Galileo Resources’ carbonatite and ‘suite of resources’ advantage
London based Galileo Resources (‘Galileo’, AIM: GLR) is a mining exploration company developing a ‘suite of resources’ including phosphate, niobium, scandium and rare earths in South Africa and Zambia. Galileo’s flagship project is the Glenover Rare Earths and Phosphate Project, in which it holds a 51% interest covering an area of 15,802 hectares in South Africa’s Limpopo Province. While established only in 2011, Galileo’s management is very experienced, Colin Bird. Bird established Galileo fully aware of the challenge posed by difficult market conditions. Bird was behind the Jubilee Platinum project, in South Africa and known to be one of the most prolific platinum ore resources in the world.
Galileo is running the project with partner Ferminore Pty. Ferminore is especially interested in Glenover’s phosphate aspect and the property has a historical record as a phosphate producer when it was operated by Goldfields Plc; however, the Glenover project has also shown potential for the production of scandium, niobium and rare earths. The Glenover property is rich in carbonatite, which is highly desirable because it offers the potential for high REE grades, large quantities and low thorium content, making it easier to process. Carbonatite is also rich in phosphate.
Galileo Resources issued a preliminary economic assessment (PEA) for the Glenover Project last March evaluating it at USD$ 512 million based on phosphate stockpiles from abandoned operations at the site. Glenover will be able to develop as an open pit mine, which enables a faster and cheaper ramp up to production stage. The PEA has projected a 24-year mine life and 167,100 tons of REE’s with capital costs of USD$ 233 million. The next phases will determine the indicated and measured categories with a view toward completing a pre-feasibility assessment. Given its long production history at Glenover, Galileo has considered recovering ammonium sulphate – a commonly used fertilizer – and scandium by processing phosphate stockpiles – where a large portion of REE’s are said to be based – left from the previous operation using nitric acid as the reagent.
While Australia, the United States and Canada have been targeted as having the greatest potential to produce rare earths to challenge China’s dominant position in the sector, Africa is another region potentially rich in such treasures. Africa’s geological conditions are ideal with large amounts of carbonatites in the ground, often in the form sand. Such is the value that China has intensified its already strong associations with many African governments. Chinese companies are active in many African countries as these often need foreign investment to manage mining projects; given the existing relations Chinese collaboration in rare earths is very likely as China tightens controls domestically.
Other countries must be careful not to miss this trend and Galileo has secured a solid partnership with Ferminore in South Africa. Carbonatite mineralization means that it will not be very difficult to extract rare earths ores from the Glenover property, which leaves the relevant metallurgical process as the main challenge. Price volatility notwithstanding demand for rare earth products, including light rare earths, is expected to exceed demand over this decade in view of a predicted increase of Chinese domestic consumption and a corresponding drop of Chinese REE production.
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