20 Oct 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.
· 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/
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.
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For further information, please contact: Galileo Resources PLC
|Colin Bird, Chairman||Tel +44 (0) 20 7581 4477|
|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|
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”).