Galileo Share Placing and Share Exchange

4 Jul 2012 16:56

4 July 2012 Galileo Resources Plc ("Galileo" or the "Company") Galileo Share Placing and Share Exchange

The Board of Galileo Resources Plc ("Galileo"), the AIM-quoted emerging African Rare Earth exploration company, is pleased to announce that the Company has entered into a Share Exchange Agreement (the "Exchange Agreement") with prospective AIM-quoted Praetorian Resources Limited ("Praetorian") and a subscription agreement with Praetorian for a placing of 2.5 million Galileo ordinary shares for cash ("Subscription Agreement").

Highlights of Exchange and Subscription Agreements include:

* Galileo agrees to exchange five million of its ordinary shares of GBP0.05 each at a strike price of GBP0.40 ("Exchange Shares") for four million Praetorian ordinary shares of nil par value which are expected to represent 9.98% of Praetorian's issued share capital on Admission (falling to 8.57% on admission of a further 6,566,020 Praetorian ordinary shares that are conditional on shareholder consents) (with Subscription Shares of nil par value attached on 1 for 2 basis) at a price GBP0.50 ("Share Exchange"). * Praetorian agrees to subscribe, for cash, for 2.5 million Galileo ordinary shares of par value GBP0.05 at GBP0.40 to raise GBP1 million (the "Issue").

The issue of Galileo Exchange Shares is conditional, inter alia, on the `Admission of the entire issued and to be issued Ordinary Shares and Subscription Shares of Praetorian to trading on AIM becoming effective in accordance with the AIM rules ("Admission"). The Company expects this to be around 9 July 2012.

The new Galileo ordinary shares are expected to be admitted to AIM on 10 July 2012. On the issue to Praetorian of the aggregate 7,500,000 new Galileo ordinary shares in respect of the above Agreements, the Company's issued share capital will be 83,057,183 and Praetorian's shareholding in the Company will be 9.03%.

The Share Exchange and the Issue will provide Galileo with an aggregate of GBP3 million of additional cash and marketable securities to provide additional working capital for the development of the Company's Glenover Rare Earth Project ("Glenover").

Praetorian is a newly formed natural resource focused investment holding company incorporated in Guernsey. The company's investment strategy is focused on investing in mining and energy stocks with depressed valuations arising, inter alia, during cyclic economic downturns. By arranging share exchanges the intent is to provide its investee companies with an additional means of raising capital in current market conditions. Praetorian is expected, on admission of its shares to AIM, to have GBP5.5 million in cash and to have made investments in resource companies totalling GBP17.3 million.

Praetorian's admission document will be available at www.praetorian.com.

Colin Bird, Chairman and Chief Executive Officer of Galileo Resources, commented: "We are pleased that Praetorian, a new resource focused investment holding company has selected Galileo as part of its core of investments. The Praetorian management comprises industry specialists both in corporate finance and resource stock selection. We are pleased to take part in this placing in Praetorian with the firm belief in Praetorian's underlying investment model."

Details of the Subscription Shares include:

The holder of Praetorian Subscription Shares of no par value will have the right, inter alia, to convert into Praetorian ordinary shares of nil par value on the basis of one Praetorian ordinary share for every one Subscription Share held, at the price of GBP0.70 per ordinary share, payable in full on subscription. The expiry date for conversion is the last business day in July 2015.

On Admission, the Subscription Shares will become fully detached from the Ordinary Shares and trade separately on AIM.

The Subscription Shareholder will not be entitled to any right of participation in the profits of Praetorian.

A copy of this announcement will be available on the Company's website www.galileoresources.com

For further information, please contact:

Colin Bird Tel +44 (0)20 7581 4477Chairman & CEOAndrew Sarosi Tel +44 (0) 1752 221937Technical DirectorBeaumont Cornish Limited, Tel +44 (0)20 7628 3396Nominated Advisor and BrokerRoland Cornish/James Biddle

Shore Capital Stockbrokers Limited Tel +44 (0)20 7408 4090

Joint BrokerJerry Keen/Toby GibbsBishopsgate Communications Tel +44 (0)20 7562 3350Nick Rome