en.Wedoany.com Reported - Copper and battery metals mining and exploration company Galileo Resources has announced an agreement to sell its wholly-owned subsidiary Virgo Business Solutions to Metal Exploration Capital, a subsidiary of ASX-listed Sandfire Resources. Virgo holds a copper exploration license in Botswana. The transaction includes a $3 million advance payment, along with future success payments contingent on project developments, ranging from $20 million to $80 million, depending on the amount of copper contained in the project's first qualifying ore reserve estimate.
The success payment will be made in cash within 30 days of the ore reserve announcement. The $3 million advance consideration comprises: $1.5 million paid for the sale of shares, along with the repayment, settlement, and discharge of related loans; and an additional $1.5 million paid by the buyer to the seller's guarantor as a parent company guarantee fee. The success payment will be triggered if the first announced qualifying ore reserve contains at least 400,000 tons of copper, and is also subject to the success of future exploration activities.
Galileo's board reminds shareholders that the success payment depends on future exploration success and therefore cannot be guaranteed, as these exploration licenses have no defined mineral resource estimates. Galileo Chairman Colin Bird stated that from Galileo's perspective, this transaction is strategically significant because the company's high-potential project portfolio and human resources are primarily located in Zambia and Zimbabwe, enabling it to better focus on and advance projects there. The transaction structure provides current consideration, and if the belief in the exploration license's potential is realized, a substantial success payment will be obtained in the future.
Following the agreement, Galileo will receive and utilize the total advance cash consideration to invest in the company's main projects in Zambia and Zimbabwe. The final deadline for meeting the agreement conditions is September 15. The agreement is governed by and construed in accordance with Botswana law, with Galileo and Metal Exploration Capital each providing representations and warranties common to such agreements.
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