Galileo Resources PLC Update on Offtake Agreement for Star Zinc ore (6674O)
October 03 2019 - 5:27AM
UK Regulatory
TIDMGLR
RNS Number : 6674O
Galileo Resources PLC
03 October 2019
For immediate release
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
3 October 2019
Galileo Resources Plc
("Galileo" or "the Company")
Progress in negotiating Offtake Agreement for Star Zinc ore
Galileo is pleased to provide an update, further to its
announcement of 1 May 2019, on its ongoing negotiations targeting a
zinc ore (Ore) offtake agreement (the "Agreement") between Jubilee
Metal Group plc's ("JMG") Kabwe zinc refinery in Zambia ( the
Refinery) and the Company's Zambian Star Zinc and Kashitu projects
(the Projects).
Highlights
-- Ore supply for up to 60 000t tonnes (t) ore per annum
-- Ore grade supplied not less than 14% Zn
-- Payability to be consistent with similar offtake agreements
in the zinc market, typically based on a sliding scale against
grade and price
-- Three-year term supply, renewable by mutual agreement
-- Mining targeted to commence Q2 2020, subject to availability
of further funding and grant of mining right including
environmental permit.
-- Contribution of silver and germanium from Star Zinc ore to be further assessed
-- Amenability and suitability of Kashitu material for the
Refinery to be tested on site, in particular the recoverability of
vanadium, the presence of which has been identified historically on
Kashitu.
Colin Bird CEO said: "Negotiations are advancing satisfactorily
towards an industry normal arrangement and allows us to do the
necessary administration and planning to bring the Projects into
production. The Projects offer the potential to provide consistent
quantity and quality of Ore to the Refinery. Furthermore, the
suitability of the potentially much larger Kashitu deposit and its
vanadium content offers the opportunity of a long term sustainable
ore supply . We look forward to concluding the arrangements and
commencing exploration and then commencing testing on Kashitu as
soon as practicable whilst advancing Star Zinc to production status
.
Background
JMG secured the Sable Zinc Refinery in Zambia as part of their
integrated Kabwe Project to bring to account the Kabwe surface
tailings material containing zinc, vanadium and lead. JMG is
currently capitalising the refinery with the aim of commissioning a
dedicated zinc, vanadium and lead refinery circuit in addition to
the existing copper circuit. The addition of the zinc and vanadium
circuit offers the potential to refine the zinc ore from both the
Star Zinc and Kashitu Zinc projects. Under the terms of the
agreement entered into between JMG and BMR Group Plc (31/08/2017),
JMG holds the first right to the processing of the mined material
at the Star Zinc and Kashitu projects. Galileo and JMG have entered
into discussions to conclude the terms of such a potential offtake
agreement which is to be based on standard industry terms and will
consider among other things, availability of refinery capacity, ore
supply quantity, grade and payability. Such an offtake agreement
offers mutual strategic benefits with the Projects potentially
accessing a nearby refinery while the Refinery would benefit from a
long term ore supply. The potential vanadium content offered by the
Kashitu Zinc project is of particular interest and the parties have
agreed to collaborate more closely to determine a suitable
processing solution.
The Company will make a further announcement once the terms of
the Agreement have been finalised between the parties.
You can also follow Galileo on Twitter: @GalileoResource
For further information, please contact: Galileo Resources
PLC
Colin Bird, Chairman Tel +44 (0) 20 7581
Andrew Sarosi, Executive Director 4477
Tel +44 (0) 1752 221937
Beaumont Cornish Limited - Nomad Tel +44 (0) 20 7628
Roland Cornish/James Biddle 3396
--------------------------
Novum Securities Limited - Joint
Broker
Colin Rowbury /Jon Belliss +44 (0) 20 7399 9400
--------------------------
Shard Capital Partners LLP - Tel +44 (0) 20 7186
Joint Broker 9952
Damon Heath
--------------------------
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END
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