China-focused Century Global Commodities Corporation (TSE:CNT) is spinning out its wholly owned subsidiary Century Metals into a separate public company, it said.
The public mining company will initially be focused on the exploration of its 100% owned Fabie, Trudeau and Eastchester claim groups for gold, with the potential for acquisition of other precious metals projects.
READ: Century Global Commodities reports substantial working capital as it posts third quarter numbers
Shares in Century Metals will be distributed pro rata to shareholders of Century Global, via a dividend-in-kind.
The spin-out is expected to be completed during the second quarter of the company's 2018-9 year.
Ahead of the transaction, Century Metals will be completing private placings of up to 12mln special warrants at C$0.06 per warrant.
So far, Century has received subscriptions for 5.53mln special warrants for proceeds of around C$271,920 gross.
Century Metals was originally incorporated by Century as Trudeau Gold Inc, and subsequently changed its name to Century Metals in April this year.
Late last year, the group completed a gold-focused exploration programme on Fabie, Trudeau and Eastchester claim groups and a technical report by SRK concluded a two-stage exploration program to test targets on all three was appropriate.
The studies in the first stage are to be followed by trenching and sampling aiming to identify ans prioritize targets for further exploration, including drilling.
The estimated cost of the first phase is around C$244,000.
The second stage recommended exploration program is contingent on the results of the first phase and the estimated cost of the second phase was C$1.034mln.
Century Metals will be fully funded for at least the next 12 months following the completion of the spin-out, and enable it to complete the phase I work, as recommended in the technical report.