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Share Name Share Symbol Market Type Share ISIN Share Description
Galileo Resources Plc LSE:GLR London Ordinary Share GB00B115T142 ORD 0.1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 0.52p 0.51p 0.53p 0.52p 0.52p 0.52p 0 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 0.0 -1.0 -0.5 - 2.10

Galileo Resources PLC Half-year Report

20/12/2018 11:57am

UK Regulatory (RNS & others)


Galileo Resources (LSE:GLR)
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RNS Number : 1370L

Galileo Resources PLC

20 December 2018

20 December 2018

Galileo Resources PLC

("Galileo" or "the Company" or "the Group")

Interim results for the six months ended 30 September 2018

Galileo (AIM: GLR), the exploration and development mining company, announces its unaudited interim results for the six-month period ended 30 September 2018.

Highlights

Period under review

-- The Company commissioned an independent conceptual tonnage grade ("CGT") model of the Phase 1 drilling results - for Star Zinc-, which demonstrated at nominal 3% Zn cut-off- a potential deposit target of 485 000 tonnes grading 15.4% Zn grade (1)

-- This CGT model represents an 80% increase in deposit tonnage with a 14% decrease in grade when compared to previous CGT modelling ("conservative case") in 2015 based on historical exploration data 2

-- Based on positive recommendations, the Company undertook and completed a Phase 2 drilling programme, comprising 26 diamond drill holes that targeted open-ended areas east- north-east and southeast of the known mineralised zone 3.

   --     Loss per share 0.1 pence compared to 0.1 pence for the comparative period (2017) 

-- Operating expenses down 26.36% to GBP 255,677 compared to GBP 347,190 for the comparative period (2017)

Post period under review

-- The Company commissioned a second independent CGT block model estimate using independent chemical analyses from both Phase 1 and pXRF (portable X-ray fluorescence) spectrometry data from Phase 2 drilling.4

-- Phase 2 drilling increased significantly Star Zinc's non-JORC CGT: the second CGT modeling estimated an Exploration Target, at above 3% Zn cut off, of between 600,000 and 900,000 tonnes (t) with an estimated average grade of 10 to 12 % Zn and an estimated 90,000 to 110,000 t Zn metal 3

-- The Company conditionally acquired from BMR Group plc, ("BMR") the Kabwe Residual Rights, which includes the Kashitu Zinc prospect within Kabwe Mining Licence (6990-HQ-LML) ("Kabwe ML") but excludes BMR's small-scale licence 7081-HQ-SML ("Kabwe Tailings Recovery Project") situated within Kabwe ML

-- The aforementioned also includes the remaining 15% of the shares, that Galileo currently does not hold in Enviro Zambia Ltd,), the entity which indirectly owns 95% of the Star Zinc Project.

-- With respect to the Glenover Phosphate project, the Company's 36%-owned Glenover Phosphate (Pty) Ltd submitted to the DWS on 9 November 2018, a Water Usage Licence Application for the project to the Department of Water and Sanitation (DWS) for section 21 (various water uses) in terms of Section 40 of the National Water Act (1998)

(1.) As announced on 4 June 2018, the CGTs in this interim report are not reported in compliance with any AIM Standard, including JORC (Joint Ore Reserves Committee) 2012 /CIM NI (Canadian Institute of Mining, Metallurgy & Petroleum National Instrument) 43-101 or similar CRIRSCO (Committee for Mineral

(2) (BMR - AIM RNS announcement 16 August 2016)

   (3)    Galileo RNS announcement 14 November 2018 

(4) Independent chemical analyses for Phase 2 for were being validated at time of this interim report.

Operational overview

Star Zinc - Zambia

Period under review

The Company directly holds a 80.75% interest in the Star Zinc Project near Lusaka in Zambia. This interest will increase to 95% on the Company, by way of the Kashitu Agreement referred to herein, acquiring the remaining 15% of the shares, that Galileo currently does not hold in Enviro Zambia Ltd, the entity which owns 95% of the Star Zinc Project.

Operations

All independent laboratory chemical assays were received for Stars Zinc Project's Phase 1 drilling programme (programme completed 3 March 2018) which comprised, amongst other things, a total 1,199m diamond drill holes (DDHs) as to 353 m PQ size drill core and 846m HQ size drill core..

