TIDMGLR
RNS Number : 7597J
Galileo Resources PLC
24 December 2020
Galileo Resources Plc
("Galileo" or the "Company" or the "Group")
24 December 2020
Audited Results for the year ended 31 March 2020
Galileo (AIM: GLR), the exploration and development mining
company, announces its audited results for the year ended 31 March
2020. Extracts are set out below.
Highlights for the period under review
-- Completed, 21 June 2019, an independent initial inferred
resource estimate ("IRE") for the Star Zinc project in accordance
with JORC 2012
-- The IRE reports Inferred zinc resources with reasonable
prospects of future economic extraction of approximately 500 000
tonnes at 16% Zn or 77 000 tonnes of contained metal above a
cut-off grade of 2% Zn, including approximately 340 000 tonnes at
21% Zn for 72 000 tonnes of metal above a cut-off grade of 8%
Zn
-- Raised GBP1,000,000 in placing, before expenses, to advance
the Star Zinc Project and for general working capital purposes
-- Acquired unconditionally from BMR, the remaining 15% of the
shares that the Company did not hold in Enviro Zambia Ltd, thereby
increasing the Company's ownership in the Star Zinc Project to 95%
with the Zambian government holding the other 5% Kashitu Zinc
Prospect ("Kashitu")
-- Kabwe Residual Rights, which includes the Kashitu Prospect, acquired unconditionally from BMR
-- On 5 October 2018, the DMR requested a Record of Decision
("ROD") from the Department of Water and Sanitation ("DWS") with
regard to the MRA related Waste Management Licence Application. The
ROD is pending final discussions by Glenover Consultants with DWS
in this regard
-- South African major fertilizer producer ("MFP") completed the
first phase of a 2-phase pilot plant flotation study to produce a
bulk phosphate flotation concentrate for testing in MFP's
fertilizer processing plant
-- The Group reported a net loss of GBP642,188 (2019: loss of
GBP416,784). Basic loss reported is 0.14 pence (2019: loss of 0.14
pence) per share
Highlights post the period under review
-- In June 2020, the Company raised GBP990,000 before expenses
to advance its operations in Botswana and Zambia
-- Galileo agreed an optimal arrangement ("Arrangement ") with
BMR to assume the rights to BMR's Mauritian subsidiary, Enviro
Mining Limited ("EML") and its wholly-owned Zambian subsidiaries,
which latter, include, amongst other things the title to licences
for Star Zinc and Kashitu (zinc willemite) projects. The
Arrangement, which is subject to Zambian Ministry ("ZM") approval,
is for nil consideration since the Company has earned-in 100%
rights to the two projects
-- On 25 November 2020 Galileo announced that it had signed a
marketing agreement with Zopco S.A. ("ZopCo") in relation to the
potential sale of zinc willemite ore from the group's 95% owned
Star Zinc project. Zopco is a Geneva based independent trading
company focussed on non-ferrous metals and concentrates
-- The final TSF design report for the Glenover project was
completed by Golder in November 2020 and has been submitted to the
DWS for its RoD, with a decision expected shortly
-- Glenover continued to identify potential investors in the
Glenover project and initiated preliminary discussions, which are
ongoing
-- Galileo acquired 100% of Botswana- incorporated Crocus-Serv
(Pty) Ltd ("Crocus"), whose assets comprise 21 copper and
nickel-PGE (Platinum Group Elements) exploration Prospecting
Licences ("PLs") in the highly prospective Kalahari Copper Belt
("KCB") and the Limpopo Mobile Belt ("LMB") in western and eastern
Botswana respectively. The consideration of GBP163,020 for the
acquisition comprised the issue of a total 38,814,246 new Galileo
ordinary shares of 0.1p at 0.42p each and a separate cash payment
of GBP10,828
-- The Company commenced development of an exploration programme for the KCB properties
-- The Company's subsidiary, Crocus, submitted, in terms of the
Botswana Environmental Assessment Act (2011), a draft environmental
management plan (EMP) for the KCB project to the Department of
Environmental Affairs (DEA) Botswana for review
-- In September 2020 Galileo announced a further agreement to
acquire 100% of Africibum Co (Pty) Ltd, and its interest in five
prospecting licences and two prospecting licence applications in
the Kalahari Copper Belt in Botswana
-- The Africibum licences include the Quirinus copper-silver
prospect with historic shallow drill intercepts in a three-hole RC
drilling programme which include 4m @ 1.7% Cu, 13g/t Ag and 6m @
0.9% Cu, 14g/t Ag. The intercepts occur within a series of
copper-in-soil anomalies that extend for 13.4km in total, much of
it untested. The Quirinus prospect lies within 15km of major
copper-silver discoveries, part of Cupric Canyon Capital's
Khoemacau Project
A copy of this announcement is available on the Company's
website www.galileoresources.com . and the annual report is being
posted to shareholders.
