- Alkane Resources (ALK) has decided to progress with its demerger from the critical minerals focused business, Australian Strategic Materials
- Alkane Chairman Ian Gandel said that market turbulence in recent months has subsided enough to make the final preparations for the demerger
- If approved by shareholders, Australian Strategic Materials will be listed on the ASX in mid-July under the ticker ASM
- Alkane shareholders would receive one ASM share for every five Alkane shares held
- Alkane Resources is trading 0.66 per cent higher for 76.5 cents per share
Alkane Resources (ALK) has decided to progress with its demerger from the critical minerals focused business, Australian Strategic Materials.
Alkane Chairman Ian Gandel said that the pandemic-induced volatility of recent months has subsided enough to make the final preparations for the demerger.
“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,” Ian noted.
If the demerger resolution is supported by shareholders at a meeting likely to be convened in early July, Australian Strategic Materials will be listed on the ASX in mid-July under the ticker ASM. Alkane shareholders would receive one ASM share for every five Alkane shares held.
The company would be lead by its Managing Director, David Woodall, while the board would include Ian Gandel serving as Chairman and Gavin Smith, Ian Chalmers and Nic Earner as Non-Executive Directors. Nic Earner, however, would retire from the board after a sufficient handover was completed.
Since the beginning of April 2020, when Alkane allotted $20 million to ASM, the business has been operating its own balance sheet.
Additionally, ASM and Alkane have signed an intercompany services agreement, which provides corporate services and lease at cost during the transition period.
“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, and 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,” added Mr Gandel.
The Dubbo Project in New South Wales has a resource of zirconium and rare earth materials, which ASM plans to develop for supply to the clean energy and transportation industries, among others.
Importantly, the demerger would allow ASM and Alkane to focus on critical materials and gold respectively as Ian explained.
“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,” he continued.
Alkane expects to lodge the demerger booklet with ASIC in June and, due to COVID-19 social distancing guidelines, that the meeting will most likely be held electronically.
Alkane Resources is trading 0.66 per cent higher for 76.5 cents per share at 1:30 pm AEST.