UK-based Galileo Resources has entered an agreement with Siege Mining to cease the ownership of its Star Zinc Project. The mine deposit is estimated at 250,000 to 350,000mt at a zinc percentage of 20pc.
Galileo struck the deal with the local Zambian mining company for $750,000. Galileo will earn a royalty based on zinc sales from the Star Zinc Project in the future. Around $200,000 is being paid by Siege Mining for large-scale exploration license and the remaining amount of $750,000 is for total control and exploration data.
The rationale for the sale is that a local mining company will be able to better adapt to community and regulations issues in the project located near Lusaka, said the company release. Siege will immediately start mining and is estimated to produce between 6,000 to 15,000mt of saleable ore in a month, however, ore output may be lower initially.
Star Zinc Project sits on a high-grade deposit that is situated in the expanding outskirts of Lusaka in Zambia. Emerging urbanization on the outskirts makes it more favourable for a small-scale mining firm to take charge and involve local artisan mining.