For immediate release

07 March 2022

Galileo Resources Plc

("Galileo" or "the Company")

Option Agreement over

Lithium & Gold Projects, Zimbabwe

Galileo Resources plc ("Galileo "or the "Company") is pleased to provide details regarding an assignment agreement entered into on 4 March 2022 (the "Deed of Assignment") which assigns to Galileo an option granted under an agreement dated 21 January 2022 between BC Ventures and Cordoba Investments Limited (the "Principal Agreement")  to acquire a 51% interest in B.C. Ventures Limited ("BC Ventures") (the "Option"). BC Ventures is the owner of a highly prospective lithium project in Southwest Zimbabwe (the "Kamativi Lithium Project") and two gold licenses (the "Bulawayo Gold Project") close to Bulawayo (the "Projects") through its wholly owned Zimbabwe subsidiary Sinamatella Investments (Private) Limited.

Technical Highlights

·     Kamativi Lithium Project

  The  Kamativi Lithium Project comprises EPO 1782 and lies on the Kamativi Belt directly adjacent to, and along strike from the historic Kamitivi tin-tantalum mine which operated from 1936 to 1994, where there are active plans by the Zimbabwe Mining Development Corporation to produce lithium from mine tailings

  First-pass grab sampling within the project area by GeoQuest, who are  a fully independent Southern and Central African based geological consultancy and contracting group, has confirmed lithium-bearing minerals in pegmatites based on preliminary AAS and XRD results and the ground is considered highly prospective for pegmatite-hosted lithium and associated mineral, past exploration having focussed on tin and tantalum.   

  There is extensive historical raw and exploration data on the Lithium Project and work will commence with the objective of drill testing as soon as targets have been prioritised.

·     Bulawayo Gold Project

  The Bulawayo Gold Project comprises EPO 1783 and EPO 1784 and covers a large 1,300 sq km licence area near Bulawayo with extensive Greenstone Belt rock formations that are host to many small to mid-size quartz reef gold mines and deposits in Zimbabwe.

  The Bulawayo Gold Project licences have good prospectivity for extensions of known gold deposits based on an initial assessment by Geoquest, as well as new discoveries under thin sand and rock cover using modern exploration techniques as there has been no systematic exploration for over 25 years.

  Recent grab samples undertaken by Geoquest on the licence area report assay values ranging from 3.9 - 16g/t Au.

  The target is to explore for resources to support the development of a large scale mine.  The licences adjoin and enclose a number of small scale gold mines on pre-existing mining permits which provides the opportunity to integrate the production from these operations which have a total historic production reported as more than 1Moz Au.

  Galileo plans to integrate multiple regional datasets to focus exploration on drill targets with potential for high-grade 'reef' deposits and/or bulk mining potential of a cluster of such deposits.

Transaction Highlights

·     Under the Principal Agreement;

  the Option is for Galileo to earn an initial 51% interest in the Gold and Lithium Projects in Zimbabwe by spending US$1.5m on exploration and evaluation by 21 January 2024 and paying US$100,000 to BC Ventures by 7 March 2022; and

  GeoQuest who are an independent southern and Central African based geological ( mineral exploration) consultancy and contracting group will conduct the exploration overseen by the technical committee which will comprise 2 representatives from Galileo, 2 from BC Ventures and be chaired by one of the Galileo representatives.

·     Under the Deed of Assignment Galileo will issue 13,741,609 Galileo shares (the "Consideration Shares") based on the 5 day VWAP on the date of this announcement being 1.1pence to settle £150,000 due to Cordoba for assigning their rights and obligations under the Principal Agreement containing the Option to Galileo. The Consideration Shares are subject to the lock up and orderly market arrangements detailed below.

Colin Bird Chairman & CEO said: "This is a significant investment for Galileo, in that we have an option to acquire a controlling interest in what we consider an highly prospective lithium project in Southwest Zimbabwe.  The project is adjacent to the Kamativi Mine, which produced tin for many years, closing in 1994.  The pegmatites in the area are known to contain lithium bearing minerals, as well as tantalum and tin and the pegmatites will be the focus of our exploration programme.

