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Galileo to reap rewards as BMR secures Zambian zinc mine
BMR Group completed the purchase of Zambia's Star Zinc project on Friday, increasing Galileo Resources' stake in the mine and sending its share price up in response.
Star Zinc is a willemite zinc silicate project located 20km northeast of Lusaka, which produces good concentrate grades arising from an unusually high zinc ore input grade. Recent updates have identified readings of up to 52% zinc in core at the site according to Galileo.
Galileo now holds an 85% aggregate interest in Star Zinc, realised by way of an 85% equity stake in Enviro Zambia, which is a joint venture company between Galileo and BMR Group, which on Friday made the final deferred consideration to former owner Bushbuck Resources in relation to the acquisition.
Prior to the acquisition, Galileo, which is predominantly a copper explorer with interests in Zambia, South Africa and the US, held a 51% interest in the project.
Colin Bird, chief executive of Galileo Resources, said: "The completion of BMR's acquisition of Star Zinc, together with the company's exploration progress represent are positive developments for the project. We are continuing with drilling and expect to complete this phase during March. We expect our first assay results shortly and will release further assays progressively to the market as soon as they become available."
BMR has opted not to exercise its right to buy back a 10% interest in Star Zinc from Galileo, meaning that $100,000 held in escrow will be released to BMR.
Meetings between BMR and directors of the Zambian mining ministry and mining cadastre have taken place in preparations for the company's appeal against the notice of cancellation applied to its Kabwe mine.
AIM traded company Jubilee Metals Group is also invested in the Kabwe mine project, to which it is providing technical, operational and financial support. Earlier this month Jubilee told BMR that it wished to take up its rights on Kabwe, which will allow Jubilee to increase its effective interest in the Project to 57.41%, comprising 40% direct and 17.41% indirectly as a shareholder in BMR.
Leon Coetzer, chief executive of Jubilee, said: "The Zambian Department of Mines' representatives acknowledged the combined strength of the BMR and Jubilee team and recognised the significant progress made by the team towards the execution of the Kabwe project."
The formal appeal is expected to be submitted no later than 2 March.
As of 1614 GMT, Galileo Resources' shares were up 4.44% to 1.41p, while Jubilee's shares were up 1.28% at 2.96p and BMR's shares were unchanged at 1.90p.