Using these results, independent mining industry consultants CSA Global (UK) Ltd completed a first conceptual grade tonnage (CGT) estimate in May 2018, which modeled a mineralised deposit for Star Zinc of 485 000 tonnes grading 15.4% Zn with a calculated 74, 800 tonnes zinc metal. This CGT is not reported in compliance with JORC (Joint Ore Reserves Committee) 2012 /CIM NI (Canadian Institute of Mining, Metallurgy & Petroleum National Instrument) 43-101 or similar CRIRSCO (Committee for Mineral Reserves International Reporting Standards) aligned reporting code. CSA's CGT report recommended, amongst other things, further drilling, both infill and extension, to increase the deposit size. The Company engaged GeoQuest to undertake a Phase 2 drilling programme, which commenced on 14 August 2018 and was completed 16 October 2018. The programme comprised 26 DDHs totaling 1 022m as to 321m PQ size drill core and 719 m HQ size drill core.

This Phase 2 drilling targeted areas that were open ended east-north-east and south-east of the known mineralised zone, which the previously announced (4 June 2018) modelled conceptual grade tonnage ("CGT") estimate highlighted as having the exploration potential to extend the mineralisation and deposit size. Initial drill core analysis was completed using portable x-ray fluorescence spectrometry ("pXRF") in order to provide semi-quantitative results that would guide the selection of mineralised samples for independent chemical analysis later.

During the period under review, UK based consultants Addison Mining Services Ltd ("AMS") commenced a second CGT (block model) estimate using independent chemical analyses from phase 1 and the pXRF data from the phase 2 drilling programmes.

Post period under review

AMS completed modeling the second CGT (block model) estimate: ASM's in-house CGT at various cut-off grades are presented in Table 1. This CGT (block model) is not reported in compliance with JORC2012/CIM NI 43-101 or similar CRIRSCO aligned reporting code. AMS issued its CGT estimate on 8 November 2018, details of which and recommendations made therein, can be found in the Company's RNS announcement of 14 November 2018

The highlights of this second CGT included:

-- Phase 2 drilling increased significantly Star Zinc's non-JORC CGT estimate over that published

on 4 June 2018. Wireframe models of the deposit suggest the mineralisation remains potentially open ended to east/south east.

   --     Exploration Target at above 3% Zn cut off is estimated as being between 600,000 and 

900,000 t with an estimated average grade of 10 to 12% Zn, containing an estimated 90,000 to 110,000 t Zn metal.

-- Analysis of the model suggests that any completion of a Maiden Resource Estimate (MRE) on Star Zinc will likely result in a larger tonnage and contained metal at lower grade than the previously announced non JORC 2012 CGT of 485, 000 tonnes at 15.4% Zn and 75, 000 tonnes of contained zinc metal.

-- The new Model applied bulk density measurements to specific Zn grade and not to a global value as previous CGT modeling had done, which has resulted in a more realistic grade- tonnage relationship.

-- Additional specific domains created by the Model identifies areas for potential to mine selectively high grade Willemite.

   Table 1                 Summary of ASM In-House Grade Tonnage Estimate 
 
Cutoff Grade (COG) 
        Zn%           VOLUME      TONNES    DENSITY    GRADE    Zn METAL 
                                                         Zn%    (tonnes) 
        30            4, 000     13, 000       3.63    33       4, 000 
                    --------  ----------  ---------  -------  ---------- 
        20           25, 000     90, 000       3.63    26      24, 000 
                    --------  ----------  ---------  -------  ---------- 
        15           45, 000    160, 000       3.25    23      35, 000 
                    --------  ----------  ---------  -------  ---------- 
        12           65, 000    220, 000       3.25    20      44, 000 
                    --------  ----------  ---------  -------  ---------- 
        10           85, 000    290, 000       3.25    18      51, 000 
                    --------  ----------  ---------  -------  ---------- 
        5           210, 000    670, 000       3.15    12      78, 000 
                    --------  ----------  ---------  -------  ---------- 
        3           270, 000    840, 000       2.83    10      85, 000 
                    --------  ----------  ---------  -------  ---------- 
        2           300, 000    930, 000       2.83     9      88, 000 
                    --------  ----------  ---------  -------  ---------- 
        1           320, 000    980, 000       2.81     9      88, 000 
                    --------  ----------  ---------  -------  ---------- 
        0           320, 000  1,000, 000       2.81     9      88, 000 
                    --------  ----------  ---------  -------  ---------- 
 

