Galileo Resourc Regulatory News (GLR)

Galileo Resources PLC

("Galileo" or "the Company" or "the Group")

Unaudited interim results for the six months ended 30 September 2020

Galileo (AIM: GLR), the exploration and development mining company, announces its unaudited interim results for the six-month period ended 30 September 2020. A copy of the interim results is available on the Company's website, www.galileoresources.com.

Operational Highlights

BOTSWANA

Acquisition of Exploration Assets in Botswana

Period under review

· Galileo acquired 100% of Botswana-incorporated Crocus-Serv (Pty) Ltd ("Crocus"), whose assets comprise of 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.

Post the period under review

· Galileo undertook a heliborne-EM geophysical surveying over several licences in its highly prospective Kalahari Copper Belt Project, specifically PL250/2018, PL251/2018, PL39/2018 and PL40/2018. Preliminary overview of the results is considered very promising, with the EM data interpreted to show several highly prospective geological settings for copper-silver mineralisation. Detailed data interpretation is under way, utilising Spectral Geophysics, a consultancy that was involved in the discovery of the A4 Dome deposit (targeted from EM data) and the Company will announce these conclusions once known. The most prospective EM targets will be selected for early drill testing.

· On 16 October 2020, Galileo completed (the "Completion Date") of the acquisition of 100% of Africibum Co Pty Ltd ("Africibum") and its interests in the North East Kalahari Copper Belt Project in Botswana. The Company acquired 100% of Africibum Co (Pty) Ltd, incorporated in Botswana (Company number 1828747) ("Africibum") and its 100% interest in five prospecting licences PL366/2018, PL367/2018, PL368/2018, PL122/2020, PL123/2020 and two mining tenement applications in Botswana (the "North East Kalahari Copper Belt Project").

· 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.

· On 25 January 2021 Galileo entered into two legally binding agreements with ASX listed Sandfire Resources Limited (ASX: SFR) ("Sandfire"). The first agreement being a conditional licence sale agreement (the "Licence Sale Agreement") and the second a share subscription agreement (the "Share Subscription Agreement"). The Licence Sale Agreement provides for the sale of 9 of the Company's Kalahari Copper Belt Licences (the "Included Licences") which the Company acquired in May and October 2020. Sandfire will pay an aggregate consideration of US$3 million payable on the Settlement Date of which US$1.5 million will be paid in cash and US$1.5 million by the issue of 370,477 Sandfire ordinary shares to the Company at an issue price of A$5.227 per share, being the VWAP of the Sandfire share price for the 10 trading days prior to the date of signing the Licence Sale Agreement. Under the terms of the agreements Sandfire committed to spend US$4 million on the Included Licences within two years of settlement and if the US$4 million is not spent, any shortfall will be paid to the Company. (Sandfire will have a first right of refusal in relation to the acquisition of the 15 Kalahari Copper Belt Licences being retained by the Company (the "Excluded Licences") ("ROFR: Excluded Licences"). Settlement is conditional upon:

o The parties having executed the Share Subscription Agreement;

o Ministerial consent for the transfer of the Included Licences by the Botswana Minister of the Ministry of Minerals, Energy and Water Resources ("Ministerial Consent");

o ASX and AIM regulatory approvals; 

o Approval of the acquisition of the Included Licences by the Competition Authority of Botswana (or confirmation from such authority or from either party's Botswana legal counsel that such approval is not required) ("Competition Approval");

o Duly executed transfers of the Included Licences in the form required by the Mining Act under which a 100% interest in the Included Licences may be transferred.

If the Ministerial Consent and / or the Competition Approval is not granted by the Long Stop Date (31 July 2021 or such later date agreed by the parties) the agreement shall automatically terminate and cease to have effect and no Party shall have any obligation or liability to any other Party.

ZAMBIA

Star Zinc & Kashitu

Period under review

· Galileo agreed an arrangement ("Arrangement") with BMR to assume the rights to BMR's Mauritian subsidiary, Enviro Mining Limited and its wholly-owned Zambian subsidiaries, which include, amongst other things the title to the licences for Star Zinc and Kashitu (zinc willemite) Projects. The Arrangement, which is subject to Zambian Ministry approval, is for nil consideration since the Company has earned-in its 95% right to the two projects. Galileo has decided to cease seeking Ministry approval and therefore will no longer be assuming the rights from BMR.

Post the period under review

· 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 focused on non-ferrous metals and concentrates.

SOUTH AFRICA

Glenover Phosphate Project ("Glenover")

Period under review

· Glenover continued to progress Department of Mineral Resources approval of its application for a mining right, for which the only outstanding matter remains a Record of Decision ("RoD") from the Department of Water and Sanitation ("DWS") on the proposed Tailings Storage Facility ("TSF") design.

· Glenover continued to identify potential investors in the Glenover project and initiated preliminary discussions, which are ongoing.

