19:38 Fri 23 Aug 2019
Galileo Resources - Audited Results
("Galileo" or the "Company" or the "Group")
Audited Results for the year ended
Notice of AGM
Galileo (AIM: GLR), the exploration and development mining company, announces its audited results for the year ended
Highlights for the period under review
· Independent conceptual tonnage grade models ("CGT Model") for Star Zinc deposit developed from the 2-phase drilling programme
· CGT Model defines specific high grade willemite (>20% Zinc (Zn)) domain areas within the deposit, which potentially could be selectively mined as direct ore feed to process
· The Project's large-scale exploration license 19653-HQ-LEL was renewed on
further three years Kashitu Zinc Prospect ("Kashitu")
· Kabwe Residual Rights, which includes the Kashitu Prospect, conditionally acquired from
· Potential for Kashitu to be larger than Star Zinc Glenover completed the Environmental Impact Assessment (EIA)/EMP Management Programme ("EMP") in respect of it Mining Right Application ("MRA").
· The Group reported a net loss of
Highlights post the period under review
· Completed,
· The IRE reports Inferred zinc resources with reasonable prospects of future economic extraction of approximately 500 000 tonnes at 16% Zn or 77 000 tonnes of contained metal above a cut-off grade of 2% Zn, including approximately 340 000 tonnes at 21% Zn for 72 000 tonnes of metal above a cut-off grade of 8% Zn
· Negotiations commenced with Jubilee Metals Group plc for an off-take agreement to supply future ore from Star Zinc
· Raised
· Acquired unconditionally from BMR, the remaining 15% of the shares that the Company did not hold in
· Kabwe Residual Rights, which includes the Kashitu Prospect, acquired unconditionally from BMR
· On
· South African major fertilizer producer ("MFP") completed the first phase of a 2-phase pilot plant flotation study to produce a bulk phosphate flotation concentrate for testing in MFP's fertilizer processing plant
A copy of this announcement is available on the Company's website www.galileoresources.com. and the annual report is being posted to shareholders on
This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.
You can also follow Galileo on Twitter: @GalileoResource.
For further information, please contact: |
Tel +44 (0) 20 7581 4477 |
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Tel +44 (0) 1752 221937 |
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Tel +44 (0) 20 7628 3396 |
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Tel +44 (0) 20 7399 9400 |
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Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of Galileo will be held at
Letter by the Chairman
Dear Shareholder
The year under review has been positive for the Company, with the main focus being the
Following Jubilee Metals Group Plc's ("Jubilee") acquisition of the
We have worked on a number of operational scenarios, and we have selected the base case scenario to be a 6-year mine life at approximately 60 000 tonnes per annum of high grade ore being mined by an open cast mining contractor and transported by road to the Kabwe facility.
During the period under review, we have not utilised our resources on the
exploration in
The Group reported a loss per share of
I would like to thank my fellow directors and employees for their efforts and contribution during a difficult, but positive period. We assure shareholders that we will apply best efforts to enhance shareholder value to our portfolio of projects and look forward to the challenge.
Chairman
Operational review
ZAMBIA
Star Zinc Project ("Star Zinc")
The Star Zinc deposit is located approximately 20km NNW of the Zambian capital
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
· 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
· 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
Post Period Under Review
· In
· The final drillhole database used for estimation included 52 drill holes for 2 220m of drilling of which 1 412m were assayed over 1 433 samples. All drill core was logged for geology, core recovery and rock quality designation. 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 40m below surface over a length of approximately 300m from east to west and 20m to 100m from north to south. Thickness is typically between 5m and 25m
Kashitu Prospect ("Kashitu")
Kashitu is located in the SE corner of BMR's 100% owned Kabwe ML site in
Operations Period Under Review
The Company executed a binding and exclusive Heads of Terms ("Kashitu Agreement")a, to acquire, conditionally, from
Post Period Under Review
Pursuant to the Kashitu Agreement, the Company, on
The Project deposit is a complex circular carbonatite/pyroxenite plug intruded into sedimentary shale and arenite rocks of the
Period Under Review
Glenover completed and submitted the EIA/EMP, which the DMR accepted on
On the basis of the results, the MFP provisionally offered and Glenover accepted an offtake agreement ("Provisional Offtake Agreement") for future Glenover Phosphate Rock. A definitive offtake agreement is still subject to satisfactory outcome of second phase of the Study. In the meantime, the MFP continued to review the results in relation to the logistics and options for transport of the phosphate rock to their processing facility, before committing to second phase of the Study. On
Period Under Review
The Company retains a 15% holding in the Project. The majority owner and operator of the Project namely SHIP Copper Pty Ltd carried out no exploration on the Project.
