The Iroquois Project and Bryah Basin Project will be held by a wholly owned subsidiary of Strickland (DemergerCo), which will seek to list on the Australian Securities Exchange
Strickland Metals to pursue demerger of its Iroquois Zinc-Lead Project. (Credit: S. Hermann / F. Richter from Pixabay)
Strickland Metals Limited (ASX:STK) (Strickland or the Company) is pleased to announce that it intends to pursue a demerger of its Iroquois Zinc-Lead Project located in the Earaheedy Basin in Western Australia (80% Strickland; 20% Gibb River Diamonds Ltd (ASX:GIB)) and its Bryah Basin Project located approximately 80 kilometres north of Meekatharra in the Gascoyne district of Western Australia (100% Strickland), subject to the Company obtaining the necessary shareholder, ASX and regulatory approvals (Demerger). The Demerger will create a dedicated, Western Australia focused base metals exploration company with a focused management team and resources to unlock the value of these assets. The Demerger will enable Strickland to focus its resources on developing its flagship Yandal Gold Project.
The decision follows a strategic review of Strickland’s portfolio which concluded that a demerger of the Company’s Iroquois Zinc-Lead Project and Bryah Basin Project is likely to be the optimal structure to maximise value for Strickland shareholders. Strickland believes that both the Iroquois and Bryah Basin Projects are undervalued within the current company structure.
If the Demerger conditions are satisfied, Strickland shareholders are expected to receive a pro-rata allocation of fully paid ordinary shares in DemergerCo via an in-specie distribution on a record date to be determined by the Strickland Board, with further details to be provided in due course. In conjunction with the Demerger, DemergerCo will undertake an initial public offering (IPO), and apply for admission to the official list of the Australian Securities Exchange (ASX).
Accordingly, the Demerger would aim to deliver Strickland shareholders a standalone, listed, Western Australian focused base metals exploration company with a strong balance sheet to target tier-1 base metal discoveries.
Strickland expects the Demerger process to be completed in the first half of 2023, conditional on all necessary approvals having been obtained which will include among others, shareholder, ASX and regulatory approvals.
Strickland will apply for a class ruling from the Australian Tax Office to confirm that demerger relief is available pursuant to the Income Tax Assessment Act 1997 (Cth) among other matters.
The Demerger is also subject to final approval from Strickland’s board. Strickland reserves the right to vary the proposed terms of, or not proceed with, the Demerger in its absolute discretion.
The Iroquois Project is located directly along strike from Rumble Resources Limited’s (ASX : RTR) Earaheedy Project Chinook zinc-lead discovery. The project is subject to a joint venture, 80% of which is held by Strickland and a 20% free carried interest held by Gibb River Diamonds Limited (ASX:GIB). Strickland is the Manager of the Joint Venture.
Source: Company Press Release