WULA")
having 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 of
the WULA; and

 

b)   ZAR102M (approx. £4.78M) being its portion of the share sale proceeds
due under the Glenover Share Sale Agreement (the "Sale Shares Consideration")
which is conditional on Afrimat by 15 June 2022 or, if an extension has been
granted by 10 November 202 exercising their option to acquire the Glenover
Shares.

 

Glenover has the right to elect for the Vermiculite Mining Right Consideration
to be paid in cash or Afrimat Shares based on the 30 days volume weighted
average price of brackets VWAP close brackets at which Africa shares traded on
the JSE limited on the effective date.

 

The Sale Shares Consideration will be in a combination of cash and Afrimat
shares;

 

·    50% of the Sale Shares Consideration shall, at the election of
Afrimat, be split between Afrimat shares based on the Afrimat 30 day 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

·    50% of the Sale Shares Consideration shall, at the election of the
Sellers (which includes the Company), 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).

 

Colin Bird the Chairman of Galileo has waived in favour of the Company the
bonuses awarded to him by Glenover in his capacity as a director of Glenover
of 1.5% of the gross proceeds of the Glenover Agreements and these amounts
will as received be added to the Transaction Awards previously announced that
will, at the determination of the Company's remuneration committee, be paid as
these transactions are successfully concluded.

 

Star Zinc Sale

 

As previously announced under the terms of the Star Zinc agreement, the
Company is to be paid a royalty on any future sales of zinc from the Star Zinc
Project based on the zinc grade. The minimum royalty rate being 3% and
increasing by 1% for each US$250 increase in the zinc price above US$2,500 per
tonne up to a maximum of 10%.

 

 

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 3396

 Roland Cornish/James Biddle
 Novum Securities Limited - Joint Broker    +44 (0) 20 7399 9400

 Colin Rowbury /Jon Belliss
 Shard Capital Partners LLP - Joint Broker  Tel +44 (0) 20 7186 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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