In addition, we have an option to acquire a controlling interest in two gold licences, which are in the midst of small producing gold mines near Bulawayo, where we have a good understanding of the structural controls and believe there is a propensity for a significant new gold discovery, notwithstanding the opportunity to small scale mine in the short term.  This is our first foray into Zimbabwe, where foreign investment is being welcomed and the country has excellent potential in many commodities as well as good infrastructure support."

Summary of Transaction

On 21 January 2022, Cordoba and BC Ventures entered into an option agreement (the "Principal Agreement") which provided Cordoba with an option to acquire 51% of BC Ventures  by funding US$1,500,000 of exploration expenditure within 2 years for BC Venture's 100% owned Zimbabwean subsidiary  Sinamatella Investments (Private) Limited ('Sinamatella') holds three Exclusive Prospecting Orders ('EPOs') No's 1782, 1783 and 1784 in the Kamativi Regional, 'Bulawayo North' and 'Bulawayo South' areas in the Republic of Zimbabwe. EPO 1782 is primarily prospective for lithium (tantalum, niobium, tin, tungsten, REE's and copper) whilst EPO5 1783 and 1784 are primarily prospective for gold.  The three EPOs were issued on 12 March 2021 and have a term of 3 years.

On 4 March Galileo entered into a Deed of Assignment with Cordoba and BC Ventures (the "Deed of Assignment") under which Cordoba has assigned all its rights and obligations under the Principal Agreement to Galileo for £150,000 which is being settled by the issue of 13,741,609 new ordinary Galileo Resources plc shares which will rank pari passu with existing Galileo Resources plc shares and will be subject to the lock up and orderly market arrangements described below under the heading Lock up and orderly market arrangements in relation to the Consideration Shares.

Kamitivi Lithium Project

Zimbabwe is recognised as one of the most prospective countries in Africa for pegmatite-hosted lithium. Prospect Resources Ltd (ASX: PSC) estimates that its Arcadia open pit lithium deposit, hosted within a stacked series of pegmatite dykes, contains JORC-compliant proven and probable ore reserves of 37.4Mt, grading at 1.22% Li₂O and 121ppm Ta₂O₅. China's Zhejiang Huayou Cobalt recently announced that it had agreed a deal to purchase 100% of the project for US$422m.

Adjacent to the Lithium Project area, the Kamativi mine operated from 1936 to 1994, producing 37,000 tonnes of tin and 3,000 tonnes of tantalum ore from pegmatites. In 2018 Chimata Gold Corp (Zimbabwe Lithium Company) announced a new JORC (2012) compliant Indicated Mineral Resource of 26Mt @ 0.58% Li₂O within the Kamativi mine tailings, confirming that the mine contained significant quantities of lithium.

Sinamatella's 520km² licence area in western Zimbabwe encloses extensions and splays of the Kamativi Tin Mine host unit, including mapped pegmatites. It has been reported by [whom] in [when] that there are old tin-fluorite workings within the Sinamatella property and recent grab samples from the west of property report lithium in old mica-tourmaline workings, confirming the potential for new lithium discoveries. Little new exploration has been carried out in the past 25+ years.

The licence area also contains a large extent of the pre-Cambrian Malaputese Formation which is considered to be strongly prospective for VMS hosted copper, surrounding the old Gwaii River Copper Mine and including numerous other copper prospects and occurrences.

Very good historical raw data and baseline information datasets exist and are available to be used to advance the Lithium Project.

Galileo plans to integrate the multiple regional datasets to focus exploration on recorded zones containing numerous large pegmatites and quartz veins within the highly prospective Kamativi Belt, as well as contact zones with surrounding granites and gneisses with old tin workings.

