Galileo Resources PLC (LON:GLR) has signed a term sheet with its partner Fer-Min-Ore at the Glenover phosphate/rare earth project to advance it to a stage where it obtains a mining right.
Galileo will fund the execution of the mining right application by a loan convertible into 4% of the equity in Glenover Phosphate Proprietary, which would take its holding up to 38%.
Conversion will be 2% on acceptance of the mining right and 2% on formal grant of the Mining Right.
The Term Sheet is valid for 24 months or until formal grant of the mining right.
Colin Bird, chief executive,said: "The mining right will provide optionality to Glenover to pursue best route for development of the Project. We are currently testing various scenarios for development and will keep shareholders advised."
Last month, a major phosphate producer confirmed its desire to undertake a two-phase pilot plant phosphate flotation study at Gleover, which is in South Afrcia.
The ultimate objective of the study is to either develop the project or sell it in whole or part to the MPP, Galileo said at the time.