TIDMGLR
RNS Number : 9542V
Galileo Resources PLC
21 April 2016
For immediate release: 14.00
21 April 2016
Galileo Resources Plc
("Galileo" or "the Company")
GALILEO EXECUTES EXCLUSIVE AGREEMENT FOR FARM-OUT OF THE
COMPANY'S SILVERTON GOLD PROPERTY IN NEVADA USA
Galileo is pleased to announce that it has executed a binding
and exclusive term sheet ("Exclusive Agreement") with Orogen Gold
plc, ("Orogen"), pursuant to which Orogen will have the right to
earn-in a 51% interest in the Company's Silverton Gold Silver
property ("Silverton" or the "Property") in Nevada, USA, by way of
exploration expenditure of US$400,000 (the "First Expenditure")
within 18 months on the Property and thereafter the possibility to
spend an additional US$1,500,000 (the "Second Expenditure") within
30 months to earn-in a further 24% interest in the Property (the
"Farm-out").
The Company will have the right to participate pro rata after
the First Expenditure; should it exercise this right it would
retain a 49% equity interest in Silverton (as opposed to being
diluted down to 25%). The Exclusive Agreement is subject to due
diligence, which is anticipated to be completed, within 45 days of
signing, including formalisation of the Exclusive Agreement.
Shareholders are advised that Colin Bird is an executive
director of both Galileo and Orogen, in which he holds respectively
24.81% and 1.82% of their issued ordinary share capital. In
accordance with the requirements of Sections 171 to 177 of the
Companies Act 2006, he has abstained from negotiations and the
decision making process of the Galileo Board in regard to the
Farm-Out and will continue to do so in order to manage any future
potential for a conflict of interest in the Property.
Highlights
-- Galileo has granted Orogen the right to earn an initial 51%
interest in the Silverton project over the 6km(2) claim area
through exploration spend of US$400,000 over 18 months
-- Orogen may earn an additional 24% interest in the project
through a further exploration spend of US$1.5 million over a
subsequent 30 month period
-- Previous bedrock and drill sampling outlined an area >0.5g/t Au measuring 1km x 0.5km
-- Farm-out allows for outside investment into Silverton and is
in line with Galileo's strategy of focusing its available resources
on its South African copper projects
-- Assay intervals reported by Newcrest (2003) up to 7.62m@
2.29g/t Au and 10.67m @ 1.0g/t, including 1.52m @ 5.01g/t Au
(non-Code compliant)
-- Historic silver and gold production from district
-- Shear Zone target never drill tested for gold-silver
mineralisation; adjacent short holes returned assays up to 1.71g/t
Au, 604g/t Ag over 1.52m intervals within wider intervals of lower
grades
-- This proposed transaction allows Galileo to continue with its key focus on copper
Andrew Sarosi, an executive director of Galileo, has advised the
board's non-executive directors and commented: "We are pleased to
have entered into this Exclusive Agreement with Orogen, which will
allow for an outside party to fund the exploration of Silverton, in
particular focusing on a highly anomalous gold shear zone, on which
limited vertical drilling (reverse circulation) has been previously
carried out, whilst allowing Galileo to retain upside through its
residual equity interest.
We intend to focus our resources on copper exploration, for
which in March 2016, the Company raised funds primarily for its
Concordia copper project in South Africa. This proposed transaction
enables Galileo to retain an interest in Silverton, while focussing
on its copper mission. Orogen has confirmed to Galileo that it has
sufficient funds in place to commence work on the Property."
The Property
The Property is located northeast of Tonopah in the central
Pancake Range. The Silverton claim block comprises 72 lode claims
staked by Newcrest in March 2002.
Small-scale mining operated in the area from 1930 to 1937 and in
1953. Total production for the district is <100,000 oz. silver,
<2,000 oz. gold and <1 ton of antimony. Over the last three
decades multiple companies including Olympic Mining, Westgold,
Newmont and Pittston have explored the property for gold and
silver. Work completed comprised geochemical sampling, fluid
inclusion studies, mapping, geophysics and drilling (45
pre-Newcrest holes).
Since 2002 Newcrest has taken over 1,000 rock chip samples and
drilled 42,983 ft in 29 RC (reverse circulation) drill holes.
Geology/Mineralization
The Silverton district occurs at the eastern margin of a caldera
complex dated at 34Ma. Both high and low angle faults and fault
breccias related to caldera rim tectonics are observed on the
property. Rocks consist of Palaeozoic dolomite/limestone detachment
blocks surrounded and underlain by Tertiary rhyolite tuffs.
Rhyolite dikes have also been mapped along caldera ring fractures
and north trending faults.
Tuffs around the Palaeozoic rocks are locally bleached and
argillized (kaolinite - clay). Both units are silicified along
faults, generally as jasperoid bodies up to 30 ft. wide. Jasperoid
also forms flat-lying replacement horizons within volcanic beds.
