Galileo reports recent progress at Luansobe copper project

6th Sep 2024 11:12

(Sharecast News) - Galileo Resources updated the market on the development of its Luansobe copper project in Zambia on Friday, where it holds a 75% interest.

The AIM-traded firm said the project, which now has a small-scale mining licence, had shown potential for multiple resources, including open pit, shallow underground, and deeper underground mineral deposits.

External consultants had been engaged to generate a mining schedule, helping to facilitate contractor negotiations and explore a variety of development options.

The board said a key consideration was whether to split the project into separate mining and processing operations - a move that could optimise resource development and enhance shareholder returns.

Various commercial options were being explored, including contractor mining with in-house processing, external toll treatment, or combining both mining and toll treatment under a single provider.

The board said it was consulting with external experts to determine the best approach for maximising the project's value.

It said the project's initial optimisation study highlighted several opportunities, including the potential inclusion of low-grade ore and overburden ore, which could improve overall production efficiency.

Sensitivity analysis on the open pit scenarios suggested that extending pit depth to 220 metres using a 0.25% copper cut-off could yield 9.12 million tonnes of ore, with a total copper production of around 70,000 tonnes.

A shallower pit at 160 metres with a 0.5% cut-off could produce 4.41 million tonnes of ore and 40,000 tonnes of copper.

The external consultants would now complete detailed mine design and life-of-mine scheduling to assist potential contractors in their offers and tenders.

Additionally, Galileo said there was potential for further resource expansion, particularly in shallow underground mineralisation previously excluded due to limited drilling, and deeper mineralisation that could be explored in future deep-level drilling strategies.

The board said it remained focused on selecting the best options to move the project forward, with production dependent on factors such as permitting and funding availability. "We are very pleased with our Luansobe acquisition - the investment was based on previous work and since acquiring the project we have also carried out fieldwork, drilling programmes, relogging historic core, modelling for resource and engineering financial modelling," said chairman and chief executive officer Colin Bird.

"The work we have carried out confirms that the project has the potential to be a large-scale mining project close to existing processing facilities, large and small notwithstanding the Mufulira mine.

"We have interrogated more than 300 boreholes collared within the licence and we are now confident of the orebody architecture but more importantly, through engineering modelling have identified blocks of ore which can fit into the open pit and shallow UG that is transformative for our original expectations for the pit."

Bird said the work was carried out in conjunction with a third-party engineering consultant, Sound Engineering Solutions, adding that the firm was now convinced that it had a two and possibly three stage project with a substantial copper ore resource suitable initially for O/P mining, potentially followed by a large-scale UG operation.

"Naturally, a project of this size and definition has attracted considerable interest from third parties and as such we have entertained numerous enquiries concerning potential involvement in varying ways.

"The board of Galileo is acutely aware that embarking on a particular development route would probably be exclusive to other routes thus removing the optionality of best value outcome for the Galileo shareholders.

"We remain open to the various options tabled and recognise the need to select the optimum option to satisfy shareholder expectations."

At 1025 BST, shares in Galileo Resources were down 13.76% at 0.91p.

Reporting by Josh White for Sharecast.com.