Galileo Resources PLC (AIM:GLR) has entered into a joint venture agreement with Statunga Investments covering the Luansobe Copper Project in Zambia.
The agreement provides Galileo with the right to earn an initial 75% interest in a special purpose joint venture company (JV) at a cost to Galileo of US$200,000 initially, with a second payment to follow of US$200,000 by 20 February 2022 and the issue of 5mln shares to the vendor.
Based on the closing price share price of 0.98 pence on 29 December 2021, the aggregate consideration will be about £350,000.
The JV is to be established under Zambia law to acquire (subject to ministerial consent) the small scale exploration licence number 28340-HQ-SEL at Luansobe, along with the technical information and other information and assets related to the Luansobe Project.
During the initial JV period (i.e. up to 22/2/22) Galileo will conduct further due diligence in relation to the Luansobe Project and may at its sole discretion at any time prior to 22 February 2022 give notice to Statunga that it has decided not to proceed with the JV.
The Luansobe prospect is situated some 15km to the northwest of the Mufulira Mine site, with mineralisation occurring as stratabound layers and lenses dipping at 30 degrees to the northwest along the same stratigraphic horizon as the giant Mufulira copper mine, which produced well over 9mln tonnes of copper metal during its operation, Galileo told investors.
Copper mineralisation is reported to occur over about three kilometres of strike and to at least 1,250 metres (m) depth. A 1974 report suggests the potential for a non-JORC compliant global resource of over 20mln tonnes @ 2.51% copper (Cu), with a significant proportion of oxide mineralisation occurring in the upper 70m, below the leached cap. Based on these reports the deposit appears open and relatively untested at depth, Galileo added.
"We are very pleased with the addition of the Luansobe brownfield Project within the Zambian Copperbelt,” said Colin Bird, the chairman and chief executive officer of Galileo.
“The project area has been tested by numerous drill holes in various campaigns from 1921 to 2007, with semi-continuous mineralisation reported along about 3km of strike and to at least 1,250m depth. Historical reports suggest the potential for very significant copper resources of up to 20Mt @ 2.51% Cu. Galileo proposes to undertake a substantial drilling programme to update the reported resource to JORC-compliant status with the twin objective of delineating a near-surface copper-oxide deposit with early development potential and an underlying sulphide deposit for larger-scale development," Bird added.
Shares in Galileo were up 7.7% at 1.05p in the first hour of trading.