Galileo Resources PLC (AIM:GLR, FRA:2GA) said all conditions have been met in its deal with Sandfire Resources for the Kalahari copper belt licences in northern Botswana and the transaction is expected to complete on September 22.
At completion, Sandfire will pay Galileo US$1.5mln in cash to acquire nine licences and Sandfire will subsequently issue 370,477 shares, presently worth A$2.43mln, to the company.
Sandfire will then retain a right of first refusal in relation to thirteen Kalahari Copper Belt licences retained by Galileo.
“The completion of this transaction with Sandfire represents a major step forward for Galileo in its Kalahari Copper Belt endeavours,” said chief executive Colin Bird.
“We are pleased to be working with Sandfire Resources, who are a successful Australian copper and gold producing company with a market capitalisation of over A$1bn and a large copper silver mine development programme in Botswana where they have recently been awarded a mining licence and we look forward to our association with them.
“Sandfire have a significant position in the Kalahari Copper Belt and hence we feel that this arrangement will benefit both parties to further enhance their positions.”
Galileo retains certain other rights through the deal. Within one month of completion, Sandfire is due to reimburse Galileo up to US$500,000 of past exploration expenditure. Additionally, Sandfire is committed to spending US$4mln on the acquired licences over the first two years, otherwise a certain portion of the shortfall will be paid to Galileo.
The London-listed company will also be due for a one-off success payment upon the first ore reserve, reported under JORC Code, in excess of 200,000 tonnes of contained copper. The size of the payment will range from US$10mln to US$80mln depending upon the size of the reserve.
Bird added: “The transaction allows Sandfire to explore the Included Licences, which are in close proximity to their major mine build, and also allows Galileo to carry out exploration on the excluded licences in the Kalarahi Copper Belt which is part of the Northwest Botswana Rift which the USGS in 2015 reported as the world’s most prospective area for yet-to-be discovered sediment hosted copper deposits.”
Bird said the company expects to announce the results of its recent exploration in Botswana soon.