Current Government measures in relation to COVID-19 prohibit the
Company calling a general meeting at which the audited accounts for
the year ended 31st March 2020 will be presented and shareholders
invited to attend. The Company will, government measures in
relation to COVID-19 permitting, call a general meeting in 2021 at
a date to be announced, at which the audited accounts for the year
ended 31st March 2020 will be presented and shareholders invited to
attend.
Galileo also announces that, utilising the one month extension
granted by the London Stock Exchange, it will publish its unaudited
interim accounts for the six months ended 30 September 2020 by 31
January 2021.
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
You can also follow Galileo on Twitter: @GalileoResource.
For further information,
please contact: Colin Bird, Tel +44 (0) 20 7581 4477
Chairman
Beaumont Cornish Limited
- Nomad Tel +44 (0) 20 7628 3396
Roland Cornish
Novum Securities Limited
- Broker Tel +44 (0) 20 7399 9400
Colin Rowbury/Jon Belliss
Shard Capital Partners LLP
-Joint Broker
Damon Heath Tel +44 (0) 20 7186 9952
Extracts of the Accounts
Chairman's Report
Dear Shareholder
The year under review has been about consolidation and, like
most of the companies, managing a company largely remotely through
a pandemic which started in earnest towards the end of the
financial year and continued unabated up to the present. I am
pleased to say that none of our assets were adversely affected by
the COVID-19 outbreak, nor was our ability to progress matters in a
positive way. Whilst director and senior management visits were
very restricted, the Company managed to progress all of its
obligations and maintain its rights during the period and up to the
time of writing this report.
The Glenover Project has attracted some interest for both its
rare-earth and phosphate potential. In some cases, the interest
co-joined the commodities. One company in particular has shown
interest in the overall Glenover Project, but requires
comprehensive test work to decide which or any development plan it
elects to progress. We continue to assist with test work and the
provision of samples, large and small, where necessary. This test
work is likely to continue for the remainder of this year and into
early next year.
Our Star Zinc Project in Zambia has been fully evaluated and is
now ready to commence production as a small mining operation.
Whilst small, the zinc, silver and germanium metal content make the
project a very valuable, potentially 5-year duration, cash flow
supplier. The willemite ore occurs from surface to just 60m depth,
making open pit mining a relatively simple operation. We are
currently finalising our plans to bring this project into
production during the first quarter of 2021.
We have maintained the Ferber Project in Nevada, USA in good
standing and the fundamentals for copper and gold makes the project
potentially interesting to a number of would be suitors. We are
progressing the various approaches and will decide whether to
undertake exploration ourselves or to joint venture the
property.
Post period under review the Company made a major acquisition in
the Kalahari Copper Belt, acquiring 19 exploration licences, which
amounts to 14,875 km (2) . At the same time, two other licences
were acquired in the Limpopo Mobile Belt, which is prospective for
nickel, platinum and copper.
