In January 2016 it signed off on a deal to acquire a 51% interest in the Concordia copper project in the Northern Cape Province of South Africa. The company must spend ZAR10 mln (£500,000) over a 14 month period to earn its stake. It will then have the opportunity to go to an 80% interest by issuing 30 mln Galileo shares to the vendor, local entrepreneur Shirley Hayes.
Galileo followed up this acquisition by raising £375,000 via a placing in early March in order to fund its work commitments.
Chief executive Colin Bird and chairman Richard Wollenberg both took sizeable chunks.
Concordia represents the latest string to the Galileo bow, as the company has taken interests in a number of assets across a range of commodities and jurisdictions. Galileo started out life on Aim primarily as the owner of the Glenover phosphate asset in South Africa. This is now the subject of an agreed US$4mln sale to Fer-Min-Ore, although both parties have just agreed to extend the closing date for the transaction to August.
Since those early days, the company has also gone on to acquire interests in US precious metals exploration assets. The Ferber copper and gold project in Nevada is probably the most promising of these, as its less than 20 kilometres away from a major discovery that’s been made by Pilot Gold (TSE:PLG) at Kinsley Mountain.
But other promising prospects include Gabbs, Silverton, Esmerelda and Crow Springs, all further to the east in the same vicinity, and all prospective for gold.
FROM THE BOSS
Colin Bird scored a notable success in the last mining boom when he packaged up and sold Kiwara and its Zambian copper projects to First Quantum (LON:FQM) for US$260 mln. Whether he can repeat that trick with Galileo remains to be seen. But he notes in commentary on the Nevada portfolio that certain segments of the mining industry are beginning to talk about that area as “the new Carlin Trend.” And, as everyone in mining knows, the Carlin Trend is one of the most prolific gold producing areas in the world.
Meanwhile, on Concordia, he also has high hopes. “Concordia has extremely good prospects for potentially delineating a world class “superpit” copper resource and mine,” he says. He also reckons that major shortfalls in copper supply will begin to show through in 2025, so a little while to wait yet, but perhaps the timing for any development at Concordia will actually be propitious.
“This is a large project in a maturing mining jurisdiction,” he says.
WHAT THE BROKER SAYS
Shard Capital argues that value could be unlocked from Gabbs in the future. “Our early stage internal estimate of revenues that may be available from Gabbs provides evidence that it is a significant asset and well able to support the market’s current valuation.”
The broker goes on: “We believe that it is the right time in the mining cycle to be starting this kind of development work and the equity has attractions for gold watchers and mining fundamentalists alike, but it is definitely not one for the widows and orphans fund.