15 Sep Acquisition of Kalahari Copper Belt project
RNS Number : 0184Z
Galileo Resources PLC
15 September 2020
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).
Galileo Resources Plc
(“Galileo” or “the Company”)
Share Purchase Agreement re Acquisition of 100% of Africibum Co Pty Ltd’s interest in its North East Kalahari Copper Belt project, Botswana
Galileo (AIM:GLR), the exploration and development mining company, is pleased to announce the conditional acquisition of 100% of Africibum Co Pty Ltd and its interests in the North East Kalahari Copper Belt project in Botswana.
· Galileo ground position in Kalahari Copper Belt extended to include Quirinus copper-silver prospect with historic shallow drill intercepts
· Three-hole RC drilling programme by previous explorer all intersected mineralisation along 600m soil anomaly, including 4m @ 1.7% Cu, 13g/t Ag and 6m @ 0.9% Cu, 14g/t Ag
· Copper-in-soil anomalies extend for 13.4km in total, much of it untested
· Tenement lies within 15km of major copper-silver discoveries, part of Cupric Canyon Capital’s Khoemacau Project
· Other licences are little explored but believed to be partly underlain by the target host rocks
North East Kalahari Copper Belt Project Acquisition: The Company has entered into a conditional Share Purchase Agreement dated 14 September 2020 to acquire 100% of Africibum Co (Pty) Ltd, incorporated in Botswana (Company number 1828747) (“Africibum”) and its interest in five mining tenements PL366/2018, PL367/2018, PL368/2018, PL122/2020, PL123/2020 and two mining tenement applications in Botswana (the “North East Kalahari Copper Belt Project”) (the “Acquisition Agreement”). The consideration payable by Galileo at Completion of the Acquisition Agreement is a total of a) 42,000,000 fully paid ordinary shares in the Company at a price of 0.779 pence per ordinary share (“Galileo Shares”) comprising i) 35,000,000 Galileo Shares to be issued to Africibum’s ordinary shareholders (the “Sellers”) (“Ordinary Share Consideration”), and ii) 7,000,000 Galileo Shares to be issued to one of the Sellers in relation to the reimbursement of costs incurred by Africibum to date (“Reimbursement Share Consideration”) at the same price ;and b) 10,000,000 warrants, with an expiry date two years from the Completion Date of the Acquisition, to acquire Galileo Shares at an exercise price of 2 pence per share which is a an approximate 150 % premium to 0.785 pence being the mid-market closing share price of Galileo Shares on 14 September 2020 (“Warrant Consideration”). The Acquisition Agreement is subject to various Conditions Precedent detailed below being satisfied within a 30 day period and includes completion of satisfactory due diligence by Galileo and Galileo and Africibum obtaining necessary regulatory approvals or waivers and shareholders approvals pursuant to the AIM Rules or any other laws or statute.
Colin Bird, Executive Chairman and CEO of Galileo, commented:
“I am very pleased that we have been able to conditionally acquire these licences, which are in an area of high prospectivity in the Kalahari Copper Belt. They are part of the Boseto Copper Project surrounds being 15km from the processing area.
The target areas have already been reconnaissance drilled and copper intercepts have been received. The area known prospectivity is some 14km in length and other areas require geophysics and geochemical work before prospectivity establishment.
The proposed Acquisition of this target completes the Company’s Kalahari Copper Belt portfolio and we look forward to exploration in our expanded footprint in the Kalahari Copper Belt which is part of the Northwest Botswana Rift which the USGS in 2015 reported as the world’s most prospective area for yet-to-be discovered sediment hosted copper deposits”
Information of North East Kalahari Copperbelt Project
The area covered by the licences which are subject to the Acqusition Agreement totals 2,241 square kilometres, comprising five issued prospecting licences, namely PL366/2018, PL367/2018, PL368/2018, PL122/2020, PL123/2020 for an area of 1,925 square kilometres and two licence application areas for 315 square kilometres, within the Kalahari Copper Belt in Botswana, where Galileo has already established a large strategic land position and has commenced exploration work.
PL 366/2018 covers a significant portion of the Quirinus Copper‐Silver Prospect, which was discovered in 2007 by ASX-listed Discovery Metals (‘Discovery’). Quirinus was found through soil sampling, which identified copper-in-soil anomalies over a total strike length of 13.4km. Three reverse circulation (RC) holes were drilled at Quirinus in December 2007 with assays being reported on 5 June 2008. The holes investigated a 600-metre section of the geochemical anomaly and all three holes intersected shallow copper‐ silver mineralisation, including QRC166: 4m @ 1.7% Cu and 13g/t Ag from 38m and QRC164: 6m @ 0.9% Cu and 14g/t Ag from 62m. Mineralisation is reportedly similar in nature to that occurring at Cupric Canyon Capital’s (‘Cupric’) Khoemacau Project, comprising the Zone 5, Zone 5 north, Zeta and Plutus deposits, part of which lies just 15km from PL 366/2018. Zone 5 alone has a JORC-compliant Measured, Indicated and Inferred Resource of 91.7 million tonnes @ 2.13% Cu and 22g/t Ag.
