Galileo Mining’s (ASX: GAL) wholly two of its owned subsidiaries have entered into a farm-in and joint venture agreement a subsidiary of Mineral Resources Limited (MinRes).
Under the agreement the company will sell 30% of all lithium rights on the Norseman tenement package for $7.5 million cash consideration.
“We are excited to add a lithium exploration joint venture to our ongoing exploration programs for PGEs and nickel at our Norseman Project,” Galileo’s Managing Director Brad Underwood said.
“The Norseman project has excellent lithium potential and is strategically located in the world’s most prospective region for lithium. The project’s outstanding location relative to existing infrastructure provides a short cut to development for any lithium resources discovered through the joint venture.”
Mr Underwood said Galileo will benefit from a focussed programme of lithium exploration by MinRes, one of Australia’s pre-eminent lithium companies, as well as increasing its cash reserves to aggressively pursue other high value resource discoveries at both its Norseman and Fraser Range projects.
“With $5 million of additional funding to be received within five days of execution of the agreement, a further $2.5 million to be received within 12 months, and $10 million in the bank , Galileo is fully funded to undertake all of its planned exploration programmes.”
From completion, the MinRes subsidiary and Galileo will form a 30% / 70% unincorporated joint venture. The MinRes subsidiary has the ability to increase its stake to 55% by sole funding an additional $15 million of exploration expenditure on the Tenements over the four years following completion.
The MinRes Subsidiary has the further ability to elect to increase its stake to 70% by sole funding expenditure through to a Decision to Mine. Upon the MinRes subsidiary earning a 70% interest, Galileo must elect to either remain in Joint Venture and contribute to Development Costs or convert its interest into a royalty.
