Galileo Resources PLC (LON:GLR) told investors that its joint venture partner has agreed to complete the acquisition of Star Zinc in a deal worth US$1mln.
Enviro Processing Zambia Limited, a subsidiary of Galileo’s partner BMR Group, agreed to pay Bushbuck Resources a total of US$1mln in cash to acquire Star Zinc.
The cash consideration is being paid in multiple tranches, with some US$130,000 already released to Bushbuck and a further US$400,000 was paid on September 4 – US$300,000 will be due before November 28 and US$170,000 will be due before February.
READ: Galileo Resources to acquire Star Zinc project in Zambia through joint venture with BMR Group
Galileo, meanwhile, has a separate arrangement with BMR whereby it supported the Bushbuck transaction with US$591,000 of funding and it will receive a 51% equity stake in the Enviro unit.
An 18-month work programme is now planned for the Star Zinc assets, with an estimated cost of US$250,000, and it aims to complete a preliminary economic assessment of the assets.
By supporting the funding of future work programmes it is envisaged that Galileo will increase its interest in the assets up to 85%.
Galileo chairman Colin Bird, in a statement, said: "We are pleased that the acquisition of Star Zinc has been effected expeditiously.
“The parties will now cooperate to complete formal transfer of the Zambian licence including government consent.
“We look forward to formalising the project JV agreement and pursuing aggressively our work programme to take the project forward including increasing the Star Zinc resource."