* Volume, tonnes and metal are rounded to 2 significant figures

Independent chemical analyses for phase 2 drill core samples were received in November 2018 and are being QA-QC validated at time of this interim report

Kashitu Project ("Kashitu")

Kashitu is located in the SE corner of BMR's 100% owned Kabwe ML site in Zambia. The area is considered prospective, due to elevated zinc-in-soil values, which could be amenable to zinc extraction via leaching technologies, similar to that proposed for Kabwe Tailings Recovery Project. Historical soil sampling by Billiton (now BHP) has recorded zinc values greater than 15, 000 ppm Zn (1.5% Zn) over a 1.2 km by 0.3 km NW verging area, which is in close proximity to historical workings. Reportedly high-grade surficial willemite was extracted from the historical workings and fed in to the main historical Kabwe Mine plant, during its operation.

An interpretation of existing RAB (rotary air blasting), RC (reverse circulation) and diamond drilling has refined the area of potential interest, and is likely associated with a ENE-trending structure containing steeply dipping, high-grade willemite veins.

Operations

Period under review

The Company executed a binding and exclusive conditional Heads of Agreement ("Kashitu Agreement") (5) , to acquire (the "Acquisition") from BMR Group plc, ("BMR") the Kabwe Residual Rights, which includes Kabwe Mining Licence (6990-HQ-LML) ("Kabwe ML") but excludes BMR's small-scale licence 7081-HQ-SML ("Kabwe Tailings Recovery Project") situated within Kabwe ML (the Acquisition).

The Acquisition also includes the remaining 15% of the shares, that Galileo currently does not hold in Enviro Zambia Ltd), the entity which indirectly owns 95% of the Star Zinc Project. The Kabwe Residual Rights include the Kashitu Zinc willemite exploration prospect ("Kashitu").

Post Period Under Review

The Company progressed meeting the conditions precedent for the Acquisition.

(5) Shareholders are referred to the Company's RNS of 13 September 2018 for details of the Kashitu Agreement

Glenover Phosphate Project ("Glenover Project" or "Project") - South Africa

The Company owns a 36% interest (this will increase to 38% on grant of a Mining Right) in the Glenover Project, by way of its interest in Glenover Phosphate (Pty) Ltd ("Glenover"), the ultimate owner of the Project. The Company is negotiating a long-term off-take definitive supply agreement (DSA) with a major fertiliser producer (MFP) subject to certain product specifications. The tailings material will contain high values of strategic rare earths, which have been shown to be capable of producing a refinable rare-earth product for international refiners.

Operations

Period under review

Test work by MFP, a condition precedent (CP) in terms of the proposal agreement, to confirm suitability of the Phosphate Rock for its phosphate/fertilizer process progressed with positive results to date acceptable to MFP in terms of product specification outlined specified in the original proposal agreement for the supply of phosphate rock dated 12 June 2017.

The negotiations continued positively with MFP for a Definitive Supply Agreement (DSA) for long-term (minimum 15 years) supply of Phosphate Rock from Glenover. The DSA specification for iron (Fe) content in the Phosphate Rock was lowered to <1% Fe from 5% Fe max. Further MFP test work showed this specification to be achievable but it introduced a small increase over minimum specification in level of another impurity element, which the Company believes can be addressed

A final Condition Precedent to test a bulk 30-tonne sample of phosphate rock in MFP's process is pending MFP's evaluation of the logistical options for transport of the Phosphate Rock from Glenover.

Glenover completed and submitted an Environmental Impact Assessment (EIA) and Environmental Management Programme (EMP) to the Department of Mineral Resources (DMR) in terms of its Mining Right Application (MRA) for the Project. The DMR accepted the EIA/EMP on 31 May 2018 and its adjudication is ongoing (see Post Period under Review).

