Why is the Galileo share price soaring 9% on Tuesday?

Rocket powering up and symbolising a rising share price.

Rocket powering up and symbolising a rising share price.

The Galileo Mining Ltd (ASX: GAL) share price is having a positive session on Tuesday.

In early trade, the cobalt and nickel explorer’s shares were up as much as 9% to $1.74.

The Galileo Mining share price has since pulled back but remains up 3% to $1.64.

Why did the Galileo Mining share price jump 9%?

Investors were bidding the Galileo Mining share price higher this morning amid speculation that the company could be a takeover target.

According to the AFR, the company has been tipped by fund managers to be a target of battery metals miner IGO Ltd (ASX: IGO).

This wouldn’t be an overly big surprise given that IGO currently owns an 8.9% stake in the company. It also has previously worked closely with Galileo Mining’s largest shareholder – mining magnate Mark Creasy.

In addition, IGO is understood to be looking for ways to offset declining production from its Nova mine, which is in relatively close proximity to Galileo Mining’s Norseman project.

Though, IGO is unlikely to make a move until drilling results are released. So, investors may have to wait patiently to see if anything materialises.

What is the Norseman project?

Galileo Mining’s 100%-owned Norseman project is 10km from the Western Australian town of Norseman.

It contains a cobalt-nickel JORC resource and additional prospects with potential for copper, nickel and cobalt mineralisation. Galileo notes that its tenure at Norseman comprises exploration and prospecting licenses covering a total area of 306 km2.

Yesterday the company revealed that it has started reverse circulation drilling at the Callisto discovery at Norseman, with a 4,000-metre program planned to run for approximately five weeks.

Galileo’s Managing Director, Brad Underwood, appears very optimistic on these drilling activities. He said:

The current drilling aims to expand on the early results with drilling designed at a 50 metre spacing across strike to be followed by drill lines along strike to the north.

The extensive prospective strike, combined with the thick and consistent mineralisation drilled to date, indicates the potential for a large mineralised system. Approximately 20 holes will be undertaken in this round of drilling and we look forward to updating the market with results from this exciting new discovery.

All eyes will be on these results in the coming weeks and months.

The post Why is the Galileo share price soaring 9% on Tuesday? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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