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Galileo (LSE:GLR) Resources provided an update on the development of its Luansobe copper project in Zambia on Friday, where it holds a 75% interest. The AIM-traded company reported that the project, now operating under a small-scale mining licence, has demonstrated potential for multiple resource types, including open pit, shallow underground, and deeper underground deposits.
External consultants have been engaged to develop a mining schedule, which will aid in contractor negotiations and explore various development strategies. The board is evaluating whether to divide the project into separate mining and processing operations, a strategy that could optimize resource development and potentially enhance shareholder returns.
Several commercial options are under review, including contractor mining with in-house processing, external toll treatment, or a combination of mining and toll treatment managed by a single provider. The board is consulting with external experts to identify the most effective approach for maximizing the project’s value.
The initial optimisation study for the project highlighted several opportunities, such as incorporating low-grade ore and overburden ore to improve overall production efficiency. Sensitivity analysis on open pit scenarios indicated that extending the pit depth to 220 meters with a 0.25% copper cut-off could yield 9.12 million tonnes of ore, with a total copper production of approximately 70,000 tonnes. Alternatively, a shallower pit at 160 meters with a 0.5% cut-off could produce 4.41 million tonnes of ore and 40,000 tonnes of copper.
The consultants will now focus on detailed mine design and life-of-mine scheduling to assist potential contractors in preparing their offers and tenders. Additionally, there is potential for further resource expansion, particularly in shallow underground mineralisation that was previously excluded due to limited drilling, as well as deeper mineralisation that could be explored with future deep-level drilling strategies.
Colin Bird, chairman and CEO, expressed satisfaction with the Luansobe acquisition, noting that the investment was based on previous work and subsequent fieldwork, drilling programmes, and core relogging. The project is believed to have the potential for large-scale mining, with close proximity to existing processing facilities.
Bird highlighted that the company has reviewed over 300 boreholes within the licence area and is confident about the orebody architecture. Engineering modelling has identified ore blocks suitable for open pit and shallow underground mining, which exceeds initial expectations for the project.
The project has generated significant interest from third parties, leading to various enquiries regarding potential involvement. The board is mindful that choosing a particular development route might limit other options, and is committed to selecting the most advantageous path for shareholders.
At 1025 BST, shares in Galileo Resources were down 13.76% at 0.91p.
