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(Alliance News) - Galileo Resources PLC on Thursday said offtake agreement talks with London-listed peer Jubilee Metals Group PLC are advancing and it targets mining Zambian projects in 2020.
The deal will see Galileo supply up to 60,000 tonnes per year of zinc ore from its Star Zinc And Kashitu projects to Jubilee. The ore grade will be no less than 14% Zinc, the company said, and the arrangement will last three years though could be extended further by mutual agreement.
Galileo said: "Payability is to be consistent with similar offtake agreements in the zinc market, typically based on a sliding scale against grade and price."
The company targets mining from the Zambian projects by the second quarter of 2020, subject the availability of further funding and the regulatory clearance.
Galileo is also assessing whether to contribute silver and germanium from the project as part of the offtake deal.
Chief Executive Colin Bird said: "Negotiations are advancing satisfactorily towards an industry normal arrangement and allows us to do the necessary administration and planning to bring the Projects into production. The projects offer the potential to provide consistent quantity and quality of ore to the refinery.
"Furthermore, the suitability of the potentially much larger Kashitu deposit and its vanadium content offers the opportunity of a long term sustainable ore supply. We look forward to concluding the arrangements and commencing exploration and then commencing testing on Kashitu as soon as practicable whilst advancing Star Zinc to production status."
Shares in Galileo were 2.9% higher at 0.53 pence each and Jubilee Metals shares were 1.6% lower at 3.10p apiece.
By Eric Cunha; ericcunha@alliancenews.com
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