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The Big Picture: Progress stepping up at Galileo Resources

Progress has stepped up a gear at Galileo Resources recently with several new potential growth drivers for 2014.
The Big Picture: Progress stepping up at Galileo Resources

Progress has stepped up a gear at Galileo Resources (LON:GLR) recently with several new potential growth drivers for 2014.

News today concerned metallurgy studies at its Glenover rare earth project in South Africa, while last month Galileo revealed a move into gold and copper with a C$4.3mln acquisition in the US.

The Glenover announcement is significant in that it is the culmination of intense testing in 2013 - which analysed processing methods that could be used at the project.

A preliminary economic assessment (PEA) early last year showed the potential for exploiting phosphates alongside rare earths at the site, which has inferred and indicated resources of over 10mln tonnes, of which the company's share is 4.47mln tonnes.

Overall, the project was valued at US$500mln and the PEA said it could produce 167,100 tonnes of mixed high grade rare earth elements over a 24 year mine life.

A major pre-feasibility study level completed in December last year examined a process using nitric acid rather than sulphuric acid, which produced more saleable products.

Studies into project finance using the nitric acid also showed the cost of rare earth production alongside phosphates was potentially much cheaper. 

Indeed, the Glenover project would be viable if only the fertiliser products were exploited alone, the report showed.

It also showed that niobium, used in alloy production, could be recovered as another high-value by-product.

As the company pointed out on Monday this is major progress for the Glenover project and it has already signed a letter of intent with a processing and marketing corporation over the rare earths from the site.

In terms of the phosphates, Galileo plans to find a consultant to carry out a full project pre-feasibility study, which will provide another value kicker.

The company is also in discussions with a local coal mining firm, which is constructing a rail line set to pass within 20 kilometres of the Glenover mine site.

At the same time as advancing Glenover, Galileo has taken advantage of the current difficult mining environment to snap up the advanced Gabbs gold-copper project in Nevada - strengthening its mining portfolio.

This project already has an NI-43-101 compliant inferred resource of 1.61mln gold equivalent ounces in a 57mln tonne deposit grading at 0.56 g/t (grams per tonne) gold (1.029mln ounces) and 0.234% copper. 

The property contains at least three separate gold-copper porphyries and one gold prospect. But Galileo is not content with that. Chairman Colin Bird, who was previously chairman of Kiwara, which owned the Kalumbila copper nickel deposit in Zambia, told Proactive the firm will seek to capitalise on the purchase by extending the resources at Gabbs.

To make the most most of Glenover and Gabbs, Galileo also said it would streamline itself by opting out of developing all its other rare earth projects, including the Nkombwa Hill project in Zambia, that have no immediate potential to be turned into projects.

Shares were 3.66% higher today at 10.625p.

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