A number of the licences are in the midst of previous
discoveries by competitors and have the potential to add
significant value to those discoveries as they progress into mining
operations. It is our opinion that the Kalahari Copper Belt will
emerge as one of the new global regional copper suppliers, with two
deposits already having completed feasibility study and one in the
course of construction.
Recent discovery of the high grade A4 Dome project by Sandfire
Resources Australia, who are a successful globally emerging copper
producer, has shown some extremely good results and the project is
likely to provide additional high-grade ore to their planned T3
Project development. We announced on 17 September 2020 that we were
preparing to conduct a helicopter borne high resolution
electromagnetic ("EM") survey over various areas within our tenure
package. That exercise has been completed and at the time of
writing, we are working with independent geophysicists to assess
the results and identify immediate drilling targets.
We made a further acquisition, as was announced 16 October 2020,
of Kalahari Copper Belt interest. The exploration concessions
contained in the acquisition are some 15km from the Boseto Copper
Project operated by Cupric Canyon Capital and are generally on
trend with other known discoveries in the vicinity. This
acquisition provided the Company with concessions which have
already demonstrated copper content from limited exploration
drilling to date. We intend to drill the projected strike and rank
its potential post the helicopter geophysical data assessment and
consequent recommendations.
We are extremely excited with this Kalahari acquisition and feel
that we are in the midst of an exciting copper belt, extremely well
positioned in relation to current planned mines and have the
possibility to generate completely new mine projects within our
property portfolio.
The directors are very confident for the future of the copper
price and support the view that copper prices will be strong in
2021 and even stronger for the next 3 years. Forecasters are
predicting that the copper supply will need to be doubled by 2030,
should normal consumption trends and growth develop. The
traditional copper regions around the world, particularly Chile,
have their problems with generating new mine capacity with
diminishing resources at existing mines. The supply issues, against
rising demand, should produce a disconnect which, will result in
much merger and acquisition activity between the juniors and the
majors.
The year has been operationally difficult, but extremely
positive, with Galileo being better placed currently than it was at
the start of the period.
I would like to thank all of my fellow directors and staff for
their support during the period under review. I would like to give
particular thanks to Andrew Sarosi, our former technical director,
who retired at the end of August 2020. Andrew is a metallurgist by
training, but contributed across the board, developing strong
corporate and contract skills during his employment with the
Company. We have welcomed on board, since Andrew's retirement, Ed
Slowey, who is a seasoned geologist, whose skills will greatly
assist our Kalahari development. We also welcome Joel Silberstein,
as the finance director for the Company.
I believe the Company is well positioned for the coming year and
look forward to providing our shareholders with value enhancement
that they certainly deserve.
Colin Bird
Chairman
CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEARED 31
March 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 March
2020
31 March 31 March
Figures in pound sterling 2020 2019
==================================== ================== ================
A s sets
Non- current assets
Intangible assets 3,348,019 2,855,856
In v estment in joint ventur es 1,834,710 2,156,507
L oans to joint ventur e s, associa
t es, and subsidiaries 291,442 444,004
Other financial assets 344,523 402,751
================== ================
5,818,694 5,859,118
================== ================
C urrent assets
T r ade and other receivables 2,228 42,920
Cash and cash equivalents 356,485 1,075
================== ================
358,713 43,995
================== ================
T o tal assets 6,177,407 5,903,113
===================================== ================== ================
E quity and liabilities
E quity
Share capital 26,469,319 25,440,319
Re serv es 621,131 461,554
Ac cumula ted loss (21,222,788) (20,580,601)
================== ================
5,867,662 5,321,272
================== ================
Liabilities
Non- current liabilities
Other financial liabilities 5 3,846
