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- Marvel Gold (MVL) is set to spin out its Chilalo Graphite Project into a new subsidiary named Evolution Energy Minerals with a proposed IPO and ASX-listing
- The explorer said it is looking to unlock the value of its wholly owned Tanzanian project and remove the attaching $9.5 million debt
- Marvel has proposed an initial public offering of Evolution in the hopes of raising $13 million, with the potential to accept over-subscriptions
- Marvel shareholders are set to receive a priority entitlement to subscribe for Evolution shares in the IPO, however, the proposed transaction will need shareholder and regulatory approval
- Marvel Gold is off 3.64 per cent following the announcement, trading at 5.3 cents per share
Marvel Gold (MVL) is set to spin out its Chilalo Graphite Project into a new subsidiary named Evolution Energy Minerals with a proposed IPO and ASX-listing.
The move comes as the explorer looks to unlock the value of the wholly owned Tanzanian project, where it has spent over $21 million in exploration costs to date.
In providing further explanation for the spin-out, Marvel advised it had repositioned itself with a focus on gold exploration in Mali since July 2020 and that completing the proposed transaction would allow for repayment of a loan debt note and streamline development activities.
Marvel is proposing an initial public offering of Evolution in the hopes of raising $13 million with the potential to accept over-subscriptions.
Under the transaction, Castlelake — the lender which is owed approximately $9.5 million secured against Chilalo — will be paid $6.5 million from IPO proceeds.
The remaining $3 million is set to be paid out in cash out of IPO proceeds or in Evolution shares at the time of the IPO.
Marvel shareholders are set to receive a priority entitlement to subscribe for Evolution shares in the IPO, however, the proposed transaction is subject to shareholder and regulatory approval.
Marvel Managing Director Phil Hoskins said there was no doubting the quality of the Chilalo Graphite Project.
“Since the re-brand to Marvel and the focus on our Mali gold projects, there has been no value attributed to Chilalo despite Chilalo’s peer comparisons trading at many multiples of Marvel’s entire market capitalisation,” he commented.
“The IPO of Evolution is the opportunity for Marvel to remove the historical debt encumbrance and unlock Chilalo’s value potential,” he added.
Marvel Gold is off 3.64 per cent following the announcement, trading at 5.3 cents per share at 1:59 pm AEST.