Coincidently, with the EIA, the Company commenced with preparation of the Water Usage Licence application (WULA).

Post period under review

Part B of the first phase of the 2-phase pilot plant flotation study ("the Study") - namely flotation water and ore variability tests on Glenover ore- was completed. This testwork and Study is pursuant to the terms of the Heads of Agreement with a major fertilizer producer agreeing to undertake the Study in order ultimately to produce a bulk phosphate flotation concentrate for testing in its fertilizer processing plant.

On 5 October 2018, the DMR requested, in respect of Glenover's MRA, a Record of Decision (ROD) from the Department of Water and Sanitation (DWS) in terms of Section 49 (2) of the National Environmental Management: Waste Act, 2008 for waste related activities which overlaps with some of the Section 21(g) water uses for which a Water Use License application was submitted in terms Section 40 of the National Water Act, 1998.

Concordia Copper Project ("Concordia") - South Africa

Period under review

The Company made no contribution to further exploration on Concordia and retains a 15% interest in the project.

Ferber Property - USA

The renewal claims fees to August 2019 for Ferber were lodged with both the US Bureau of Land Management and Elko County, Nevada. Whilst no exploration was carried out on the property during the period under review, the Company continued to investigate the options for potential JV/farm-out partners or its sale.

For further information, please contact:

 
 Colin Bird, Chairman & CEO     Tel +44 (0)20 7581 4477 
 Andrew Sarosi, Executive       Tel +44 (0) 1752 221937 
  Director 
  www.galileoresources.com 
 Beaumont Cornish Limited       Tel +44 (0)20 7628 3396 
  Nominated Advisor 
  Roland Cornish/James Biddle 
 
  Novum Securities Limited       Tel +44 (0)20 7382 8416 
  - Broker 
  Colin Rowbury/ Jon Belliss 
 

Statement of Responsibility for the six months ended 30 September 2018

The directors are responsible for preparing the consolidated interim financial statements for the six months ended 30 September 2018 and they acknowledge, to the best of their knowledge and belief, that:

-- the consolidated interim financial statements for the six months ended 30 September 2018 have been prepared in accordance with IAS 34 - Interim Financial Reporting, as adopted by the EU;

-- based on the information and explanations given by management, the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the consolidated interim financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss;

-- the going concern basis has been adopted in preparing the consolidated interim financial statements and the directors of Galileo have no reason to believe that the Group will not be a going concern in the foreseeable future, based on forecasts and available cash resources;

   --     these consolidated interim financial statements support the viability of the Company; and 

-- having reviewed the Group's financial position at the balance sheet date and for the period ending on the anniversary of the date of approval of these financial statements they are satisfied that the Group has, or has access to, adequate resources to continue in operational existence for the foreseeable future.

   C Bird                                    Chairman and Chief Executive Officer 
   A Sarosi                                Finance & Corporate Development Director 
   J R Wollenberg                    Non-Executive director 
   C Molefe                              Non-Executive Director 

19 December 2018

 
 
 CONSOLIDATED STATEMENT OF FINANCIAL              Six months       Six months           Year 
  POSITION                                             ended            ended          ended 
                                                30 September     30 September       31 March 
                                                        2018             2017           2018 
 
 
                                                 (Unaudited)      (Unaudited)      (Audited) 
                                                         GBP              GBP            GBP 
 
 ASSETS 
 
 Intangible assets                                 1 484 265        1 900 267      1 380 085 
 Investment in joint ventures                      3 236 660        2 268 733      3 268 236 
 Loans to joint ventures and 
  associates                                         416 663          656 779        284 396 
 Other financial assets                              412 245          497 678        458 131 
                                            ----------------  ---------------  ------------- 
 Non-current assets                                5 549 833        5 323 457      5 390 848 
                                            ----------------  ---------------  ------------- 
 
 Trade and other receivables                          42 553           45 575         41 218 
 Cash and cash equivalents                           394 276        1 126 124        539 301 
                                            ----------------  ---------------  ------------- 
 Current assets                                      436 829        1 171 699        580 519 
                                            ----------------  ---------------  ------------- 
 
