Galileo Resources : Star Zinc Issues JORC 2012 Technical Report

Regulatory Story

Galileo Resources PLC - GLR

Star Zinc Issues JORC 2012 Technical

Report

Released 14:45 21-Aug-2019

RNS Number : 8199J

Galileo Resources PLC

21 August 2019

For immediate release

21 August 2019

Galileo Resources Plc

("Galileo" or "the Company")

Star Zinc Issues JORC 2012 Technical Report and Inferred Resource Estimate

Further to Galileo's previous announcement 26 June 2019 on its completion of an initial inferred resource estimate for the Star Zinc Project (the "SZ Project") located near Lusaka, Zambia, it is pleased to announce the issue of the final Technical Report and Inferred Mineral Resource Estimation ("MRE ") prepared by Addison Mining Services ("AMS") in accordance with JORC 2012. This MRE report supports the previously reported initial findings of approximately 500,000 tonnes at 16% Zinc for 77,000 tonnes of contained metal above a cut-offgrade of 2% Zinc. This includes approximately 340,000 tonnes at 21% Zinc for 72,000 tonnes of metal above a cut-offgrade of 8%. The Company has a 95% beneficial interest in the Project and the Zambian government a 5% interest.

To view the MRE report with the illustrative diagrams and JORC code 2012 Table 1 please use the following link: https://www.galileoresources.com/

Highlights

• Galileo completes the MRE in accordance with JORC 2012 for its Star Zinc project (Licence tenure 19653-HQ-LEL).
• The MRE, using a preliminary open-pit optimisation method confirms a high grade hypogene Inferred zinc (Zn) resource with reasonable prospects of economic extraction of approximately 500,000 (net attributable 475,000) tonnes at 16% Zn for 77,000 (net attributable 73,150) tonnes of contained metal above a cut-offgrade of 2% Zn.
  This includes approximately 340,000 tonnes at 21% Zn for 72,000 tonnes of metal above a cut-off grade of 8% Zn. (
• The MRE containing a gross estimate of 77,000 tonnes of zinc metal, is suitable for potential direct shipping material for ROM to the zinc process/refinery (Sable) facility at Kabwe, located approximately 120km north of the Project.
• The MRE model defines a clear boundary between a high-grade (>8% Zn) domain and a low-grade (<8% Zn) zone.
• All of the high-grade resource, +8% Zn blocks, fall within the preliminary pit shell generated for the purpose of outlining resources with reasonable prospects of economic extraction.
• Mineralised hypogene material outside of the preliminary pit shell remains an Exploration Target(a) estimated as being between approximately 85,000 and 180,000 tonnes with an estimated average grade of 3 to 5 % Zn.

• Similarly, a portion of the mineralised near surface secondary supergene material remains an Exploration Target(a) estimated as being between approximately 13,000 and 77,000 tonnes with an estimated average grade of 3 to 5 %
  Zn.
• The MRE will enable the Company to apply for a mining permit, and among other things undertake related economic and engineering studies for a shallow open-pit mining operation as a prerequisite to the application
  , finalise an off-take agreement for direct shipping ore and transfer the SZ licence to its subsidiary Enviro Processing Zambia Ltd from BMR Group plc's Zambian subsidiary Enviro Processing Ltd..

Colin Bird, Chief Executive Officer, said: "This Technical Report and JORC-compliant resource estimate confirms the company's publicly announced* presence of a high grade zinc component in the deposit suitable for direct shipping to Jubilee Metal Group plc's zinc process/ Sable refinery plant at Kabwe . The MRE clearly identifies an easy access near-surface mineable zone with a low stripping ratio of one to one. There will be no requirement for processing equipment other than possibly a mobile primary crusher. A low grade portion of the mineralised material remains an exploration target and may be amenable to preconcentrate/upgrade to about 10% Zn either as DSO or blending, pending further test work and method development.

The MRE will allow for a 6-yearlife-of-mine small scale operation to produce rock mass of only 5,500t/month containing 12,000 t zinc metal per year to Kabwe. While in-house attributable revenues are projected at about USD15 million annually at current price, the annual all in cost is projected not to exceed to USD2 million.

