- Magmatic Resources (MAG) wants to demerge its Moorefield Gold Project into its wholly-owned subsidiary Australian Gold and Copper (AGC)
- AGC will then acquire two projects from New South Resources (NSR) and become a combined AGC listing on the ASX
- Magmatic and NSR are proposing an in-specie AGC share distribution, before MAG shareholders are given priority access to the new AGC shares
- Magmatic claims the demerger will allow it to prioritise its own projects and increase shareholder returns
- But, the whole plan is contingent on Magmatic first gaining shareholder approval
- At market open, MAG’s shares are trading 8.11 per cent higher at 20 cents
Mining exploration company Magmatic Resources (MAG) has proposed to demerge its Moorefield Gold Project into its wholly-owned subsidiary Australian Gold and Copper (AGC).
AGC would then acquire two projects from New South Resources (NSR) and eventually become a combined AGC listing on the ASX through an IPO.
Before the IPO process begins, NSR would receive a 40 per cent stake in AGC as consideration for the two projects it plans to acquire. Magmatic will hold the remaining 60 per cent.
These projects, Gundagai and Cargelligo, are located in the central Lachlan Fold Belt of New South Wales and consist of two exploration licences.
They are also located close to Magmatic’s Moorefield project, which also consists of two exploration licences.
Magmatic said it considers the soon-to-be combined AGC project portfolio to have multiple drill-ready discovery opportunities.
For this reason, it wants the demerger to happen, as it will allow AGC to focus on the portfolio – while it focuses on its other East Lachlan gold and gold-copper porphyry projects.
“MAG recognised the regions potential early, acquiring 4 exploration projects, including Moorefield, from Gold Fields (the world 7th largest gold miner), and believe we have had a multi-year head start,” Executive Chairman David Richardson said.
“Combined with the exciting Gundagai and Cargelligo projects, identified and developed by NSR CEO Glen Diemar, AGC’s three projects represent a major portfolio with each project significant in their own right,” he added.
Pending shareholder and regulatory approval, Magmatic and NSR intend to undertake an in-specie distribution of up to 50 per cent of their AGC holdings to their respective shareholders.
Then when AGC announces its IPO, Magmatic shareholders will be given a priority entitlement to subscribe for AGC shares under the offering.
David said the deal would “unlock shareholder value” by giving them access to both MAG and AGC shares.
“We have always described MAG as a junior explorer with a ‘major’s’ portfolio, and this transaction will further unlock shareholder value, giving shareholders exposure to both MAG and AGC shares and further upside of two new gold projects,” he added.
At market open, MAG’s shares are trading 8.11 per cent higher at 20 cents.