------------------ ----------------
5 3,846
------------------ ----------------
C urrent liabilities
T r ade and other pa yables 309,740 577,995
================== ================
T o tal liabilities 309,745 581,841
================== ================
T o tal equity and liabilities 6,177,407 5,903,113
===================================== ================== ================
These financial statements were approved by the directors and
authorised f or issue on 23 December 2020 and are signed on their
behalf by:
Colin Bird Joel Silberstein
C ompany number: 05679987
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31
March 2020
Figures in pound 31 March 31 March
sterling 2020 2019
----------------------------------------- ------------ ------------------ ------------------
Oper ating expenses (630,384) (404,303)
------------------ ------------------
Oper ating loss (630,384) (404,303)
In v estment revenue 2 3,993
Loss from equity accounted in v estments (11,806) (16,474)
================== ==================
L oss for the y ear (642,188) (416,784)
================== ==================
Other comprehensive income:
E x change differenc es on translating
foreign oper ations 26,078 (268,218)
================== ==================
T o ta l c omp r ehensi ve lo ss f or (685,002
the y e ar (616,110) )
================== ==================
L oss per share in pence (basic) (0.14) (0.14)
All operating expenses and operating losses relate to continuing
activities.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 March
2020
Figur es in F oreign
Pound S currency Ac
terling T o tal translation Merger Share based cumula
Share Share share r eserve r payment r T o tal r ted T o tal
capital premium capital (1) eserve(2) eserve(3) eserv es loss equity
============== ============ ================= =================== =========== ========== ================= ================ ============ =========
G r o up
B alance at 1
April 2018 5,865,231 19,080,088 24,945,319 (467,842) 1,047,821 149,793 729,772 (20,163,817) 5,551,274
============ ================= =================== =========== ========== ================= ================ ============ =========
L oss for the
y ear - - - - - - - (416,784) (416,784)
Other
comprehensive
income - - - (268,218) - - (268,218) - (268,218)
============ ================= =================== =========== ========== ================= ================ ============ =========
T o tal
comprehensive
loss for the
y ear - - - (268,218) - - (268,218) (416,784) (685,002)
============ ================= =================== =========== ========== ================= ================ ============ =========
Issue of shar
es net
of issue
costs 50,000 445,000 495,000 - - - - - 495,000
T o tal
contributions
by and
distributions
to owners of 50,000 445,000 495,000 - - - - 495,000
C ompany -
recognised
directly
in equity
============ ================= =================== =========== ========== ================= ================ ============ =========
B alance at 1
April 2019 5,915,231 19,525,088 25,440,319 (736,060) 1,047,821 149,793 461,554 (20,580,600) 5,321,273
============ ================= =================== =========== ========== ================= ================ ============ =========
L oss for the
y ear - - - - - - - (642,188) (642,188)
Other
comprehensive
income - - - 26,078 - - 26,078 - 26,078
============ ================= =================== =========== ========== ================= ================ ============ =========
T o tal
comprehensive
loss for the
y ear - - - 26,078 - - 26,078 (642,188) (616,110)
============ ================= =================== =========== ========== ================= ================ ============ =========
Issue of shar
es net
of issue
costs 253,215 909,284 1,162,499 - - - - - 1,162,499
Warrants
issued - (133,499) (133,499) - - 133,499 133,499 - -
T o tal
contributions
by and
distributions
to owners 253,215 775,785 1,029,000 - - 133,499 133,499 - 1,162,499
o f Company
recognised
directly in
equity
============ ================= =================== =========== ========== ================= ================ ============ =========
B alance at 31
March
2020 6,168,446 20,300,873 26,469,319 (709,982) 1,047,821 283,292 621,131 (21,222,788) 5,867,662
============ ================= =================== =========== ========== ================= ================ ============ =========
1. Foreign currency translation reserve comprises all foreign currency differences arising from the translation
of the financial statements of foreign operations.
2. Merger reserve comprises the difference between the fair value of an acquisition and the nominal value
of the shares allotted in a share exchange.
