REG - Galileo Resources - Update on Afrimat Option regarding Glenover

Galileo ResourcesAnnouncement

20/10/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221020:nRST4789Da&default-theme=true

RNS Number : 4789D  Galileo Resources PLC  20 October 2022

 

For immediate release

 

20 October 2022

Galileo Resources Plc

("Galileo" or "the Company")

Update on Afrimat Option to sell shares in Glenover

 

Galileo Resources plc ("Galileo "or the "Company") further to its
announcements on 9 December 2021 11 February 2022, and 30 March 2022 is
pleased to announce that JSE listed Afrimat Limited (JSE : AFT) ("Afrimat")
has given notice to Glenover Phosphate Proprietary Limited ("Glenover") in
which Galileo now has a 30.7% direct and 4.99% indirect investment held via
Galagen Proprietary Limited who is the BEE partner in Glenover, that Afrimat
wish to conditionally acquire 100% of the shares in Glenover from the current
shareholders of Glenover for consideration of ZAR300 million (approximately
GBP14.6 million) (the "Glenover Consideration") (the "Glenover Acquisition").
 Capitalised terms defined in these previous announcements have the same
meaning in this announcement unless indicated to the contrary.

 

 

Highlights:

 

·    The Company's wholly owned South African subsidiary Galileo Resources
SA (Pty) Ltd's share of the Glenover Consideration is approximately ZAR 107
million (approximately GBP 5.2 million). The Company has elected to receive
its share of the Glenover Consideration in cash rather than Afrimat shares.

 

·    The Glenover Acquisition is the second phase of the Glenover
Agreements whereby Afrimat has already acquired Glenover's Phosphate Inventory
Deposits and Vermiculite Mining Rights and is now acquiring 100% of Glenover.
The Company has already received approximately GBP2.9M from the first phase
being GBP2.4M from the Glenover Unconditional Asset Sale (see 11 February 2021
announcement) and GBP523K from the Vermiculite Mining Right Consideration (see
30 March 2022 announcement).

 

·    The remaining suspensive conditions of the Glenover Acquisition are
a) approval from the South African Department of Mineral Resources and Energy
("DMRE") in terms of section 11 of the South African Mineral and Petroleum
Resource Development Act No. 28 of 2000 and b) South African Competition
Commission approval.

 

Colin Bird Chairman & CEO said:

" We are very pleased that the Afrimat Board has decided to proceed with the
Glenover Acquisition. Upon completion of the Glenover Acquisition the
Company's share of the Glenover Consideration will be approximately GBP 5.2
million which will be a welcome addition to the Company's treasury in a market
which is not currently that favourable for fundraising for exploration
companies. On behalf of the Galileo Board, I would like to recognise the
professionalism and quality of the extensive test work conducted by Afrimat
and to wish Afrimat every success in the future with the Glenover's Phosphate
and rare earths business."

 

Further Information on the Glenover Acquisition:

 

In the event that either or both the suspensive conditions are not fulfilled
by 31st July 2023, interest at the South African Reserve Bank Prime rate less
2% will be payable on the remaining purchase consideration of ZAR 300 million
from 1st August 2023 until the suspensive conditions are fulfilled or waived,
as applicable, prior to the longstop date of 30 April 2024.

 

 

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's announcement in relation to the Asset Sale Agreement
and the Option Agreement can be found at their website
https://www.afrimat.co.za/ (https://www.afrimat.co.za/)

 

 

Further information on the Glenover Acquisition : The Company has a 30.7%
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 recognised in its accounts for the year ended 31
March 2022 (the "2022 Accounts") in the statement of Comprehensive Income the
net result of Glenover which was a profit of GBP3,433,034. The carrying value
of the Company's investment in Glenover in the 2022 Accounts after taking into
account a dividend of GBP3,000,706 was GBP2,936,125 and its loan to Glenover
is GBP961,509. Accordingly, Galileo anticipates that should the Glenover
Acquisition proceed as anticipated, 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 funds already received from
Glenover, and if received its share of the Glenover Consideration, 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.

 

Transaction Incentive Award:  As announced on 11 February 2022 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 from 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.

 

 

 

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").

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDMLBPTMTTBBJT