By: Creamer media

According to the parties, this structure allows dedicated teams to focus on the key workstreams needed to advance the mine, including day-to-day operational management, the design and construction of an on-site processing plant and an expanded drilling and exploration programme at Molefe and surrounding areas that Jubilee has already secured.

Under the terms of the agreement, Galileo can earn its 23.75% shareholding in the Molefe mine’s holding company by completing the agreed exploration and resource definition programme within eight months. Jubilee will retain a 71.25% interest once Galileo completes the earn-in, while a local Zambian firm holds the remaining 5%.

Jubilee’s existing investment in the mine will be classified as an interest-bearing capital loan and a non-interest-bearing shareholder loan, with the capital loan to receive preferential earnings until it has been fully repaid.

Jubilee said Molefe is already operating and supplying high-grade ore for processing at its Sable refinery. The operation is currently increasing production to 4 500 t a month of run-of-mine ore with grades above 2% copper, while about 2.2-million tonnes of lower-grade ore at around 0.7% copper has been stockpiled on site since the end of October.

The planned on-site processing facility will be designed to treat both new ore and the stockpiled material. The exploration and drilling programme will focus on expanding the resource base for mine planning, with the intention of confirming the early potential identified by Jubilee.

The agreement includes the establishment of executive committees to oversee the project. Jubilee will nominate two members, including the chairperson, to the joint executive committee, with Galileo nominating one.

Once Galileo has completed the earn-in and the relevant shares are issued, Jubilee will nominate two directors to the board of the Molefe mine’s holding company and Galileo will nominate one.

Jubilee said the partnership may also extend to additional contiguous exploration areas it has secured around Molefe, subject to further agreements. The company considers these properties to be highly prospective and could allow the companies to replicate the development model used at the Molefe mine.

“We are delighted to have found a partner with such an established record in Zambia for the co-development of Molefe. The combined skill set of the two teams is seldom available to a single mining project of this size.

“The joint agreement enables Jubilee to dedicate its focus on the day-to-day operations and the development of the processing solution for the Molefe mine. Outsourcing the mine planning and resource measurement to Galileo, which has an exceptional team with decades of experience and a wealth of in-country and African knowledge, was a natural and pragmatic option.

“The Jubilee operational team is looking forward to working with the Galileo operational team to accelerate the development of the Molefe mine project.

The joint shareholding in Molefe mine ensures a common purpose to develop this opportunity and offer shareholder returns – potentially one of the most significant, major copper deposits in the Central province of Zambia,” Jubilee CEO Leon Coetzer said.