3. Share based payment reserve comprises the fair value of an equity-settled share based payment.
CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEARED 31 March
2020
Figures in Pound Sterling 31 March 31 March
2020 2019
=========================================== =============== ==========
Cash flows from oper ating activities
Cash used in oper ations (331,288) (302,518)
In v estment R evenue 2 3,993
=============== ==========
Net cash from oper ating activities (331,286) (298,525)
=========================================== =============== ==========
Cash flows from in v esting activities
Additions to intangible assets (290,232) (575,093)
Joint ventur es acquired - -
Net movement on group company loans (13,072) (159,608)
Net cash flows from in v esting activities (303,304) (734,701)
=========================================== =============== ==========
Cash flows from financing activities
Proceeds from share issues 990,000 495,000
T o tal cash movement for the y ear 355,410 (538,226)
Cash at the beginning of the y ear 1,075 539,301
=============== ==========
T o tal cash at end of the y ear 356,485 1,075
=========================================== =============== ==========
Statement of Directors' Responsibilities for the year ended 31
March 2020
-- The directors are required in terms of the Companies Act 2006
to maintain adequate accounting records and are responsible for the
content and integrity of the consolidated annual financial
statements and related financial information included in this
report. It is their responsibility to ensure that the consolidated
annual financial statements fairly present the state of affairs of
the Group as at the end of the financial year and the results of
its operations and cash flows for the period then ended, in
conformity with the applicable UK laws.
-- The consolidated annual financial statements are prepared in
accordance with International Financial reporting standards (IFRS)
and are based upon appropriate accounting policies consistently
applied and supported by reasonable and prudent judgments and
estimates. The directors acknowledge that they are ultimately
responsible for the system of internal financial control
established by the Group and place considerable importance on
maintaining a strong control environment. To enable the directors
to meet these responsibilities, the board sets standards for
internal control aimed at reducing the risk of error or loss in a
cost effective manner. The standards include the proper delegation
of responsibilities within a clearly defined framework, effective
accounting procedures and adequate segregation of duties to ensure
an acceptable level of risk. These controls are monitored
throughout the Group and all employees are required to maintain the
highest ethical standards in ensuring the Group's business is
conducted in a manner that in all reasonable circumstances is above
reproach. The focus of risk management in the Group is on
identifying, assessing, managing and monitoring all known forms of
risk across the Group. While operating risk cannot be fully
eliminated, the Group endeavours to minimise it by ensuring that
appropriate infrastructure, controls, systems and ethical behavior
are applied and managed within predetermined procedures and
constraints.
-- The directors are of the opinion, based on the information
and explanations given by management that the system of internal
control provides reasonable assurance that the financial records
may be relied on for the preparation of the consolidated annual
financial statements. However, any system of internal financial
control can provide only reasonable, and not absolute, assurance
against material misstatement or loss.
-- The going concern basis has been adopted in preparing the
consolidated annual financial statements. The directors have no
reason to believe that the Group will not be a going concern in the
foreseeable future, based on forecasts and available cash
resources. These consolidated annual financial statements support
the viability of the company. the directors have reviewed the
Group's financial position at the balance sheet date and for the
period ending on the anniversary of the date of approval of these
financial statements and they are satisfied that the Group has, or
has access to, adequate resources to continue in operational
existence for the foreseeable future.
Colin Bird Chairman
Joel Silberstein Finance director
Ed Slowey Technical director
J Richard Wollenberg Non-Executive director
Christopher Molefe Non-Executive Director
NOTES TO THE CONSOLIDATED AUDITED FINANCIAL STATEMENTS
1. Basis of preparation
The consolidated annual financial statements have been prepared
in accordance with International Financial Reporting Standards
IFRIC interpretations issued by the International Accounting
Standards Board and the Companies Act 2006. The consolidated annual
financial statements have been prepared on the historical cost
basis, except for certain financial instruments at fair value, and
incorporate the principal accounting policies set out below. Cost
is based on the fair values of the consideration given in exchange
for assets and they are presented in Pound Sterling. The accounting
policies applied are consistent with those of the previous
period.
