Aim-listed Galileo Resources has executed a heads of agreement to acquire the Kabwe residual rights, in Zambia, from BMR Group.
The acquisition excludes BMR’s small-scale licence which is used as a zinc/lead/vanadium tailings recovery project, situated within the Kabwe mining licence.
The acquisition includes the remaining 15% of the shares, that Galileo currently does not hold, in Enviro Zambia, which owns the Kabwe mining licence and indirectly owns 95% of the Star zinc project nearby.
The Kabwe residual rights include the Kashitu zinc/willemite exploration prospect.
Galileo will acquire the Kabwe residual rights and sale shares for an initial £50 000 as an option fee for exclusivity to conduct due diligence and negotiate the proposed transaction, and a further £50 000 cash and the allotment to BMR of 15-million ordinary Galileo shares of 0.1p on completion of the proposed transaction at a price of 1.15p apiece.
Based on the latest closing price on Aim, the consideration is valued at about £275 000 in aggregate.
As a result, Galileo could acquire 100% of Enviro Zambia (an increase from the currently proposed 85%), thereby increasing its interest in the Star zinc project to 95%. The government of Zambia owns the remaining 5%.
BMR owns the entire issued share capital of Enviro Mining, which in turn owns the entire issued share capital of Enviro Processing – a company incorporated in Zambia, which in turn owns 15% of Enviro Zambia.
Enviro Zambia owns 95% of the issued share capital of Enviro Processing Zambia and the remaining 5% is owned by the Zambian government. Enviro Processing owns the Star zinc project.
BMR has entered into agreements with Jubilee Metals Group (the majority shareholding in Kabwe) that entitles Jubilee to call for the transfer of the entire issued share capital of Enviro Mining. The joint venture company that Jubilee has formed with BMR has a right to be offered, for processing, on agreeable commercial terms, any minerals or resources recovered within the area of the Kabwe mining licence.
Galileo reported that Jubilee only wishes to pursue the tailings recovery project and is willing to permit Galileo to acquire all assets and rights comprised in the Kabwe mining licence (residual rights).