Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Grades at Galileo’s Star zinc project indicate upside could be greater than previously thought

Galileo's Star zinc project in Zambia is showing plenty of promise
zinc in periodic table
Zinc prices have been riding high

Drilling earlier this year conducted by Galileo Resources PLC (LON:GLR) at the Star zinc project revealed some extremely impressive grades.

Among the highlights from this year's first pass drilling were 38.15% zinc over 16 metres and 25.12% over six metres. That was then followed up by intercepts of 41.5% zinc and 46% zinc across widths of between seven and nine metres.

READ: Galileo Resources unearths high-grade mineralisation at Star Zinc project

And these grades aren't the only indication that the ground is rich in ore, according to chief executive Colin Bird.

When Anglo American worked this ground, he says, the estimate was that it contained between 250,000 and 300,000 tonnes of ore. But back then, silicate deposits of this nature were less desirable while major sulphide deposits were still on offer. Most sulphide deposits are gone now, and processing technology has well and truly caught up. So the game is truly afoot at Star.

Bird is highly optimistic that the geological implications of recent drilling work are favourable.

“The drill programme has shown we could get stacks more. It goes up to around 50% zinc. And there’s lots of 28%,” he says.

READ: Offtake Heads-of-Terms signed by phosphate subsidiary of Galileo Resources

For zinc projects, these are rich grades indeed, and with the zinc price riding along at multi-year highs, it all adds up to an enticing prospect.

Bird reckons that if the company could prove up 60,000 tonnes of contained zinc, then it would justify the setting up of a small-scale operation.

A conceptual grade-tonnage target released in June put the potential ore at around 485,000 tonnes at 15% zinc, which would justify such an undertaking. But Bird's aspirations are higher. If the drilling could boost the resource exponentially, say, to five million tonnes, then Star would become the type of project that a company could sell on, he adds

So plenty to play for at this stage.

“My initial target was to put an envelope around the resource,” says Bird.

“But having said that we’re still trying to find the source. Inevitably there’ll be a big feeder. And there are those who say it’s a bit like Tsumeb.”

For those not in the know, Tsumeb is one of southern Africa’s foremost base metals projects, enough of an undertaking to put a smelter on site there in Namibia, and a benchmark for many a project in the region.

But how the geology all works remains unclear. Chartered Consolidated did some work at Star in the early 1960s, but Bird says he now wants to bring “more science to it.”

“The geophysics is old,” he says. “This latest work has now destroyed the Chartered Consolidated model.

READ: Galileo Resources steps up activity on zinc and phosphate interests

That leaves room for a new, Galileo Resources model. The conceptual target is a significant tick in the box on that score, and with exploration work ongoing, there'll be more to come. 

“Already we're getting better than the historic numbers,” says Bird. “On grade, I’m personally hopeful will be better.”

Galileo's commitment to the project is certainly clear enough: in September the company doubled down on its investment and moved to increase its interest to 95%, taking up the stake of struggling BMR Resources. 

While all that's going on, new interest is also being generated in South Africa at the Glenover project, which Galileo was founded on, but which went into something of a hiatus on weak commodity prices.

It’s come alive again though, reworked as a phosphate project rather than the rare-earths mine that was originally envisaged. In this new form, it’s attracted interest from a major phosphate producer in the form of an off-take agreement.

The advantages of this new structure are clear.

“We have high-grade phosphate,” says Bird.

“We have stockpiles of three million tonnes. We haven’t got to go mining for six or seven years, and the capital cost will be just US$7mln-US$8mln. What’s more, the tailings are full of rare-earths.”

It all adds up to a nice internal rate of return, and a doubling of the upside for Galileo investors.

View full GLR profile View Profile

Galileo Resources PLC Timeline

Related Articles

1528891944_Berkwood-Resources---drill-core.jpg
June 13 2018
Lac Guéret Extensions is adjacent to one of the highest grade graphite projects in the world
cement mixer
June 04 2018
Pozzolan, and CS in particular, have become the most important area for the group
Cobalt sample on the periodic table
May 23 2018
One of Australia’s few potential cobalt producers from sulphide-based deposits, where cobalt production is underpinned by copper and gold.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use