OreCorp will focus its efforts on the Nyanzaga gold project in Tanzania after announcing the demerger of its Western Australia assets.
The WA assets are currently held by OreCorp’s wholly owned subsidiary Solstice Minerals and include the Hobbes gold prospect in the Eastern Goldfields.
Subject to shareholder and other requisite approvals, OreCorp intends to demerge Solstice through a capital reduction and in-specie distribution before the subsidiary looks to list on the ASX.
Solstice aims to conduct an initial public offering (IPO) to coincide with the demerger, which will be conducted through a pro rata entitlement offer to eligible OreCorp shareholders.
This will give OreCorp shareholders the opportunity to invest further into Solstice’s assets, with a shortfall offer in place if any rights are not taken up, giving new investors the opportunity to participate.
OreCorp chief executive officer and managing director Matthew Yates said it was an opportune time to separate the two companies.
“With the grant of the SML (special mining licence) for Nyanzaga, we believe the time is right to demerge our WA exploration assets and unlock latent value for our shareholders who will continue to participate in Solstice via a pro rata in-specie distribution,” he said.
“The demerger and IPO presents an exceptional opportunity to realise the inherent long-term value of these assets in a WA-focussed corporate vehicle. The board and senior management of Solstice have an outstanding track record of exploration success in the goldfields of WA at Nimary-Jundee, Dalgaranga and Mertondale.
“We also believe Solstice will attract stronger investor attention and valuation in a standalone entity, while allowing OreCorp to maintain its focus on developing Nyanzaga.”
Solstice is represented by its Yarri (including the Hobbes prospect), Yundamindra, Ponton and Kalgoorlie projects in WA, comprising 42 granted and application licences spanning a total area of 2617 square kilometres.
All projects are prospective for orogenic-style gold mineralisation, while the Kalgoorlie project has also shown the potential for komatiite-hosted nickel sulphide mineralisation.
OreCorp will provide more information and a timeline for the proposed transaction in February when the notice for the shareholder approval meeting is released.