Australian Strategic Materials Limited (ASM) is a step closer to listing on the ASX with the board of Alkane Resources Limited (ASX:ALK) (OTCMKTS:ALKEF) resolving to progress the demerger.
This process is subject to finalisation of outstanding regulatory matters and shareholder approval at an Alkane shareholder meeting, which is expected to be convened in early July 2020.
The listing is anticipated to occur in mid-July 2020, providing investors with opportunities to grow value in ASM as a critical materials business leveraged to the changing world economy.
Pilot plant facility
ASM is building a pilot plant facility in South Korea to produce high-purity metals in parallel with developing the design for the world’s first commercial-scale metal plant.
This will help meet the growing demand for a new source into domestic and global markets for ASM’s range of high-purity and value-added critical metals – including zirconium, rare earth magnet metals, praseodymium and neodymium, and hafnium.
Advanced polymetallic project
ASM also owns the $1 billion Dubbo Project in Central West NSW, an advanced polymetallic project with large in-ground resource of zirconium, rare earth elements (including yttrium), niobium and hafnium. This polymetallic project represents a strategic and independent supply of critical minerals for a range of sustainable technologies and future industries.
The Dubbo Project is development-ready, subject to financing, with the mineral deposit and surrounding land acquired, all major state and federal approvals in place and extensive piloting and engineering completed.
Substantial preparation has already occurred in readiness for ASM to operate as an independent listed entity.
In February 2020, David Woodall joined ASM as managing director and has focused on distilling the key value drivers for ASM and the Dubbo Project.
In March, the Australian Government-owned Export Finance Australia (EFA) confirmed interest in financing the Dubbo Project, stating it closely aligns with the initiative by the Australian Government to develop its ‘Critical Minerals’ sector.
At the completion of the demerger, if approved, shareholders of Alkane will have the same proportional ownership in both Alkane and ASM, with the exception of Ineligible Foreign Shareholders.
Under the demerger, the Alkane and ASM entities will be separated and no cross-holdings between companies will exist.
“Time is right”
Alkane chairman Ian Gandel said: “The turbulence experienced in global equity markets in March and April has abated to the extent that the Alkane board has decided the time is right to make the final preparations to demerge and list ASM in the coming months, subject to shareholder approval.
“Since joining in February, ASM managing director David Woodall and the ASM team have focused on distilling the key value drivers for ASM and the Dubbo Project.
“They have brought new focus, momentum and opportunity to the team which is working hard to realise catalysts for the Dubbo Project and the ‘Clean Metal’ metallisation technology in South Korea.
“The demerger of ASM will provide investors two opportunities to grow value; in Alkane as a growing gold exploration, development and production company, and in ASM as an exciting critical materials business leveraged to the changing world economy.”
Alkane shares higher
Alkane shares are almost 10% higher at 83.5 cents and are up from 50 cents on March 17.
In addition to Woodall, the ASM board will comprise Ian Gandel as chairman, with Gavin Smith, Ian Chalmers and Nic Earner serving as non-executive directors.
It is the intention of Nic Earner to resign from the ASM board within the first year following the demerger once a sufficient handover has been completed to David Woodall.
At or before that time, it is likely that additional and suitably qualified non-executive directors will be sought and welcomed onto the ASM board.