Audited Results for the year ended 31 March 2020

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 £1,000,000 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 £642,188 (2019: loss of £416,784). 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 £990,000 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 £163,020 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 £10,828

· 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, Chairman	Tel [phone]
Beaumont Cornish Limited - Nomad Roland Cornish	Tel [phone]
Novum Securities Limited - Broker Colin Rowbury/Jon Belliss	Tel [phone]
Shard Capital Partners LLP -Joint Broker
Damon Heath	Tel [phone]

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 YEAR ENDED 31 March 2020  

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 March 2020

Figures in pound sterling		31 March 2020	31 March 2019
A s sets
Non-currentassets
Intangible assets		3,348,019	2,855,856
Investment in joint ventures		1,834,710	2,156,507
L oans to joint ventures, associates, 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 serves		621,131	461,554
Accumulated 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 payables		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 for 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 YEAR ENDED 31 March 2020

Figures in pound sterling			31 March 2020	31 March 2019
Operating expenses			(630,384)	(404,303)
Operating loss			(630,384)	(404,303)
Investment revenue			2	3,993
Loss from equity accounted investments			(11,806)	(16,474)
L oss for the year			(642,188)	(416,784)
Other comprehensive income:
E x change differences on translating foreign operations			26,078	(268,218)
T o ta l comprehensivelossfortheyear			(616,110)	(685,002 )
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

FiguresinPoundSterling	Share capital	Share premium	T o tal share capital	F oreign currency translationreserve1	Merger reserve2	Share based payment reserve3	T o tal reserves	Accumulated loss	T o tal 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 year	-	-	-	-	-	-	-	(416,784)	(416,784)
Other comprehensive income	-	-	-	(268,218)	-	-	(268,218)	-	(268,218)
T o tal comprehensive loss for the year	-	-	-	(268,218)	-	-	(268,218)	(416,784)	(685,002)
Issue of shares 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 year	-	-	-	-	-	-	-	(642,188)	(642,188)
Other comprehensive income	-	-	-	26,078	-	-	26,078	-	26,078
T o tal comprehensive loss for the year	-	-	-	26,078	-	-	26,078	(642,188)	(616,110)
Issue of shares 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 YEAR ENDED 31 March 2020

Figures in Pound Sterling	31 March 2020	31 March 2019
Cash flows from operating activities
Cash used in operations	(331,288)	(302,518)
Investment Revenue	2	3,993
Net cash from operating activities	(331,286)	(298,525)
Cash flows from investing activities
Additions to intangible assets	(290,232)	(575,093)
Joint ventures acquired	-	-
Net movement on group company loans	(13,072)	(159,608)
Net cash flows from investing 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 year	355,410	(538,226)
Cash at the beginning of the year	1,075	539,301
T o tal cash at end of the year	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 £ 642,188 (2019: loss of £ 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 £ 630,384 compared to £ 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, aggregates and iron ore and manganese                                  South Africa	(11,806)	(16,474)
Gold, Copper        USA	(23,187)	( 793 )
C orporate costs                                                          South Africa and United Kingdom	(385,255)	( 399,517 )
T o tal	(420,248)	( 416,784 )

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 £6,051,322 (2019: £5,599,648). 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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