We intend to apply for a mining permit and to target mining to start as near as coincident with the start up of the Kabwe tailings project."

*Galileo RNS 14 November 2018

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

JORC (2012) Inferred Mineral Resource Estimate

Independent consulting group Addison Mining Services Ltd ("AMS) completed the mineral resource estimate. The Inferred estimate utilized data for all drill holes completed by Galileo with the final drillhole being completed on the 9th of December 2018. The final drillhole database used for estimation included 52 drill holes for 2220 m of drilling of which 1412 m were assayed over 1433 samples. All drill core was logged for geology, core recovery and rock quality designation.

The Company commissioned AMS to undertake the mineral resource estimate in May 2019.

Block Model

AMS has estimated an Inferred Resource of approximately 500,000 tonnes at 16% Zinc for 77,000 tonnes of contained metal above a cut-off grade of 2% Zinc. This includes approximately 340,000 tonnes at 21% Zinc for 72,000 tonnes of metal above a cut-off grade of 8%.

The estimated grade tonnage curves and tabulations for the in-pit material are shown in Table 1 and Figure 1 and Table 2 below. Material below a 2% Zn cut-off grade is not considered to have a reasonable prospect of economic extraction and is not considered part of the Resource.

The Inferred Resource block model ranges from surface to approximately 40 m below surface over a length of approximately 300 m from east to west and 20 to 100 m from north to south. Thickness is typically between 5 and 25 m.

1. Mineral resources are reported using a 2% Zn cut-off. Figures may not sum due to rounding. The contained metal is determined by the estimated tonnage and grade.
2. Source: Mr J.N. Hogg, MSc. MAIG Principal Geologist for AMS, an independent Competent Person within the meaning of the JORC (2012) code and qualified person under the AIM guidance note for mining and oil & gas companies.

Figure 1: Star Zinc, estimated grade tonnage curves for material inside conceptual pit shell.

Table 2: Gross grade tonnage tables for material inside conceptual pit shell. Material below a cut-off grade of 2% is not considered to have a reasonable prospect of economic extraction and is not considered part of the Resource.

1. All material is classified as Inferred Category. Numbers are rounded to reflect that fact that an estimate has been made, and as such totals may vary.
2. Zn grades are in situ grades, no estimation of reserves have been made, resources which are not reserves do not have demonstrated economic viability.

Parts of the hypogene Zn mineralised block model currently outside the preliminary pit shell remain as an exploration target, with potential for conversion to a resource with the application of ore sorting and upgrade methods pending detailed test work and consideration of cost versus yield.

In addition, small quantities of supergene Zn mineralised pisolitic cover and karst cavity infill material remain as an exploration target, pending further investigation into suitable recovery methods.

These quantities of currently 'sub-economic' mineralisation offer potential for further development, and a small incremental addition to resources.

Silver credits for Star Zinc have not been estimated nor reported as part of this study. Potential exists to add Ag resources and potential Ag credits to the Star Zinc resource block model.

1. Potential grade of the Exploration Target presented in Table 3 and Table 4. Error! Reference source not found. is conceptual in nature: there is insufficient processing and ore sorting data to report as a Mineral Resource at this time. It is uncertain if further technical studies and exploration will result in the estimation of a Mineral Resource.

Table 3: Summary of Hypogene Exploration Target estimated at above 2% Zn

Summary of resource estimate and reporting criteria

In accordance AIM Guidance Note 16 and the JORC (2012) reporting guidelines, a summary of the material information used to estimate the Mineral Resource is set out below (for further detail please refer to the Appendix to this announcement).

Geology and geological interpretation

The Star Zinc deposit is hosted within metasedimentary rocks of the late Proterozoic Zambezi Supracrustal sequence (the Cheta and Lusaka Formations), consisting of upper greenschist facies limestones and dolostones marbles with quartz-muscovite schists and feldspathic quartzites. The succession in the Star Zinc pit consists of recrystallized limestone overlain by metamorphosed slatey limestone and then by coarse marbles overlain by hematite rich dolomite.

