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The demand for green metals like nickel, copper, and cobalt used in batteries and energy storage systems is high, thanks to green energy initiatives that are being underway or in pipeline across the world. Australia with its mineral rich regions like Western Australia and numerous mining companies are well positioned to cater to the world’s needs. In this backdrop let us take a look at one such miner whose share price zoomed 600% in last six months.
Galileo Mining Ltd (ASX:GAL), Western Australia focused mineral explorer Galileo Mining Limited, is a base metals discoverer in Australia. The Company explores large scale nickel copper deposits and high-grade nickel-copper-cobalt resources at its projects. Galileo Mining’s key project regions are-
- The Fraser Range project- covering exploration licenses for over 600 square kilometers in the Albany-Fraser Orogen.
- Norseman project- located near the Western Australian town of Norseman having infrastructure, for gas, water and electricity facilities, along with transportation access.
Galileo Mining’s latest mineral discovery
At its Norseman project in WA, Galileo Mining has got significant mineralisation of precious metals like palladium, platinum, and gold. There were six discovery drill holes dug by Galileo Mining Ltd. which have given Galileo hopes of achieving high-quality mining resources.
Image Source © 2022 Kalkine Media®
In addition, Galileo has also found multiple PGE-nickel-copper targets at its Jimberlana and Mission Sill prospects offering further discovery potentials. Notably, Galileo has control of virtually the entire prospective areas. However, the discovery renamed as ‘Callisto’, is on a granted mine lease and will only convert to a resource if drilling is successful.
For this Galileo Mining has launched a reverse circulation (RC) drilling program at the Callisto discovery recently. The program is focused on the earlier drilled six holes that had struck palladium-platinum-gold-copper-nickel sulphide intersections. Results from the intersections also included rhodium a corrosion resistant, non-radioactive, catalytic metal. The new batch of drilling at Callisto will include around 20 holes. The drilling is expected to expand the earlier results. As per the management, the extensive prospective strike, combined with thick and consistent mineralisations indicate a potentially large mineralised system. Also, the management believes, that the company is fully funded (as at March end) and in a position to continue aggressive exploration programs.
A scrutiny GAL’s cash flow
If we analyse the last five year’s cash flow statement of Galileo Mining, we can see that the company does generate a positive net cash balance from its operating, investing and financing activities.
Image source-©2022 Kalkine Media ®
Also, the liquidity position of Galileo Mining supports the managements comment on funds availability
Image source-©2022 Kalkine Media ®
While the Current ratio shows Galileo’s ability to pay short term obligations, the quick ratio is a more stringent measure of the same. The quick ratio is often considered an important metric for evaluating mining companies as they often incur substantial capital expenditures and are in need of financing for operations.
How is GAL share price performing on the ASX?
In comparison to the ASX300 Metals and Mining index (XMM) and the ASX200 Materials sector index (XMJ), GAL share price has seen a much larger appreciation. GAL shares have moved up by about over 600% in the last six months.
Image source-©2022 Kalkine Media ®
GAL share price has gained over 103% in the last one month alone.
A major reason behind the price push is the Callisto discovery which has seemingly created a positive sentiment on GAL. Also, the demand supply scenario of the minerals discovered and their future revenue potential for Galileo Mining also appear to have helped.
Bottom line
The share price appreciation ASX and the potential precious metal discoveries make the miner’s shares noteworthy, more so given the current market conditions across the globe. A lot depends on how the company is able to use its resources optimally and make the best of the ensuing opportunities.
