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- Red Metal (RDM) has unveiled a plan to spin out its Maronan Project through the listing on the ASX of its wholly owned subsidiary Maronan Metals
- The IPO will seek to raise up to $36 million, which will be used by Maronan Metals to fund resource drilling and feasibility programs
- Red Metal will retain a roughly 50 per cent holding in Maronan Metals and will appoint two representatives to Maronan’s board
- With more than 100 million ounces of contained silver, the Maronan Project is considered one of the largest undeveloped silver resources in Australia
- Red Metal is up 8 per cent to $0.14 per share
Red Metal (RDM) has unveiled a plan to spin out its Maronan Project through the listing on the ASX of its wholly owned subsidiary Maronan Metals.
The initial public offering will seek to raise up to $36 million, which Maronan Metals will use to fund resource drilling and feasibility programs.
Veritas Securities will act as the lead manager for the financing, under which Maronan intends to issue 100 million shares at 30 cents each. A further 20 million share may be issued to allow for over-subscriptions, potentially raising another $6 million.
Red Metal will retain a roughly 50 per cent holding in Maronan Metals, and will receive a $2 million payment upon completion of the IPO as a partial reimbursement for expenses incurred in developing the Maronan Project.
Likewise, eligible shareholders of Red Metal will be able to subscribe for up to 33.33 million shares — worth around $10 million — under a priority offer.
Maronan Metals holds a 100 per cent stake in the Maronan Project, located near Cloncurry in Queensland, which hosts more than 100 million ounces of contained silver and is considered one of the largest undeveloped silver resources in Australia.
The board of Maronan Metals will feature two representatives from Red Metal. They include Russell Barwick, currently Non-Executive Chairman of Red Metal and Non-Executive Director of Mount Gibson Iron, Regis Resources and Lithium Power International, and Robert Rutherford, currently Managing Director of Red Metal.
The spin out of the Maronan Project is expected to fast-track its development, which includes the drilling of shallower inferred resources to upgraded levels, testing for extensions of known mineralisation and various feasibility work.
Meanwhile, Red Metal will be free to focus more on its Yarrie, Three Ways, Gulf and Lawn Hill projects in partnership with OZ Minerals, and its wholly owned Corkwood, Pernatty, Pardoo and Nullarbor copper–nickel projects.
Red Metal is up 8 per cent to $0.14 per share at 10:50am AEDT.
