Galileo Secures Significant Lithium Agreement with Mineral Resources
- 03-Jun-2024 4:19 PM
- Journalist: Stella Fernandes
Galileo Mining Ltd (ASX: GAL, “Galileo” or the “Company”) is delighted to announce that its wholly-owned subsidiaries, Norseman Resources Pty Ltd and Ganymede Resources Pty Ltd (collectively “Galileo"), have entered into a farm-in and joint venture agreement (“Exploration JVA”) with ACN 654 242 690 Pty Ltd (“MinRes Subsidiary”), a fully owned subsidiary of Mineral Resources Limited (“MinRes”). Pursuant to this agreement, the Company will, upon the fulfillment of completion terms, divest 30% of all lithium rights held by Galileo on the Norseman tenement package for a cash consideration of $7.5 million (the “MinRes Transaction”).
Brad Underwood, Managing Director of Galileo, expressed, “We are thrilled to incorporate a lithium exploration joint venture into our ongoing exploration initiatives for PGEs and nickel at our Norseman Project. The Norseman project holds significant lithium potential and is strategically situated in one of the world's most promising lithium regions. Its exceptional location relative to existing infrastructure offers a streamlined path to development for any lithium resources uncovered through the joint venture. Galileo is set to benefit from MinRes' dedicated lithium exploration program, capitalizing on their expertise as one of Australia's top lithium companies. This collaboration will also enhance our cash reserves, enabling us to actively pursue additional high-value resource discoveries at our Norseman and Fraser Range projects. With an additional $5 million in funding to be received within five days of agreement execution, an additional $2.5 million within 12 months, and $10 million already secured, Galileo is fully financed to execute all planned exploration initiatives.”
Upon completion, MinRes Subsidiary and Galileo will establish an unincorporated joint venture with a 30% / 70% ownership split. MinRes Subsidiary has the option to increase its stake to 55% by solely funding an additional $15 million in exploration expenditure on the Tenements within four years of completion. Additionally, MinRes Subsidiary can opt to further increase its stake to 70% by funding all costs up to a Decision to Mine. Once MinRes Subsidiary secures a 70% interest, Galileo must choose either to remain in the joint venture and contribute to development costs or to convert its interest into a royalty.
MinRes conducted thorough due diligence prior to execution, and there are no conditions precedent to completing the transaction, which is anticipated to finalize within five business days of signing the Exploration JVA on May 30, 2024. The transaction will be completed under standard market terms, including a $5 million (plus GST) Tranche 1 payment by MinRes Subsidiary, the provision of relevant mining information by Galileo to MinRes Subsidiary, and the exchange of executed counterparty deeds by the parties as stipulated in the transaction.