Legal Due Diligence on Acquisition of Nkombwa Hill Rare Earth Project Completed
January 11, 2013 — The Board of Galileo Resources Plc (AIM: GLR), the emerging African Rare Earth exploration and development company, is pleased to announce that, further to the announcements of 25 July and 10 September 2012, the legal Due Diligence on Galileo’s acquisition of Rare Earth International’s (REI) Nkombwa Hill Rare Earth Project has now been finalised.
In the update released on 10 September 2012 the Company reported that the only factor preventing completion of the due diligence was the issue of the tenure of Large Scale Prospecting License No. 12198-HQ-LPL that covers the Nkombwa Hill deposit. At the time, key licensing-documentation was not accessible at the license administration centre (the “Cadastre”) of the Zambian Ministry of Mines and Mineral Development (the “Ministry”) and Galileo was therefore unable to gain sufficient title confidence to complete the acquisition. The Zambian legal practise contracted by the Company recently gained full access to the Cadastre and have now finalised the due diligence study and reported their findings to the Company. They conclude that the license covering the Nkombwa Hill project is in good standing with, and the sole existing exploration license over the area recognised by, the Ministry.
Colin Bird, Executive Chairman of Galileo Resources, said: “We are extremely pleased that the due diligence report is now finalised and that it confirms that the Nkombwa prospecting license is in good standing and unencumbered. As a consequence, the Board has approved the issue of 5.25 million Galileo ordinary shares to REI prescribed in the Heads of Agreement (announced 25 July 2012). Galileo based on previous work carried out by REI and others are excited about the prospects for the Nkombwa Hill project and intend aggressively to advance the project to resource level in the shortest possible time whereby seeking to earn our 50% interest in the project.
The Company has therefore issued and allotted 5.25million new Ordinary Shares of 5p per Ordinary Share (the “Ordinary Shares”) to the vendors (the “Consideration Shares”). Application has been made for the Consideration Shares to be admitted to trading on AIM and it is expected that Admission will occur, and dealings commence, on or about 17 January 2013.
Accordingly, the enlarged issued share capital of the Company, will comprise 88,307,183 Ordinary Shares in the capital of the Company. The Consideration Shares will, when issued, rank pari passu in all respects with the existing issued Ordinary Shares of Galileo.
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Dr Jock Harmer, Technical Director of Galileo, who holds a Ph.D. Geochemistry, University of Cape Town, is a Registered Professional Natural Scientist with SACNASP, and a ‘qualified person’ as defined under the AIM Rules for Companies and a competent person under the SAMREC, JORC and NI 43-101 reporting standards. The technical parts of this announcement have been prepared under Jock Harmer’s supervision and he has approved the release of this announcement.
Galileo Resources Plc is a natural resource exploration company. The Company has an experienced management team with proven technical and commercial background. The flagship property is the Glenover Phosphate concession, which produced phosphate for many years. Phosphate however, is now subordinated to Rare Earth Elements (REEs). The project area is known to contain REEs and that the grades, if of sufficient size and continuity may well lead to a mediumsized operation for the production of REOs.
Galileo Resources currently has a 31.66% interest in the Glenover Project and has the option, via additional stage payments as set out in the Company’s Admission Document, to earn up to a maximum interest of 73.73%.
One of the key benefits of the project for a medium-sized operation is that, if REEs, which have been shown to be present in the stockpiles from the previous phosphate operations, can be proven to compliant resource category, the cost of mining it and the associated risks should substantially be reduced.
The concession is of considerable size and hosts mineralisation types suitable for potential REE presence. The aim is to investigate the mineralisation types for REE presence and content with the view to proving up a mineable resource of REOs.
The Company can acquire a 35% interest in the Nkombwa Hill REE Project in Zambia. Intensive surface sampling over the last 18 months has revealed a number of drill-ready targets having significant levels of REE mineralisation: REE concentrations recovered from kilogram-scaled outcrop samples range up to 23% TREO.
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