At Quirinus, four diamond drill holes were subsequently drilled along strike from the RC holes, however the assay results from these holes were not reported and the original RC intercepts would appear to be significantly under-investigated. This will be a primary focus for Galileo.
PL 367/2018 covers the southwestern half of the Notus Copper‐Silver Prospect, which was also found by Discovery through soil sampling. The anomaly comprises a relatively discontinuous zone of copper enhancement which appears to overlie prospective lithologies. It is considered that the anomaly may be more extensive than outlined to date due to the masking effect of deeper sand cover to the southwest. It appears that little follow-up exploration was carried out on this prospect.
PL 368/2018 at its southeastern boundary adjoins PL040/2018 where the Company is currently undertaking exploration work. Kalahari sand cover is thought to be quite thick in this area, however regional aeromagnetic interpretation suggests that the prospective lithological horizon may extend beneath the sands across a segment of the licence, forming a contiguous target with that being investigated on PL 040/2018.
PL 122/2020 and PL 123/2020 are centrally positioned within the Kalahari Copper Belt, however current information would suggest that the target horizon has been eroded and only lower stratigraphic levels are represented. Information on these will be further reviewed once the licences are granted to see if the target stratigraphy may, in fact, occur on the ground.
The two application areas are located on the unexplored periphery of the Kalahari Copper Belt and are predominantly covered by recent Karoo basalt flows, obscuring the target horizon, which is believed to lie beneath. Basalt cover is not thought to be very thick and consideration will be given to undertaking an airborne EM survey which is believed may be capable of identifying hidden targets for follow-up drill testing.
Project Background – Kalahari Copper Belt (‘KCB’)
The KCB, approximately 800km long by up to 250km wide, is a northeast-trending Meso- to Neoproterozoic belt that occurs discontinuously from western Namibia and stretches into northern Botswana along the northwestern edge of the Paleoproterozoic Kalahari Craton. The belt contains copper-silver mineralisation, which is generally stratabound and hosted in metasedimentary rocks of the D’Kar Formation near the contact with the underlying Ngwako Pan Formation. The hanging wall-footwall redox contact is a distinctive target horizon that consistently hosts copper-silver mineralization in fold-hinge settings. The geological setting is similar to that of the major Central African Copper Belt and Kupferschiefer in Poland.
In most of Botswana the KCB is covered by 2m to 60m of Tertiary age Kalahari Group sands. The sand cover impacts general surface geological mapping and geochemistry and most information is obtained from soil geochemistry, trenching and especially geophysical surveys and drilling.
Known deposits generally occur at the contact of the low and medium intensity magnetic features and are spatially associated with elongated, magnetic dome features. Magnetic domes represent volcanic basement rocks interpreted to be the source of copper mineralisation.
The KCB has been investigated in detail by a number of companies over recent years, which has resulted in the discovery of several copper-silver prospects and deposits. Larger prospects have been identified by Cupric and Sandfire Resources (‘Sandfire’ – previously MOD Resources). Cupric’s Khoemacau-Boseto Project comprises several zones of copper-silver mineralisation over a 4km strike and extending to greater than 1,200m depth. A JORC-compliant sulphide resource has been established at a 1.0% Cu cut-off totalling 91.7Mt @ 2.13% Cu and 21.9g/t Ag. The mineralization comprises predominantly bornite, chalcocite, and chalcopyrite. Discovery’s Boseto mine closed in 2015 and was purchased by Cupric to be amalgamated with that company’s adjacent Khoemacau property. In total, the Khoemacau and Boseto assets combined are reported to have 500Mt of resources grading 1.4% Cu and 17g/t Ag. Cupric is currently planning development of an underground mine at the project and, in July 2019, announced signing of a US$650 million project funding package.
Sandfire’s licences are located southwest of the Khoemacau Project in the central portion of the KCB. Their T3 deposit has previously reported Indicated and Inferred resources of 60.2Mt @ 0.98% Cu & 14g/t Ag and an optimised feasibility study is in progress. Recent drilling at their A4 Dome (Tshukudu) project returned intercepts up to 18m at 5.2% Cu and 124g/t Ag from 77m down-hole. The latest drilling has increased the known strike length of the vein-hosted mineralisation to over 700m, with the zone remaining open.