 Total Assets                                      5 986 662        6 495 156      5 971 367 
                                            ----------------  ---------------  ------------- 
 
 EQUITY AND LIABILITIES 
 
 Share capital and share premium                  25 440 319       24 945 319     24 945 319 
 Reserves                                            478 203          544 438        729 772 
 Accumulated loss                               (20 428 585)     (19 348 672)   (20 163 817) 
                                            ----------------  ---------------  ------------- 
 Equity                                            5 489 937        6 141 085      5 511 274 
                                            ----------------  ---------------  ------------- 
 
 Liabilities 
 Other financial liabilities                           3 848            3 743          3 579 
 Non-current liabilities                               3 848            3 743          3 579 
                                            ----------------  ---------------  ------------- 
 
 
 Trade and other payables                            492 877          350 328        456 514 
                                            ----------------  ---------------  ------------- 
 Current liabilities                                 496 725          350 328        460 093 
                                            ----------------  ---------------  ------------- 
 
 Total Equity and liabilities                      5 986 662        6 495 156      5 971 367 
                                            ----------------  ---------------  ------------- 
 
 
 The statement of financial position has been approved by the board 
  of directors and are signed off on their 
  behalf by: 
 
 Andrew Sarosi 
  19 December 2018 
  Company number: 05679987 
 
  CONSOLIDATED STATEMENT OF COMPREHENSIVE         Six months       Six months           Year 
  INCOME FOR THE SIX MONTHSED                      ended            ended          ended 
  30 SEPTEMBER 2018                             30 September     30 September       31 March 
                                                        2018             2017           2018 
                                                 (Unaudited)      (Unaudited)      (Audited) 
                                                         GBP              GBP            GBP 
 Revenue                                                   -                -              - 
 Operating expenses                                (255 677)        (347 190)      (624 631) 
                                            ----------------  ---------------  ------------- 
 Operating loss                                    (255 677)        (347 190)      (624 631) 
 Investment revenue                                       81               34            180 
 Impairment losses recognised                              -                -      (525 870) 
 Share of (loss)/profit from 
  equity accounted investments                       (9 172)          135 410        123 430 
 Loss for the period                               (264 768)        (211 746)    (1 026 891) 
 Other comprehensive loss: 
 Exchange differences on translating 
  foreign operations                               (251 569)        (345 622)      (160 288) 
                                            ----------------  ---------------  ------------- 
 Total comprehensive loss                          (516 337)        (557 368)    (1 187 179) 
                                            ----------------  ---------------  ------------- 
 
 Total comprehensive loss attributable 
  to: 
 Owners of the parent                              (516 337)        (557 368)    (1 187 179) 
 
 
 Weighted average number of shares 
  in issue                                       278 021 220      198 107 665    227 388 473 
 
 Basic loss per share - pence                          (0.1)            (0.1)         (0.45) 
 
 
 

STATEMENT OF CHANGES IN EQUITY as at 30 September 2018

 
                           Share  Total share      Foreign  Convertible    Share       Total  Accumulated        Total 
                         capital                                           based    reserves                    equity 
                           Share 
                         premium 
                                      capital     currency  instruments  payment                     loss 
Figures in Pound Sterling                      translation               reserve 
                                                   reserve 
 
 
                                                   reserve 
--------------------------------  -----------  -----------  -----------  -------  ----------  -----------  ----------- 
 