Ferber Property
The Ferber property is a historic producer of gold and copper. It hosts widespread gold and copper mineralisation. The Ferber intrusion-centered gold system is broadly similar to productive gold deposits elsewhere in north-central
Period under Review
The Company carried out no exploration on the property and continued to seek JV/farm-out partners for the project.
CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 March 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS 31 March 2019
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Figures in Pound Sterling |
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2019 |
2018 |
Assets |
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Non-current assets |
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Intangible assets |
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2,855,856 |
1,380,085 |
Investment in joint ventures |
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2,156,507 |
3,268,236 |
Loans to joint ventures and subsidiaries |
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444,004 |
284,396 |
Other financial assets |
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402,751 |
458,131 |
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5,859,118 |
5,390,848 |
Current assets |
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Trade and other receivables |
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42,920 |
41,218 |
Cash and cash equivalents |
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1,075 |
539,301 |
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43,995 |
580,519 |
Total assets |
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5,903,113 |
5,971,367 |
Equity and liabilities |
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Equity |
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Share capital |
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25,440,319 |
24,945,319 |
Reserves |
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461,554 |
729,772 |
Accumulated loss |
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(20,580,601) |
(20,163,817) |
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5,321,272 |
5,511,274 |
Liabilities |
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Non-current liabilities |
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Other financial liabilities |
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3,846 |
3,579 |
Current liabilities |
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Trade and other payables |
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577,995 |
456,514 |
Total liabilities |
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581,841 |
460,093 |
Total equity and liabilities |
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5,903,113 |
5,971,367 |
These financial statements were approved by the directors and authorised for issue on 23 August 2019 and are signed on their behalf by:
Colin Bird Andrew Sarosi
Company number: 05679987
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 March 2019
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Figures in Pound Sterling |
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2019 |
2018 |
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Revenue |
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- |
- |
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Operating expenses |
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(404,303) |
(624,631) |
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Operating loss |
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(404,303) |
(624,631) |
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Investment revenue |
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3,993 |
180 |
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Impairment losses recognised |
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- |
(525,870) |
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Profit/(loss) from equity accounted investments |
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(16.474) |
123,430 |
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Loss for the year |
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(416,784) |
(1,026,891) |
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Other comprehensive income: |
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Foreign exchange movements for the year |
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(268,218) |
(160,288) |
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Total comprehensive loss for the year |
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(685,002) |
(1,187,179) |
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Loss per share in pence (basic) |
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(0.14) |
(0.45) |
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All operating expenses and operating losses relate to continuing activities.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 March 2019
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Foreign currency |
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Share based |
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Share |
Share |
Total share |
Transaction |
Merger |
payment |
Total |
Accumulated |
Total |
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Figures in Pound Sterling |
capital |
premium |
capital |
reserve |
reserve |
reserve |
reserves |
loss |
equity |
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Balance at 1 April 2017 |
5,806,508 |
18,076,986 |
23,883,494 |
(307,554) |
1,047,821 |
149,793 |
890,060 |
(19,136,926) |
5,636,628 |
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Loss for the year |
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(1,026,891) |
(1,026,891) |
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Other comprehensive income |
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(160,288) |
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(160,288) |
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(160,288) |
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Total comprehensive loss for the year |
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(160,288) |
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(160,288) |
(1,026,891) |
(1,187,179) |
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Issue of shares |
58,723 |
1,003,102 |
1,061,825 |
- |
- |
- |
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1,061,825 |
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Total contributions by and distributions to owners of company recognised directly in equity |
