- Strike Resources (SRK) has proposed the spin-out of its lithium and graphite assets into its wholly owned subsidiary, Lithium Energy
- The company plans to transfer its battery minerals projects into Lithium Energy, which will then seek to list on the ASX
- Lithium Energy will conduct an initial public offering (IPO), issuing up to 45 million shares to raise $9 million
- The proposed spin-out will make Lithium Energy a battery minerals-focused company, allowing Strike Resources to concentrate on its iron ore assets
- Strike Resources is down 3.92 per cent and trading at 24 cents per share
Strike Resources (SRK) has proposed the spin-out of its lithium and graphite assets into its wholly owned subsidiary, Lithium Energy.
The iron ore company plans to transfer its various battery minerals projects into Lithium Energy, which will then seek admission to the official list of the ASX. If granted permission to list on the ASX, Lithium Energy will trade under the code LEL.
Lithium Energy has proposed to conduct an initial public offering (IPO), with Canaccord Genuity as the lead manager and underwriter. Through the IPO, Lithium Energy will issue up to 45 million shares at 20 cents each, raising up to $9 million in proceeds.
The prospectus will consist of a Strike priority offer and public offer. Under the Strike priority offer, eligible Strike Resources shareholders will be able to apply for a minimum of 10,000 Lithium Energy shares on a pro-rata basis.
After the IPO, Strike Resources will still hold 34.4 million shares in Lithium Energy, representing a 43 per cent shareholding in the new ASX-lister.
The proposed spin-out will make Lithium Energy a battery minerals company, with a focus on exploring and developing the assets gained from Strike Resources. Primarily, the company will concentrate on developing the Solaroz Lithium Project, located in Argentina.
This will allow Strike to focus its efforts on its iron ore assets. In particular, the company will work to bring the Paulsens East Iron Ore Project in Western Australia’s Pilbara region into production in 2021.
Strike Resources will also work on expanding production at its Apurimac Iron Ore Project in Peru.
Strike is down 3.92 per cent, trading at 24 cents per share at 10:14 am AEDT.