Strickland Metals Ltd (ASX:STK) intends to spin out its Iroquois Zinc-Lead Project in the Earaheedy Basin and its Bryah Basin Project in the Gascoyne district into a separate Western Australia-focused entity to unlock the value of the assets and to allow STK to focus on developing its flagship Yandal Gold Project.
The Iroquois and Bryah Basin projects will be held by a wholly-owned subsidiary of STK, to be known temporarily as DemergerCo, which will eventually be listed on the Australian Securities Exchange (ASX).
The roquois project in relation to Rumble Resources' flagship Earaheedy Project
Iroquois to headline DemergerCo
STK chief executive officer Andrew Bray said: “The main focus of Strickland’s management and technical team over 2022 has been on rapidly advancing our flagship Millrose gold project, and pleasingly, we have successfully delivered that outcome for shareholders.
“Of significant importance also within the company’s project portfolio are the Iroquois and Bryah projects. The Iroquois Zn-Pb project lies directly along strike from Rumble Resources Ltd (ASX:RTR)’s world-class Earaheedy project, and has shown tremendous potential for additional Zn-Pb discoveries.
“After the initial discovery hole at Iroquois (IQRC001: 23 metres at 5.5% zinc and lead), Strickland has steadily advanced Iroquois throughout 2022 via soil and rock-chip geochemical sampling and various geophysics surveys. This work has yielded several additional targets, with preparation now underway for a larger drilling campaign to commence in early 2023.
“The work completed to date has shown that Iroquois warrants development as a standalone ASX-listed base metals company. Should the spin-out proceed as proposed, Iroquois will be front-and-centre of the new company. This allows for much more dedicated and focused exploration programs. With the addition of the Bryah Basin project, the new company will also have a largely greenfield project in a highly prospective area to begin advancing.”
In-specie distribution
STK shareholders will receive shares of the DemergerCo, at no cost, on a pro-rata basis via in-specie distribution.
"By conducting a full in-specie distribution of the shares of DemergerCo, all Strickland shareholders at the record date, which will be determined by the board in due course, will receive pro-rata shares (at no cost) in the new company. Existing shareholders will also receive priority allocations in the IPO capital raise,” Bray added.
Strickland expects the spin-out to be completed in the first half of 2023, subject to receiving all the necessary board, shareholder, ASX and regulatory approvals.
Undervalued assets
Plan view of mineralisation and key target areas
STK believes that both the Iroquois and Bryah Basin projects are undervalued within the current company structure.
The Iroquois Project, an 80-20 joint venture between STK, the manager of the JV, and Gibb River Diamonds (ASX:GIB) Ltd is located within the Earaheedy Basin, which is emerging as a significant new mineralised province and is highly prospective for further zinc-lead discoveries.
STK controls approximately 30 kilometres of strike extending from the Rumble Resources Ltd (ASX:RTR)'s Earaheedy Project.
The Bryah Basin Project, meanwhile, comprises five early stage exploration licences covering 260 square kilometres and is about 80 kilometres north of Meekatharra in the Gascoyne district of Western Australia.
The basin is host to volcanogenic massive sulphide deposits of copper and gold formed during early stage volcanism, including Sandfire Resources Ltd’s DeGrussa operations.
It also hosts significant structurally-controlled orogenic gold deposits, including the Fortnum Gold deposits currently being mined by Westgold Resources Ltd (ASX:WGX).
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