Additional silicification includes, stockwork silica veining and
chalcedony +- stibnite-pyrite veins. One to two percent
disseminated pyrite and minor stibnite occurs in tuffaceous rocks
over a 4mi(2) area. Other mineralization includes barite, gypsum,
and alunite. Ore-grade gold values are generally associated with
veins, strongly veined limestone, and argillized tuff along
mineralized structures and adjacent to jasperoid. Most jasperoid
bodies themselves contain only low-level gold.
The property contains a >100ppb Au rock chip anomaly
measuring 2.5km x 3km. Au, Ag, As, and Hg mineralization are
broadly coincident. Within the anomaly, the most significant of
three main zones is a NNE trending area (Silverton Shear)
>0.5g/t Au measuring 1km x 0.5km and centered on a 100m wide
silicified contact between rhyolite to the east and carbonate rocks
to the west.
Old vertical drilling on the southern end of the Silverton Shear
returned several intervals of 5ft @ 1-5g/t Au and 100-600g/t Ag.
The best Newcrest intercept is 25 feet @ 2.3g/t Au in rhyolite
tuff.
Geophysics
Resistivity and ground magnetic surveys were completed in 1998
and 1999. Regional aeromagnetics also covered the Property.
Metallurgy
No metallurgical testing has been done on rocks from the
Silverton district and potential recoveries are unknown. However,
gold occurrence could be fine grained, micron sized, as none is
observed in pan concentrates.
Exploration Potential
The geologic environment is similar to disseminated and bonanza
epithermal gold mineralisation at the Round Mountain mine Nevada.
The Silverton property and area of volcanic rocks to the west are
prospective for exposed and concealed oxide and sulphide tuff- and
intrusion -hosted disseminated and associated and/or
carbonate-hosted bonanza style epithermal gold mineralisation. In
the relatively untested area along the 1 km Silverton shear zone,
with a 0.1-1.5g/t Au anomaly at surface, the potential exists for
bonanza gold silver 'feeder' veins. In addition, low-grade bulk
tonnage disseminated gold can also occur in the rhyolite porphyry
intrusions, similar to e.g. Kori Kollo in Bolivia.
Additional information on Silverton
Galileo's accounts do not include a specific carrying cost for
the Property, which was acquired as part of the acquisition of the
unlisted St Vincent Minerals Inc. (SVM) and whose accounts did not
include a separate carrying cost for the Property. The only costs
associated with the Property and incurred to date by Galileo are
the annual Bureau of Land Management and County fees, which amount
to approximately US$11,900.
Related Party Transaction
Given Colin Bird's position as CEO of both Galileo and Orogen
and his shareholdings of 24.81% and 1.82% respectively, the
Farm-Out is a related party transaction under the AIM Rules.
Accordingly, Mr Sarosi, Galileo's executive director, and its
non-executive directors, having liaised with the Company's
Nominated Adviser, consider that the terms of the Farm-Out are fair
and reasonable in so far as its shareholders are concerned.
Technical Sign-Off
Andrew Sarosi, Executive Director of Galileo, holds a B.Sc.
Metallurgy and M.Sc. Engineering, University of Witwatersrand, is a
member of The Institute of Materials, Minerals and Mining and is
'qualified person' as defined under the AIM Rules for Companies and
a competent person under the reporting standards. He has approved
the release of this announcement.
For further information, please contact:
Further details are available from the Company's website,
including its Glenover rare earth and phosphate project, its Nevada
gold-copper properties in the USA, as well as a copy of this
announcement:
www.galileoresources.com
You can also follow Galileo on Twitter: @GalileoResource
For further information, please contact:
Andrew Sarosi, Executive Tel +44 (0) 1752 221937
Director /020 7584 2155
Beaumont Cornish Limited Tel +44 (0) 20 7628 3396
- Nomad
Roland Cornish/James Biddle
Beaufort Securities Limited - Broker Tel +44 (0) 20 7382 8416
Jon Belliss
Technical Glossary
Au Gold
Ag Silver
As Arsenic
Breccia a rock composed of broken fragments of minerals or rock
cemented together by a fine-grained matrix
Caldera a large volcanic crater, especially one formed by a
major eruption leading to the collapse of the mouth of the
volcano.
Dike a later vertical rock between two layers of older rock
Epithermal deposition from warm mineralised waters at shallow depth
Hg mercury
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Jasperoid rock formed from hydrothermal activity giving rise to
Jasper, an opaque, impure variety of silica
Rhyolite an igneous, volcanic rock, of silica-rich composition
Porphyry textural term for an igneous rock consisting of large-grained crystals
Stibnite antimony sulphide mineral the chief ore of antimony
Tectonics geologic process, which controls the structure and
properties of the Earth's crust,
Tertiary a geological period of beginning about 65 million years ago
Tuff an igneous rock formed from the products of an explosive
volcanic eruption
This information is provided by RNS
The company news service from the London Stock Exchange
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