Galileo Resources will exercise its option to acquire the Star Zinc project in Zambia through a joint venture with BMR Group. Galileo has raised around £1 million via a placing to fund the move and other projects.
In a statement, AIM-listed Galileo said it had entered into a binding agreement with BMR to conditionally advance the firm US$591,600 at an interest rate of 12% per annum. This is intended to be used to complete the exercise of the option.
Galileo plans to subscribe for a 51% equity stake in the JV through a new special purpose vehicle, to be named Enviro Mining Limited, which will be financed by cancellation of that loan.
Galileo’s chairman and CEO Colin Bird said: "The joint venture with BMR on the Star Zinc property gives us a position in the very promising Star Zinc resource close to Lusaka, Zambia.
“The availability of primary zinc deposits is diminishing and Star Zinc is open ended in both directions and depth with the strong possibility of other similar occurrences within the concession boundaries.
“Our first step will be to confirm the current non-JORC resource, followed by trenching and sampling of other areas and thereafter drilling."
Meantime, Galileo's broker Beaufort Securities has completed a placing to raise £1,093,450 before expenses.
In addition to its acquisition of interest in Star Zinc, Galileo said it intends to use the proceeds of the placing and a director's subscription to fund, amongst other things, follow-up exploration and drilling on its US gold property in Nevada, and advancing the company's Glenover Phosphate Project in South Africa.
In June, a major phosphate producer confirmed its desire to undertake a two-phase pilot plant phosphate flotation at Glenover.