Core Lithium (ASX:CXO) announces that it will divest its gold and non-lithium exploration tenements through a new ASX-listed entity, Axiant Resources.
The spinout will enable Core to focus on its Finiss Lithium Project, with Managing Director Paul Brown saying that the company remains “fully focused” on its flagship asset.
With the divestment, the company can then continue advancing its other non-lithium projects.
“By establishing Axiant, we will create an independent, well-funded gold focused exploration company that can progress the gold and non-lithium assets and harness the current interest in gold companies with a dedicated team and funding,” Brown says.
Axiant plans to raise between $8 million and $10 million at $0.20 per share through an initial public offering (IPO).
Eligible Core shareholders will be entitled to a priority offer, with the prospectus expected to be lodged in late July ahead of an August listing.
Core has signed a share sale agreement to sell two wholly owned subsidiaries containing the assets to Axiant, including the 230km² Shoobridge Gold Project in the Northern Territory.
The company will receive 20 million ordinary shares and up to 20 million performance rights as consideration.
This allows Core to retain an initial 33% shareholding in Axiant at minimum subscription and approximately 29% at maximum subscription.
The divested assets will be excluded from Core’s final investment decision restart study or mine plan for the Finniss Lithium Project.
However, Core will retain lithium rights across several tenements within the transferred assets and gain gold rights over 10 exploration licences at Finniss.
The performance rights will vest within three years upon the announcement of an inferred resource of at least 250,000 ounces of gold, or within five years for 500,000 ounces.
Both milestones require a 20-day volume-weighted average price of at least $0.20.
Argonaut has been appointed lead manager to the IPO, with Steinepreis Paganin acting as legal adviser to Axiant and Mills Oakley advising Core.
Axiant’s management team
Retiring Core Chairman Greg English will lead Axiant as Non-Executive Chairman, while current Core General Manager Exploration Michael Fechner has been appointed Managing Director.
Peter Bewick also joins as a non-executive director, and Dan Travers steps in as CFO and company secretary.
English says the spin-out establishes a robust entity in a proven region:
“Axiant will be established as a focused gold exploration company with a strong portfolio in the prospective Pine Creek gold region of the Northern Territory,” English says.
“We look forward to building on Core’s work and creating value through disciplined, technically driven exploration.”
Core Lithium (ASX:CXO) is a hard-rock lithium company that owns the Finness Lithium Operation on the Cox Peninsula in the Northern Territory.
Write to Paula Fabe at Mining.com.au
Images: Core Lithium