58,723 |
1,003,102 |
1,061,825 |
- |
- |
- |
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1,061,825 |
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Balance at 31 March 2018 |
5,865,231 |
19,080,088 |
24,945,319 |
(467,842) |
1,047,821 |
149,793 |
729,772 |
(20,163,817) |
5,511,274 |
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Loss for the year |
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(416,784) |
(416,784) |
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Other comprehensive income |
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(268,218) |
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(268,218) |
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(268,218) |
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Total comprehensive loss for the year |
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(268,218) |
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(268,218) |
(416,784) |
(685,002) |
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Issue of shares |
50,000 |
445,000 |
495,000 |
- |
- |
- |
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495,000 |
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Total contributions by and distributions to owners of company recognised directly in equity |
50,000 |
445,000 |
495,000 |
- |
- |
- |
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495,000 |
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Balance at 31 March 2019 |
5,915,231 |
19,525,088 |
25,440,319 |
(736,060) |
1,047,821 |
149,793 |
461,554 |
(20,580,601) |
5,321,272 |
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CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 March 2019
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Figures in Pound Sterling |
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2019 |
2018 |
Cash flows from operating activities |
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Cash used in operations |
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(302,518) |
(598,676) |
Interest income |
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3,993 |
180 |
Net cash from operating activities |
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(298,525) |
(598,496) |
Cash flows from investing activities |
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Additions to intangible assets |
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(573,093) |
(67,275) |
Movement in investments |
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- |
(797,338) |
Net movement on group company loans |
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(159,608) |
(170,236) |
Net cash flows from investing activities |
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(734,701) |
(1,034,849) |
Cash flows from financing activities |
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Proceeds on share issue |
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495,000 |
1,061,825 |
Net cash flows from financing activities |
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495,000 |
1,061,825 |
Total cash movement for the year |
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(538,226) |
(571,520) |
Cash at the beginning of the year |
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539,301 |
1,110,821 |
Total cash at end of the year |
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1,075 |
539,301 |
Statement of Directors' Responsibilities for the year ended 31 March 2019
· The directors are required in terms of the Companies Act 2006 to maintain adequate accounting records and are responsible for the content and integrity of the consolidated annual financial statements and related financial information included in this report. It is their responsibility to ensure that the consolidated annual financial statements fairly present the state of affairs of the Group as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with the applicable UK laws.
· The consolidated annual financial statements are prepared in accordance with International Financial reporting standards (IFRS) and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgments and estimates. The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the Group and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the Group and all employees are required to maintain the highest ethical standards in ensuring the Group's business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the Group is on identifying, assessing, managing and monitoring all known forms of risk across the Group. While operating risk cannot be fully eliminated, the Group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behavior are applied and managed within predetermined procedures and constraints.
· The directors are of the opinion, based on the information and explanations given by management that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the consolidated annual 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 annual financial statements. The directors 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 annual financial statements support the viability of the company. the directors have 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 and they are satisfied that the Group has, or has access to, adequate resources to continue in operational existence for the foreseeable future.
Colin Bird Chairman
Andrew Francis Sarosi Finance & Technical Director
J Richard Wollenberg Non-Executive director
Christopher Molefe Non-Executive Director
NOTES TO THE CONSOLIDATED AUDITED FINANCIAL STATEMENTS
1. Basis of preparation
The consolidated annual financial statements have been prepared in accordance with International Financial Reporting Standards IFRIC interpretations issued by the International Accounting Standards Board and the Companies Act 2006. The consolidated annual financial statements have been prepared on the historical cost basis, except for certain financial instruments at fair value, and incorporate the principal accounting policies set out below. Cost is based on the fair values of the consideration given in exchange for assets and they are presented in Pound Sterling. The accounting policies applied are consistent with those of the previous period.
The comparative figures for the financial year ended 31 March 2018 are not the Company's statutory accounts for that financial year but the consolidated accounts. Those accounts have been reported on by the Company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not give any reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under sections 498 (2) or (3) of the Companies Act 2006, relating to the accounting records of the company.
