Highlights
• Farm-in and joint venture agreement (“Exploration JVA”) executed with a 100% owned subsidiary of Mineral Resources Limited (ASX: MIN) (“MinRes”) whereby, subject to completion terms:
- Galileo sells 30% of its lithium rights on the Norseman Project (“Project”) tenements2 for a purchase price of $7.5m (“Stage 1”)
- $5m of the purchase price to be paid within five days of execution of the Exploration JVA
- $2.5m of the purchase price to be paid within 12 months of the execution of the Exploration JVA
- Galileo and MinRes form a 70% Galileo / 30% MinRes joint venture (“JV”) to explore for lithium on the Project tenements
- MinRes can sole fund $15m of expenditure over four years to increase its stake in the JV to 55% (“Stage 2”)
- At the completion of Stage 2, MinRes may elect to increase its stake in the JV to 70% by sole funding expenditure through to a Decision to Mine (“Stage 3”)
- After the Completion of Stage 3, MinRes and Galileo will enter into a separate Mining Joint Venture Agreement (“Mining JVA”) on substantially the same terms and conditions as the Exploration JVA
- Galileo may elect to contribute to Development Costs under the Mining JVA or elect to convert its interest into a royalty
• Galileo retains ownership of the Project’s tenements and all rights to nickel, PGEs, and all minerals other than those contained within lithium bearing pegmatites within the Project area
• Mining Lease 63/671, which contains the 17.5Mt Callisto PGE-nickel resource and significant exploration potential, is not a part of the Exploration JVA
Galileo Mining Ltd (ASX: GAL, “Galileo” or the “Company”) is pleased to announce that its wholly owned subsidiaries (“Norseman Resources Pty Ltd” and “Ganymede Resources Pty Ltd”) (together “Galileo") have entered into a farm-in and joint venture agreement (“Exploration JVA”) with ACN 654 242 690 Pty Ltd (“MinRes Subsidiary”), a wholly owned subsidiary of Mineral Resources Limited (“MinRes”), under which the Company will, subject to the satisfaction of the completion terms, sell 30% of all lithium rights held by Galileo on the Norseman tenement package (“Tenements”) for $7.5m cash consideration (the “MinRes Transaction”).
Galileo’s Managing Director Brad Underwood commented;
“We are excited to add a lithium exploration joint venture to our ongoing exploration programs for PGEs and nickel at our Norseman Project.
The Norseman project has excellent lithium potential and is strategically located in the world’s most prospective region for lithium. The project’s outstanding location relative to existing infrastructure provides a short cut to development for any lithium resources discovered through the joint venture.
Galileo will benefit from a focussed program of lithium exploration by MinRes, one of Australia’s pre-eminent lithium companies, as well as increasing our cash reserves to aggressively pursue other high value resource discoveries at both our Norseman and Fraser Range projects.
With $5 million of additional funding to be received within five days of execution of the agreement, a further $2.5 million to be received within 12 months, and $10 million in the bank 4, Galileo is fully funded to undertake all of its planned exploration programs.”
From Completion, MinRes Subsidiary and Galileo will form a 30% / 70% unincorporated joint venture. MinRes Subsidiary has the ability to increase its stake to 55% by sole funding an additional $15m of exploration expenditure on the Tenements over the 4 years following completion. MinRes Subsidiary has the further ability to elect to increase its stake to 70% by sole funding expenditure through to a Decision to Mine. Upon MinRes Subsidiary earning a 70% interest, Galileo must elect to either remain in Joint Venture and contribute to Development Costs or convert its interest into a royalty.
Contact details:
David Tasker
Chapter One Advisors
T: 0433 112 936
E: [email protected]