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Galileo Resources' Glenover rare earth project is "cracking", says chief executive Bird

Shares in Galileo Resources rose 10% today after an interim update on the preliminary economic assessment (PEA) of the firm's Glenover rare earth project in South Africa.
Galileo Resources' Glenover rare earth project is "cracking", says chief executive Bird

Today's interim update on the preliminary economic assessment (PEA) of Galileo Resources' (LON:GLR) Glenover rare earth project in South Africa showed it is a "cracking" project.

So says chairman and chief executive Colin Bird.

He said the findings of initial reports into mine design, modelling work and environmental work - all of which will form part of the pending PEA expected in the first quarter of next year  –  will justify fast-tracking the project into the next stage.

Among today's highlights was the news that re-testing of surface stockpiles has defined additional resources, with the stockpile resource increasing 8% to 2.94mln tonnes from 2.723mln tonnes previously.

In addition, the proposed mine is expected to have a low stripping ratio of 1.5 to 1, and the geotechnical report has indicated strong wall rock competency.

Also, the firm said today that based on metallurgical results so far, it is expected that a high grade marketable rare earth product can be produced.

Investors welcomed the update on the progress of the PEA and shares rose nearly 10% to stand at 29 pence each.

Bird told investors: "We are particularly pleased with the potential increase in tonnage of the stockpiles and that the open pit design is not adversely affected by potential poor rock stability.

“So far, all of the fundamentals that 'make or break' the outcome of this important PEA are particularly positive and we look forward to the completion of the PEA in the new year."

Bird told Proactive he was especially pleased that the work has shown that the rare earths can be processed successfully - either to make a two-stage or one stage concentrate.

"I really did want to satisfy the market that processing, which is generally a fatal flaw to most rare earth projects, isn't on this one. It really is a cracking project," he said.

Galileo currently has a 31.66% interest in the Glenover project and it has the option to acquire up to 73.73%.

The site is a former phosphate mine operated by Goldfields and has a total resource of almost 29 million tonnes at 1.24% rare earth oxides.

Of this, 10.5 million tonnes is higher-grade material at 2% total rare earth oxide.

As stated earlier, around 3mln tonnes are stockpiled materials.

The relatively straightforward nature of the project means it could be up and running in around two years for as little as US$50 million.

Bird said today that inevitably more funds will be needed in the future but that the firm currently had enough to complete this "leg of the exercise" and added that Galileo was getting  a "lot of industry interest" although he gave no further details.

The next stage for its development, explains Bird, will be the pre-feasibility study proper and then straight into the feasibility study.

Another tick for the Glenover project is that it is connected by tarmac road, lies 20 kilometres from a rail line, and has other vital infrastructure nearby such as electricity and water.

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