 
Balance at 1                                       18 076                                                                                                                                       (19 136 
 April 2017                        5 806 508          986                         23 883 494                   (307 554)                    1 047 821  149 793                       890 060       926)    5 636 628 
                ----------------------------  -----------  ---------------------------------  --------------------------  ---------------------------  -------  ----------------------------  ---------  ----------- 
Loss for the 6                                                                                                                                                                                   (1 026       (1 026 
 months                                    -            -                                  -                           -                            -        -                             -       891)         891) 
Other 
 comprehensive 
 income                                    -            -                                  -                   (160 288)                            -        -                     (160 288)          -    (345 622) 
                ----------------------------  -----------  ---------------------------------  --------------------------  ---------------------------  -------  ----------------------------  ---------  ----------- 
Total 
 comprehensive 
 Loss for the                                                                                                                                                                                    (1 026 
 6 months                                  -            -                                  -                   (160 288)                            -        -                     (160 288)       891)    (557 368) 
                ----------------------------  -----------  ---------------------------------  --------------------------  ---------------------------  -------  ----------------------------  ---------  ----------- 
Issue of 
 shares                               58 723    1 003 102                          1 061 825                           -                            -        -                             -          -    1 061 825 
Total 
 contributions 
 by and 
 distributions 
 to owners of 
 company 
 recognised 
 directly in 
 equity                               58 723    1 003 102                          1 061 825                           -                            -        -                             -          -    1 061 825 
                ----------------------------  -----------  ---------------------------------  --------------------------  ---------------------------  -------  ----------------------------  ---------  ----------- 
Balance at 1                                       19 080                                                                                                                                       (20 163 
 April 2018                        5 865 231          088                         24 945 319                   (467 842)                    1 047 821  149 793                       729 772       817)    6 141 085 
                ----------------------------  -----------  ---------------------------------  --------------------------  ---------------------------  -------  ----------------------------  ---------  ----------- 
Profit for the 
 6 months                                  -            -                                  -                           -                            -        -                             -  (264 768)    (264 768) 
Other 
 comprehensive 
 income                                    -            -                                  -                   (251 569)                            -        -                     (251 569)          -    (251 569) 
                ----------------------------  -----------  ---------------------------------  --------------------------  ---------------------------  -------  ----------------------------  ---------  ----------- 
Total 
 comprehensive 
 income for 
 the 6 months                              -            -                                  -                   (251 569)                            -        -                     (251 569)  (264 768)    (516 337) 
                ----------------------------  -----------  ---------------------------------  --------------------------  ---------------------------  -------  ----------------------------  ---------  ----------- 
Issue of 
 shares                               50 000      445 000                            495 000                           -                            -        -                             -          -      495 000 
Total 
 contributions 
 by and 
 distributions 
 to owners of 
 company 
 recognised 
 directly in                                                                                                                                                                               - 
 equity                               50 000      445 000                            495 000                           -                            -        -                          - --          -      495 000 
Balance at 30 
 September                                         19 525                                                                                                                                       (20 428 
 2018                              5 915 231          088                     25 440 319                       (719 411)                    1 047 821  149 793                       478 203       585)    5 489 937 
                ----------------------------  -----------  ---------------------------------  --------------------------  ---------------------------  -------  ----------------------------  ---------  ----------- 
 
 
 
 
 CONSOLIDATED STATEMENT OF                            Six months      Six months          Year 
  CASH FLOW FOR THE SIX MONTHS                             ended           ended         endedED 30 SEPTEMBER 2018                           30 September    30 September      31 March 
                                                            2018            2017          2018 
                                                     (Unaudited)     (Unaudited)     (Audited) 
                                                             GBP             GBP           GBP 
 
 Cash used in operations                               (329 016)       (366 269)     (598 676) 
 Interest income                                              81              34           180 
 Net cash from operating activities                    (328 935)       (366 235)     (598 496) 
                                       -------------------------  --------------  ------------ 
 
 Increase in intangible assets                                 -        (70 357)      (67 275) 
 Increase in investments in 
  joint ventures                                       (224 709)       (456 962)     (797 338) 
 Loans advanced                                        (132 267)       (152 970)     (170 236) 
 Sale of other financial assets                           45 886               -             - 
 Net cash from investing activities                    (311 090)       (680 289)   (1 034 849) 
                                       -------------------------  --------------  ------------ 
 
 Proceeds on share issue                                 495 000       1 061 825     1 061 825 
                                       -------------------------  --------------  ------------ 
 Net cash flows from financing 
  activities                                             495 000       1 061 825     1 061 825 
 Total cash movement for the 
  period                                               (145 025)          15 301     (571 520) 
 Cash at the beginning of the 
  period                                                 539 301       1 110 823     1 110 821 
                                       -------------------------  --------------  ------------ 
 Total cash at end of the period                         394 276       1 126 124       539 301 
                                       -------------------------  --------------  ------------ 
 
 

