Galileo Resources

AIM newcomer Galileo Resources (GLR) offers rare earth stockpiles in South Africa worth a claimed $1.3bn (£810m) with phosphate deposits and iron ore and manganese prospects.

Headed by Jubilee Platinum (JLP) chairman Colin Bird, Galileo is the former PLUS shell General Industries and secured its South African interests by buying Skiptons Global Investments for £10.2m in shares in a deal which brought the renamed Galileo the Glenover phosphate and rare earth project, originally set up by mining giant Gold Fields. General Industries' originator, genial property veteran and onetime stockbroker Richard Wollenberg, chairs Galileo, which has £1m from General Industries' kitte and raised another £3.3m last month at 23p.

The company has a £4.34m earn-in deal for 51% of Glenover with its present owner, local group Fer-Min-Or, which bought it from Gold Fields for what Bird describes as 'a pittance'. He suggests the project's stockpile of three million tonnes of phosphate with 2.5% of 'heavy and light' rare earth elements could be worth a discounted $1.3bn, with rare earths priced at $8,500 a tonne and points out that, for another £13.3m, Galileo can take its stake to 70%.

Bird says the Skipton deal brought Galileo the right to a mining licence for the adjacent Qokolweni stone stone quarry, which should furnish cash flow for the rare earths and phosphate. With rare earths seen as a tighter market these days, since China switched from periodic dumping to export curbs, the shares, now 34.5p, could repay a bold punt.