Prospecting Licences: Prospecting licences are issued for three (three) years with two (two) options to renew, each period not exceeding two (two) years and applications for renewal should be lodged no later than three (3) months before the expiry of a licence. PL366/2018. PL367/2018 and PL368/2018 were issued on 1 October 2018 and expire on 1 September, PL122/2020 and PL123/2020 were issued on 31 August 2020 and expire on 30 August 2023.
The information on the North East Kalahari Copperbelt Project has been sourced from an independent geologist report dated July 2020 prepared by Dr. Quinton Hills (prior to his appointment as a member of Galileo’s senior management) for Africibum Co (Pty) Ltd and historic announcements of ASX-listed Discovery Metals Ltd issued in 2008
Key terms of the Acquisition Agreement
Consideration: The consideration due on completion the Acquisition Agreement is as follows:
a) the issue of 35,000,000 Galileo Shares to be issued on the Completion Date, subject to the voluntary escrow provisions described below (Ordinary Share Consideration);
b) the issue of 7,000,000 Galileo Shares to be issued on the Completion Date (Reimbursement Share Consideration);
c) the issue of 10,000,000 warrants to acquire Galileo Shares exercisable at GBP 0.02 with an expiry date which two (2) years from the Completion Date (Warrant Consideration);
d) Net Smelter Royalty:
a. the granting of a 1.5% Net Smelter Royalty (NSR) to the Africibum shareholders. The Company has the right to acquire the NSR from the Sellers at any time for total consideration of £1.5 million, which can be payable in Galileo Shares or cask at the absolute election of the Company; and
b. In the event that the Company chooses to buy back the NSR by the issue of Galileo Shares, it shall do so by issuing Galileo Shares calculated at a price per share equal to the volume weighted average price of Galileo Shares during the period of 30 days prior to the date upon which the Galileo Shares are to be issued.
Conditions Precedent: Completion of the Acquisition Agreement is conditional upon the satisfaction (or waiver) of the following conditions precedent to be waived or satisfied within 30 days from the signing of the SPA:
1. Due Diligence: Buyer completing legal and technical due diligence investigations in respect of the Seller and the Assets. At all times the Seller will provide the Buyer reasonable access to enable the Buyer to carry out legal and technical due diligence investigations in respect of the Seller and the Assets;
2. Buyer Approvals: Buyer obtaining all necessary regulatory approvals or waivers and shareholder approvals pursuant to the AIM Listing Rules, or any other law or statute (including, but not limited to, England and Wales) and all third-party approvals, consents and necessary documentation required to lawfully complete the matters set out in this agreement;
3. Asset Ownership Status: All the Prospecting Licences and Prospecting Licence Applications relevant to the Assets as described in this agreement being validly and legally held by Africibum.
Voluntary Escrow Arrangement: The Ordinary Share Consideration will be held under voluntary escrow restriction periods as follows:
1) Fifteen percent (15%) of the Ordinary Share Consideration will be freely tradeable
upon issue as at the Completion Date;
2) Fifteen percent (15%) of the Ordinary Share Consideration will be escrowed
voluntarily for a period of three (3) months from the Completion Date;
3) Thirty-five percent (35%) of the Ordinary Share Consideration will be escrowed
voluntarily for a period of six (6) months from the Completion Date; and
4) Thirty-five (35%) of the Ordinary Share Consideration will be escrowed voluntarily
for a period of nine (9) months from the Completion Date.
Representations and warranties: The Acquisition Agreement also contains certain commercial and other representations and warranties customary for a transaction of this nature.
Further information on Africibum: Africibum was incorporated as a special purpose vehicle in Botswana as a proprietary limited company with Company number 1828747 on 28 May 2020 and has since that date incurred unaudited costs of approximately A$120,000 (approx. GBP68,000) of costs in relation to the acquisition of and application for mining tenements and geological studies.
Technical information in this announcement has been reviewed by Edward (Ed) Slowey, BSc, PGeo, a consultant to Galileo. Mr Slowey is a graduate 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
Ed Slowey, Executive Director
Tel +44 (0) 20 7581 4477
Tel +353 (1) 601 4466
Beaumont Cornish Limited – Nomad
Roland Cornish/James Biddle
Tel +44 (0) 20 7628 3396
Novum Securities Limited – Joint Broker
Colin Rowbury /Jon Belliss
+44 (0) 20 7399 9400
Shard Capital Partners LLP – Joint Broker
Tel +44 (0) 20 7186 9952
A ‘Mineral Resource’ is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which 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.
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
“Mt” million tonnes
“kt” thousand tonnes
“g/t” grams a tonne
 USGS Scientific Investigations Report 2010-5090 – titled “Qualitative Aassessment of Selected Areas of the World for Undiscovered Sediment-Hosted Stratabound Copper Deposits
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 email@example.com or visit www.rns.com.