Notes to the Financial Statements

1. Status of interim report

The Group unaudited condensed interim results for the 6 months ended 30 September 2018 have been prepared using the accounting policies applied by the Company in its 31 March 2018

annual report, which are in accordance with International Financial Reporting Standards (IFRS and IFRC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU("IFRS"), including the SAICA financial reporting guides as issued by the Accounting Practices Committee, IAS 34 - Interim Financial Reporting, , the AIM rules of the London Stock Exchange and the Companies Act 2006 (UK). This condensed consolidated interim financial report does not include all notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 March 2018 and any public announcements by Galileo Resources Plc. All monetary information is presented in the presentation currency of the Company being Great British Pound. The Group's principal accounting policies and assumptions have been applied consistently over the current and prior comparative financial period. The financial information for the year ended 31 March 2018 contained in this interim report does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

2. Basis of preparation

The consolidated annual financial statements incorporate the annual financial statements of the Company and all entities, including special purpose entities, which are controlled by the Company. Control exists when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries are included in the consolidated annual financial statements from the effective date of acquisition to the effective date of disposal. Adjustments are made when necessary to the annual financial statements of subsidiaries to bring their accounting policies in line with those of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the Group's interest therein, and are recognised within equity. Losses of subsidiaries attributable to non-controlling interests are allocated to the non-controlling interest even if this results in a debit balance being recognised for non- controlling interest. Transactions which result in changes in ownership levels, where the Group has control of the subsidiary both before and after the transaction, are regarded as equity transactions and are recognised directly in the statement of changes in equity. The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the parent.

3. Segmental analysis

Business segments

The Group's business is the exploration and development of copper and phosphate in South Africa and gold-copper in USA.

An analysis of the loss on ordinary activities before taxation is given below:

 
 
 
 
                                                  Six months     Six months         Year 
                                                    ended 30       ended 30 
                                                   September      September        ended 
                                                        2018           2017     31 March 
                                                 (Unaudited)    (Unaudited)         2018 
                                                                               (Audited) 
                                                         GBP            GBP          GBP 
Loss on ordinary activities before 
 taxation: 
Rare earths, aggregates and iron 
 ore and manganese                                  (51 248)      (238 083)    (857 969) 
Gold, Copper                                               -         33 209      123 430 
Corporate costs                                    (213 520)        (6 872)    (292 352) 
                                                                                  (1 026 
                                                   (264 768)      (211 746)         891) 
                                               -------------  -------------  ----------- 
 

4. Financial review

The Group reported a net loss of GBP264 768 (2017: GBP 211 746) before and after taxation. Basic loss reported is 0.1 pence (2017: 0.1 pence) per share. Loss per share was based on a weighted average number of ordinary shares of 278 021 220 (2017: 198 107 665).

5. Investments in joint ventures

5.1 Glenover

The Company owns a 36% interest (this will increase to 38% on grant of a Mining Right) in the Glenover Project, by way of its interest in Glenover Phosphate (Pty) Ltd ("Glenover"), the ultimate owner of the Project. The Company is negotiating a long-term off-take definitive supply agreement with a major fertiliser producer subject to certain product specifications. The tailings material will contain high values of strategic rare earths, which have been shown to be capable of producing a refinable rare-earth product for international refiners.

Galileo's interest in the losses of the Glenover joint venture for the period under review amounted to GBP 9 172 (2017: profit of GBP 135 410).

5.2 Star Zinc

The Company acquired a 51% earn-in interest - through a joint venture with BMR in the Zambian Star Zinc project ("Star Zinc"), which contains a historically declared non-JORC hard rock resource of 275 166 tonnes grading 20.2% Zinc ("Zn") at a cut-off grade of 14% Zn. During March 2018 the Company increased its earn-in interest in Star Zinc to 85%, having completed a 26-diamond drill hole programme of 1 200 metres.

6. Availability of the Interim Results

Copies of the Interim Results for the six months ended 30 September 2018 will be posted on the Company's website and will be available to shareholders and members of the public in hard copy and free of charge, from the Company's London office at 1st Floor 7/8 Kendrick Mews

London SW7 3HG, United Kingdom. Alternatively a downloadable version is available from Company's website: www.galileoresources.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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