A broad dome is the main structural feature, with two main fracture trends present, one broadly N-S (typically dipping approximately 70° to the east) and one broadly E-W (typically dipping approximately 70° to the south), both irregularly mineralised.

Alteration and Mineralisation

Visual examination of carbonate host rocks in drill core suggests there is likely to have been a number of carbonate alteration events. However, hypogene zinc (with hematite and calcite) mineralisation appears to be linked with pervasive ferroan carbonate and dolomitic alteration events which largely overprint the carbonate country rocks. This generally becomes less intensive as the grade and thickness of the zinc mineralisation decreases. Argillites are

also highly dolomitized in places. A late stage calcite flooding event observed as un-mineralised calcite veins and fractures (typically NW-SE trending with a 155° orientation, dipping 65° to the southwest) cross-cut all units.

Mineralisation at Star Zinc occurs in a variety of settings. A mineralized regolith (red soils, terra rossa) often overlies and forms infill on top of a highly irregular karstically weathered rock head morphology. The regolith is mainly comprised of a highly ferruginous pisolitic laterite soil which varies in depth from 0 to 12 m, with an average depth of approximately 5 m. Zinc values measured from soils in the vicinity of the pit can reach up to 1.56% Zn. The zinc mineralisation in this zone is predominantly comprised of hemimorphite, smithsonite and sauconite.

Erosion due to rain and ground water has also created fissures and underground cavities / voids at depth (usually in the top 20 m from surface). They range from 0.1 m to 5.0 m in drilled width and are often filled with clayey soil, lithic fragments, pisolitic laterite. The infill can often be highly mineralised with grades up to 45% Zn.

Hypogene willemite mineralisation is observed in many styles, broadly irregular, in parts tabular, including massive and semi-massive replacement zones, anastomosing, dilatational at the intersection of possible structures, in calcite- hematite-willemite veins and fractures and more brecciated zones.

Weathering

A regolith model was generated to separate supergene mineralisation types from hypogene mineralization. A base of weathering surface was also modelled, although no significant mineralization was intercepted in drilling within the weathered zone below the regolith.

Bulk density

Measurements were only completed on phase 1 diamond core which represents holes SZDD001 to SZDD026. Such measurements were carried out on 19 of the 26 holes spatially spread across the deposit, both to the west and east of the pit. Samples were collected for both mineralised and un-mineralised samples across a range of zinc grades determined by pXRF measurements and across all observed lithologies. A total of 261 samples were selected, typically ranging from 3 to 10 cm in length.

A strong positive correlation exists between bulk density and Zn laboratory assay grade. The linear regression line of Bulk Density vs Zn grade was used to calculate a bulk density value for each cell within the block model as follows:

· Estimated Bulk Density = 2.75 + 0.03xZn%

Drilling techniques and hole spacing

Galileo has completed two phases of orientated diamond drilling at the Star Zinc deposit. During the period between December 2017 to and March 2018, a total of 26 holes were completed for 1198.80 metres. A second phase of diamond drilling was completed from August to October 2018 in which a further 26 holes were completed for 1022 metres.

A total of 52 diamond drill holes totalling 2,220.80 metres were used as the input database for geological modelling and resource estimation.

Drill core diameter was PQ and HQ.

Non-vertical holes were orientated on HQ core only typically at end of each 3 metre run using a Reflect ACT II RD rapid decent core orientation tool.

Drill sample data spacing across the current resource area ranges from approximately 20-25m centres within the most densely tested area towards the west, stepping out to approximately 30m centres to the east.

The distribution of drillholes, supported by surface and underground mapping, is sufficient to establish the degree of geological and grade continuity appropriate for a JORC (2012) Inferred classification of resources.

Sampling and sub-sampling techniques

Sampling was typically completed on a 1 metre basis, though sampling widths did vary based on the above considerations from approximately 0.5 to 1.5 metres. Approximately 3 to 5 metres either side of the zone of interest were sampled and submitted for assay as well as internal waste up to lengths of 5 metres. Once the sampling intervals had been determined, the section of core was sawn yielding a quarter length piece of core for analytical purposes and the remaining three-quarter piece retained for reference purposes.

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