Post the period under review

· The final TSF design report was completed by Golder Associates (Pty) Ltd in November 2020 and has been submitted to the DWS for its RoD, with a decision expected during Q1 2021.

FUNDRAISING

Period under review

· In June 2020, the Company raised £900,000 before expenses (1 June 2020: AIM - RNS number 45490) by way of a placing of 112,500,000 Galileo ordinary 0.1p shares at a 14% discounted price of 0.8p per share. The Company intended to use the proceeds of the placing for general working capital towards exploration on the 15 Kalahari Copper Belt Licences in Botswana being retained by the Company under the Licence Sale Agreement and progressing its two Zambian zinc projects.

Post the period under review

· On 25 January 2021, the Company entered into a Share Subscription Agreement with Sandfire who agreed to subscribe for 41,100,124 ordinary shares of 0.1p in the Company ("Sandfire Shares") at a price of 2.68p per share, being a 25% premium to the 10 day VWAP of the Company's share price as at 22 January 2021, raising £1.1 million (US$1.5 million at current conversion rates). The Sandfire Shares will be issued at a premium of 17% to the closing mid-price of the Galileo Shares on 25 January 2021 of 2.30p and admitted for trading on AIM on or around 9 February 2021. This will represent a 4.62% interest in Galileo.

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Statement of Responsibility for the six months ended 30 September 2020

The directors are responsible for preparing the consolidated interim financial statements for the six months ended 30 September 2020 and they acknowledge, to the best of their knowledge and belief, that:

· the consolidated interim financial statements for the six months ended 30 September 2020 have been prepared in accordance with IAS 34 - Interim Financial Reporting, as adopted by the EU;

· based on the information and explanations given by management, the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the consolidated interim 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 interim financial statements and the directors of Galileo 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 interim financial statements support the viability of the Company; and

· having 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 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 and Chief Executive Officer

29 January 2021

STATEMENT OF CHANGES IN EQUITY as at 30 September 2020

Notes to the Financial Statements

1. Status of interim report

The Group unaudited condensed interim results for the 6 months ended 30 September 2020 have been prepared using the accounting policies applied by the Company in its 31 March 2020annual report, which are in accordance with International Financial Reporting Standards (IFRS and IFRC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU ("IFRS"), including the SAICA financial reporting guides as issued by the Accounting Practices Committee, IAS 34 - Interim Financial Reporting, , the AIM rules of the London Stock Exchange and the Companies Act 2006 (UK). This condensed consolidated interim financial report does not include all notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 March 2020 and any public announcements by Galileo Resources Plc. All monetary information is presented in the presentation currency of the Company being Great British Pound. The Group's principal accounting policies and assumptions have been applied consistently over the current and prior comparative financial period. The financial information for the year ended 31 March 2020 contained in this interim report does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

2. Basis of preparation

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 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. Segmental analysis

Business segments

The Company's investments in subsidiaries and associates, that were operational during the period, operate in four geographical locations being South Africa, Zambia, Botswana 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. An analysis of the loss on ordinary activities before taxation is given below:

An analysis of the assets and liabilities of the geographical segments as at 30 September 2020 are presented below:

An analysis of the assets and liabilities of the geographical segments as at 30 September 2019 are presented below:

4. Financial review

The Group reported a net loss of £ 366 945 (2019: £ 193 484) before and after taxation. Basic loss reported is 0.06 pence (2019: 0.03 pence) per share. Loss per share is based on a weighted average number of ordinary shares of 600 066 170 (2019: 345 966 425).

5. Share Capital

During the period under review the Company issued new ordinary shares as follows:

During the period under review the Company issued a total of 216,964,246 ordinary shares, through the placing of 112,500,000 shares for cash to raise £900,000 before expenses, 38,814,246 shares issued for the acquisition of its Botswana-incorporated Crocus-Serv (Pty) Ltd and further 65,650,000 shares through the exercise of warrants with total proceeds of £393,900.

Post the period under review to the date of this report, the Company issued 73,925,000 new ordinary shares as follows:

6. Going concern

The Group has sufficient financial resources to enable it to continue in operational existence for the foreseeable future, to continue the current development programme and meet its liabilities as they fall due. During the period under review the Group raised £900,000 before expenses and the Company has no external debt or overdrafts. Up to the date of this report the Group raised a further £1.1 million net of expenses.

The directors have further reviewed the Group's cash flow forecast, and in light of this review and the financial position at the date of this report, they are satisfied that the Company and Group have access to adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors consider it appropriate to continue to adopt the going-concern basis in preparing these financial statements. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

7. Changes to the Board

As announced on 4 September 2020, Andrew Sarosi has, because of his retirement, resigned as a director of the Company and its subsidiaries and Edward (Ed) Slowey has joined the Board as Technical Director on the same date. As announced on 7 October, Joel Silberstein was appointed Finance Director of the Company.