Bulawayo Gold Project

Zimbabwe has long been a significant gold producer, primarily from Greenstone Belt quartz 'reef' deposits. The largest current producer is Caledonia Mining Corporation Plc from its Blanket Gold Mine, which currently operates at a depth of about 750m below surface on multiple ore shoots and produced approximately 55,000 ounces of gold in 2019. A new deepening of the mine will raise production to 80,000 ounces from 2022 and extend mine life. To date, in excess of 1 million ounces of gold have been produced from the property.

The Sinamatella contiguous licences cover a large 1,300km² area near Bulawayo in west-central Zimbabwe. They cover highly prospective Greenstone Belt geology with several past producing small to mid-size gold mines, with production reported totalling >1Moz Au, e.g. Queens Group (440,000 oz Au at 6-20g/t), as well as many smaller occurrences.

Sinamatella's licences enclose the area of these mines, although some of the mines and advanced prospects are covered by pre-existing mining permits; however, other  known gold mine prospects and potential strike continuations lie within the Sinamatella ground.

Gold typically occurs in quartz 'reef' and shear zone settings. No systematic exploration has been carried out for more than 25 years due to the previously unfavourable investment climate in Zimbabwe during that time. Prospective areas with thin sand/alluvial/Karoo basalt cover have never been explored. Recent grab sampling on the property by GeoQuest reports assays ranging from 3.9-16g/t Au, confirming the prospectivity of the ground.

As with Kamativi, there is excellent potential for integration of multiple regional datasets to focus exploration on priority targets. Galileo will undertake this work through GeoQuest  which has such datasets available and can manage exploration in Zimbabwe for Galileo.

Summary of Principal Agreement which has been assigned to Galileo such that the rights and obligations of Cordoba under the Principal Agreement have been assigned to Galileo

The Principal Agreement was entered into between Cordoba and BC Ventures on 21 January 2022  and has the following terms:

i.     Cordoba was given an exclusive option to earn a 51% interest BC Ventures by;

a.    making a payment of US$50,000 within 10 days of signing (which has been paid) and a further US$100,000 within 45 days of the Principal Agreement which has not been paid and is due to be paid by 7 March 2022; and  

b.    spending a minimum of US$1.5 million (net of any due diligence, legal, or administrational fees) on exploration works on the Projects within a maximum of 24 months.

ii.    Once the Option has been exercised, BC Ventures and its Projects shall be re-valued by an independent 3rd party to be agreed by both parties prior to any new money being raised or injected into the Company. The original shareholders of BC Ventures will subsequently contribute pro-rata to exploration funding above and beyond the initial US$1.5 million or dilute their respective shareholding in BC Ventures and the Projects via a straight-line dilution formula.

iii.   The original shareholder of BC Ventures shall have the right, at any time from the date of the agreement, to convert up to 29% of their shareholding in the Company into publicly listed company shares in accordance with a valuation conducted by an independent 3rd party to be agreed by the parties. The original shareholders of BC Ventures will, however, retain a minimum shareholding of 20% in BC Ventures and the Projects through into production or sale.

iv.   Should a bone fide independent 3rd party offer to acquire BC Ventures or any of its Projects then both parties shall have 'tag along and drag along' rights.

v.    Neither party may sell its interest in BC Ventures or the Projects without first offering its interest to the other party (the 'Offeree'). The Offeree shall have 45 days to exercise its pre-emptive rights.

vi.   A technical and operational management committee will be formed with 2 representatives from each party and the chairman to be nominated by Cordoba;

vii.  The Parties commit to carrying out all geological (mineral exploration and evaluation) works in accordance with international best practice (i.e. with the latest International JORC, N143 101, SAMBEC or PERC Codes governing the industry) with the work to be carried out by GeoQuest who are an independent southern and Central African based geological ( mineral exploration) consultancy and contracting group.

viii.                The Parties agree that should the Projects, at any stage, fail to meet ongoing prospecting criteria, they will be returned in their entirety to the original shareholders of BC Ventures.

