Update on Sale of Kalahari Copper Belt Licences to Sandfire Resources Ltd (“Sandfire”)
Galileo Resources plc (“Galileo” or the “Company”) further to its announcements on 26 January 2021, 2 August 2021 and 1 September 2021 announces that all the conditions precedent have been met in relation to its conditional licence sale agreement with ASX listed Sandfire Resources Limited ( ASX:SFR) (“Sandfire”) entered into on 22 January 2021 and varied on 30 July 2021 and 1 September 2021 (the “Licence Sale Agreement”). Unless indicated to the contrary defined terms in Galileo’s announcement dated 26 January 2021 in relation to the Licence Sale Agreement have the same meaning.
Completion: Completion of the Licence Sale Agreement is anticipated to occur on or around 22 September 2021. Sandfire will:
1) at Completion pay to the group US$1.5M in cash for the 9 Kalahari Copper Belt licences being sold (the “Included Licences”) ; and
2) following Completion issue 370,477 Sandfire ordinary shares to the Company with a current market value A$2.43M (approx. US$1.79M) based on the closing Sandfire share price of A$6.55 per Sandfire share on 14 September 2021 (being the last trading date before the date of this announcement) for a right of first refusal in relation to the 13 Kalahari Copper Belt licences retained by the Company (the “Excluded Licences”).
Colin Bird Chairman & CEO commented:
” The completion of this transaction with Sandfire represents a major step forward for Galileo in its Kalahari Copper Belt endeavours.
We are pleased to be working with Sandfire Resources, who are a successful Australian copper and gold producing company with a market capitalisation of over A$1 billion and a large copper silver mine development programme in Botswana where they have recently been awarded a mining licence and we look forward to our association with them. Sandfire have a significant position in the Kalahari Copper Belt and hence we feel that this arrangement will benefit both parties to further enhance their positions. The transaction allows Sandfire to explore the Included Licences, which are in close proximity to their major mine build, and also allows Galileo to carry out exploration on the Excluded Licences in the Kalarahi Copper Belt which is part of the Northwest Botswana Rift which the USGS in 2015 reported as the world’s most prospective area for yet-to-be discovered sediment hosted copper deposits. Galileo will soon be announcing results of its recent Botswana exploration ”
Reimbursed Exploration Expenditure: Within one month of Completion Sandfire is to reimburse Galileo up to US$500K of exploration expenditure incurred by Galileo in relation to licence obligations of certain Included Licences being transferred to Sandfire (the “Reimbursed Exploration Expenditure”);
Exploration Commitment: Sandfire has to spend US$4M on the Included Licences (the “Exploration Commitment”) within two years of Completion (the “Exploration Period”) and if the US$4M is not spent, any shortfall will be paid to the Company. The Exploration Commitment is to be reduced by the amount of the Reimbursed Exploration Expenditure.
Success Payment: a one-off success payment is to be paid to the Company for the first ore reserve reported under JORC Code 2012 edition on the Included Licences which exceeds 200,000 tonnes of contained copper (the “First Ore Reserve”) in the range of US$10 million to US$80 million depending on the amount of contained copper in the First Ore Reserve (the “Success Payment”). US$2 million of the Success Payment will be held in escrow for up to three years pending any claim by Sandfire under the Licence Sale Agreement.
Rights of First Refusal: Sandfire will have a right of first refusal if the Company wishes to transfer or sell an interest in one or more of the Excluded Licences. The Company has a right of first refusal if Sandfire wishes to transfer or sell part of one or more of the Included Licences other than to a related body corporate.
Included Licences sold to Sandfire
Excluded Licences retained by the Galileo Group
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