The comparative figures for the financial year ended 31 March
2019 are not the Company's statutory accounts for that financial
year but the consolidated accounts. Those accounts have been
reported on by the Company's auditors and delivered to the
registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not give any reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under sections 498 (2) or (3) of the Companies Act 2006, relating
to the accounting records of the company.
2. Basis of consolidation
The consolidated annual financial statements incorporate the
annual financial statements of the Company and all entities,
including special purpose entities, which are controlled by the
Company. Control exists when the Company has the power to govern
the financial and operating policies of an entity so as to obtain
benefits from its activities. The results of subsidiaries are
included in the consolidated annual financial statements from the
effective date of acquisition to the effective date of disposal.
Adjustments are made when necessary to the annual financial
statements of subsidiaries to bring their accounting policies in
line with those of the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation. Non-controlling interests in
the net assets of consolidated subsidiaries are identified and
recognised separately from the Group's interest therein, and are
recognised within equity. Losses of subsidiaries attributable to
non-controlling interests are allocated to the non-controlling
interest even if this results in a debit balance being recognised
for non- controlling interest. Transactions which result in changes
in ownership levels, where the Group has control of the subsidiary
both before and after the transaction, are regarded as equity
transactions and are recognised directly in the statement of
changes in equity. The difference between the fair value of
consideration paid or received and the movement in non-controlling
interest for such transactions is recognised in equity attributable
to the owners of the parent.
3. Financial review
The Group reported a net loss of GBP 642,188 (2019: loss of GBP
416, 784). Basic loss is 0.14 pence (2019: loss of 0.14 pence) per
share. Operating expenses for the period under review amounted to
GBP 630,384 compared to GBP 404,303 (2019).
4. Segmental analysis
Business unit
The Company's investments in subsidiaries and associates, that
were operational at year-end, operate in two geographical locations
being South Africa and USA, and are organised into one business
unit, namely Mineral Assets, from which the Group's expenses are
incurred and future revenues are expected to be earned. This being
the exploration for and extraction of its mineral assets through
direct and indirect holdings. The reporting on these investments to
the board focuses on the use of funds towards the respective
projects and the forecasted profit earnings potential of the
projects.
The Company's investment in Zambia is not yet operational and
does not form part of the segmental reporting for the period under
review.
Geographical segments
An analysis of the loss on ordinary activities before taxation
is given below:
31 March 31 March
2020 2019
Rare earths, aggrega t es and iron ore and manganese South Africa (11,806) (16,474)
( 793
Gold, Copper USA (23,187) )
( 399,517
C orpor a te costs South Africa and United Kingdom (385,255) )
--------------------------- ------------
( 416,784
T o tal (420,248) )
--------------------------- ------------
5. Taxation
No provision has been made for 2020 tax as the Group has no
taxable income. The estimated Group tax losses available for set
off against future taxable income is GBP6,051,322 (2019:
GBP5,599,648). The Group has not reflected a deferred tax asset in
respect of the losses carried forward as the Group is not expected
to generate taxable profits in the foreseeable future.
6. Auditors' Report
These accounts have been reported on by the Company's auditors
and will be delivered to the Registrar of Companies. The report of
the auditors is unqualified but draws attention to material
uncertainty related to going concern without qualifying their
report and did not contain a statement under sections 498 (2) or
(3) of the Companies Act 2006, relating to the accounting records
of the company.
7. Availability of the Annual Report
This information has been extracted from the Company's Audited
Annual Report for the year ended 31 March 2020, copies of which
will be mailed to shareholders and a copy will also be available to
shareholders and members of the public in hard copy and free of
charge, from the Company's London office at 1st Floor, 7/8 Kendrick
Mews, London, SW7 3HD. Alternatively a downloadable version will be
available from 24 December 2020 from Company's website:
www.galileoresources.com .
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