2. Basis of consolidation
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. Financial review
The Group reported a net loss of £ 416, 784 (2018: loss of £ 1,026,891). Basic loss is 0.14 pence (2018: loss of 0.45 pence) per share. Operating expenses for the period under review are down 35.27 % to £ 404,303 compared to £ 624,631 in 2018.
As previously announced, Galileo, on having spent a further USD250 000 on the Star Zinc Project, earned in an additional 34% beneficial interest to take its aggregate interest to 85% in Star Zinc, which is to be realised by way of an 85% equity stake in Enviro Zambia Limited ("EZL"), a joint venture company incorporated between BMR and Galileo. Following Galileo's increased interest in EZL, Galileo's investment in EZL is accounted for as a subsidiary (2018 accounted for as an investment in Joint Venture). The carrying value of Galileo's investment in EZL at the period end was £ 1,272,968 (2018: £ nil). Post the period under review and on 27 June 2019, Galileo acquired the remaining share capital of EZL.
Galileo's direct investment in Glenover is 29% and it also has an indirect investment in Glenover through its shareholding in Galagen Proprietary Limited, a special purpose vehicle incorporated to hold the BEE shareholding in the Glenover project, of 4.99% resulting in a total interest in Glenover of 33.99%. The carrying amounts of Joint Ventures are shown net of impairment losses. Galileo's share of the equity accounted profit/loss for the Joint Venture is recognised from the date of acquisition on 4 July 2011. The loss so recognised for the period under review amounted to £ 16,474 (2018: profit of £ 123,430).
Segmental analysis
Business Unit
The Company's investments in subsidiaries and associates, that were operational at year-end, operate in two geographical locations being South Africa, Zambia and USA, and are organised into one business unit, namely Mineral Assets, from which the Group's expenses are incurred and future revenues are expected to be earned. This being the exploration for and extraction of its mineral assets through direct and indirect holdings. The reporting on these investments to the board focuses on the use of funds towards the respective projects and the forecasted profit earnings potential of the projects.
Geographical segments
An analysis of the loss before taxation is given below:
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31 March 2019 |
31 March 2018 |
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Figures in pound sterling |
Country of operations |
Loss from operating activities
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Profit/(loss) operating activities |
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Rare earths, aggregates and iron ore and manganese |
South Africa |
(16,474) |
123,430 |
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Gold, Copper |
USA |
(793) |
(292,352) |
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Corporate costs |
South Africa and United Kingdom |
(399,517)
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(857,969)
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Total loss before taxation |
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(416,784) |
(1,026,891) |
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An analysis of the assets and liabilities of the geographical segments as at the period end are presented below: |
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Corporate |
Corporate |
Gold/Copper |
Zinc |
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(UK) |
(South Africa) |
(South Africa) |
Zambia |
Total |
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Non-current Assets |
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330,036 |
2,673,225 |
1,582,887 |
1,272,968 |
5,859,117 |
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Current Assets |
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13,428 |
3,469 |
27,037 |
- |
43,995 |
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Non-current liabilities |
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- |
(6) |
(3,840) |
- |
(3,846) |
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Current liabilities |
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(233,988) |
(34,925) |
(309,089) |
- |
(577,995) |
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Net assets |
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109,477 |
2,641,764 |
1,296,996 |
1,272,968 |
5,321,272 |
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4. Taxation
No provision has been made for 2019 tax as the Group has no taxable income. The estimated tax loss available for set off against future taxable income is £1,904,931 (2018: £1,827,985). The Group has not reflected a deferred tax asset in respect of the losses carried forward as the Group is not expected to generate taxable profits in the foreseeable future.
6. Auditors' Report
The comparative figures for the financial year ended 31 March 2019 are not the Company's statutory accounts for that financial year but the consolidated accounts. Those accounts have been reported on by the Company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not give any reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under sections 498 (2) or (3) of the Companies Act 2006, relating to the accounting records of the company.
7. Availability of the Annual Report
This information has been extracted from the Company's Audited Annual Report for the year ended 31 March 2019, copies of which will be mailed to shareholders on 23 August 2019 and a copy will also 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 3HD. Alternatively a downloadable version will be available from 23 August 2019 from Company's website: www.galileoresources.com.
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