Summary of Deed of Assignment under which Galileo has been assigned all Cordoba's rights and obligations under the Principal Agreement

The Agreement was entered into on 4 March between Cordoba as Assignor, Galileo as Assignee and BC Ventures as the Continuing Party the has the following terms:

i.              Cordoba assigns to  Galileo Cordoba's Future Rights and Future Obligations under the Principal Agreement

ii.             BC Ventures has consented to the assignment and assumption evidenced by the Deed and confirmed the Principal Agreement remains in full force and effect;

iii.            confirms the initial payment of US$50,000 due under the Principal Agreement has been paid by Cordoba but the payment of US$100,000 due on or before 7 March  has not been paid;

iv.           confirms BC Ventures and Sinamatella are in good standing, and have no liabilities, and that Sinamatella owns the Project licences;   

v.            Recognises that the BC Ventures and the Galileo have various mining projects and may in the future participate for their own account in mining projects inside and outside the Republic of Zimbabwe separate from their participation in the exploration and development of the Projects and agrees  Galileo and BC Ventures agree to work closely in the utmost good faith towards one another all projects within 25 kms of the boundary of any of the Projects  shall be registered to Sinamatella and included as an additional project the subject of the terms of the Principal Agreement

vi.           Galileo and  BC Ventures agree that the valuation of the BC Ventures on the date of the Deed of Assignment is US$2,941,176 and this valuation shall be a starting reference valuation prior to any new valuation being made as per the Principal Agreement if a) the original shareholders of the BC Ventures wish to sell up to 29% of their 49% shareholding in the BC Ventures which is not subject to the option in the Principal Agreement and b) the Galileo wishes to purchase up to a 29% shareholding in the BC Ventures from the shareholders of the BC Ventures.

Consideration under Deed of Assignment: Galileo shall issue to Cordoba, or its nominees, £150,000 of Galileo shares (the "Consideration Shares") based on the 5 day VWAP of the Galileo's share price on the date of this announcement.

Lock up and orderly market arrangements in relation to the Consideration Shares: The Consideration Shares are to be the subject of the following lock up and orderly market arrangements and cannot be sold during the lock up periods. During the orderly market period shall first be offered for sale by the Galileo's company broker at a price no lower than the shares have traded in the previous 5 days (the "Nominated Price") and if not sold by the Galileo's company broker within 10 business days may be sold via another broker at the Nominated Price or higher.

Further information in relation to BC Ventures: BC Ventures is privately owned and registered in the Bahamas and was established as a mineral exploration (prospect generator) company and has remained dormant until the current date and has never traded or operated commercially and owns 100% of Sinamatella Investments (Private) Limited ("Sinamatella").  Sinamatella was incorporated in Zimbabwe to apply for mineral exploration licenses and was awarded Exclusive Prospecting Orders (EPOs) 1782, 1783 and 1784 on 12 March 2021 which are its only assets. Since the issue of the EPOs Sinamatella have paid the EPO application and initial year's licence fees of Zimbabwe Dollars 119,896 (approx. US$1,000). 

Application to trading on AIM: Application will be made to the London Stock Exchange for a total of 13,741,609  new Galileo Shares to be admitted to trading on AIM which rank pari passu to the existing ordinary shares in the Company. It is expected that Admission will become effective and that dealings in the new Galileo Shares will commence at 8.00 a.m. on or around 10 March 2022.

On Admission, 1,110,688,453 Ordinary Shares (the "Enlarged Share Capital") may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Galileo under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

Technical Sign-Off: Technical information in this announcement has been reviewed by Edward (Ed) Slowey, BSc, PGeo, Technical Director of Galileo. Mr Slowey is a geologist with more than 40 years' relevant experience in mineral exploration and mining, a founder member of the Institute of Geologists of Ireland and is a Qualified Person under the AIM rules. Mr Slowey has reviewed and approved this announcement.

You can also follow Galileo on Twitter: @GalileoResource

For further information, please contact: Galileo Resources PLC

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

Technical Glossary