Galileo Resources (AIM:GLR) has agreed to sell wholly owned subsidiary Virgo, owner of Botswana prospecting licences PL039/2018 and PL040/2018, to Metal Capital, a Sandfire Resources group company, for US$3m payable on completion plus a one‑off conditional Success Payment of US$20m-US$80m.
The Success Payment is payable only if the first qualifying JORC Ore Reserve on the licences contains at least 400,000 tonnes of contained copper, with US$20m for 400-600kt, US$40m for 600-750kt and US$80m for at least 750kt, and is due within 30 days of Sandfire announcing the triggering Ore Reserve.
"The structure of the transaction provides for consideration now and a significant future success payment if our belief in the potential of the Prospecting Licences is realised," said Colin Bird, Chairman.
Under the agreement Metal Capital has committed to spend US$4.5m on exploration within three years, including US$2.25m in the first 18 months, at least US$2.7m on drilling and assaying, and, subject to approvals, to complete a minimum of 4,000 metres of drilling by 31 December.
Completion is conditional on ministerial consent in Botswana, any required ASX and AIM regulatory approvals and confirmation or grant of Botswana Competition Approval, with a long stop date of 15 September.
Galileo's group accounts to 31 March 2025 carried the assets at £1.19m and Virgo recorded an attributable loss of £117,000 for the year to that date, and the company expects to report a profit on the disposal in its audited accounts for the year ended 31 March 2027.
