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LONDON (Alliance News) - Galileo Resources PLC Tuesday said it will focus its exploration on the Silverton project in the US moving forward but also fast track evaluation work on its recently acquired Concordia project in South Africa.
The US-focused gold and copper company reported a GBP170,971 loss in the six months ended September 30, narrowing from the GBP276,974 loss reported a year earlier after operating expenses dropped to GBP177,018 from GBP296,591. The company does not generate any revenue.
During the period, the company extended its holding over its US exploration properties in Nevada in the US until August 2016. Galileo is currently interested in the Gabbs, Silverton, Ferber and Crow Springs gold and copper projects in Nevada, and holds stakes in the Glenover rare earth and Concordia copper projects in South Africa.
Galileo will focus its exploration mainly on the Silverton project moving forward, where it has identified a "significant" gold exploration target around a recognised shear zone.
However, it also signed a binding and exclusive memorandum of understanding to earn up to an 80% stake in the Concordia project after the end of the first half. Galileo plans to fast track modelling and evaluation work on the project so it can compare it to peer projects.
Importantly, Galileo only had a cash balance of GBP220,807 at the end of September, slightly higher than its balance reported a year earlier. The company did not provide any update in terms of funding.
Galileo Chairman Colin Bird said although the commodity rout is being dictated by "oil and doom and gloom over China", the long term fundamentals for copper remain strong with "most forecasters" predicting copper demand will double by 2023, highlighting that it takes around eight years to get a new mine up and running.
"The board of Galileo finds a massive disconnect between major copper companies behaviour and the aforementioned expectation for future copper demand: in-house exploration budgets have been slashed, joint ventures terminated and new copper mine development put on ice. This experience has shown us that these situations can change rapidly and when they do merger and acquisition activity becomes dominant in the arena," said Bird.
The company has an option that expires at the end of February 2016 to sell its 34% stake in the Glenover rare earth project in South Africa to Fer-Min-Ore. However, it did not provide guidance on whether it will exercise this option.
Galileo shares were down 1.9% to 1.32 pence per share on Tuesday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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