Firefly to demerge manganese project into new ASX company
Firefly Resources (ASX:FFR) is moving to demerge its Oakover manganese project in Western Australia into a separate ASX-listed company to be named Firebird Metals.
Existing shareholders will receive an in-specie distribution of 25 million shares in Firebird Metals and also be entitled to participate in a priority issue of shares in the initial public offering, planned for the first quarter of 2021.
Several experienced candidates have already been identified for Firebird’s proposed independent board and management team.
Firefly managing director Simon Lawson says the demerger will allow the company to focus on its flagship Yalgoo gold project in WA, while giving shareholders value from an asset that the market currently ascribes little or no value to.
Manganese is the fourth-most-traded metal in the world, only trailing aluminium, iron ore and copper.
While demand has been growing, supply from South Africa – the biggest producer – has faced significant challenges.
Australian operations are also facing challenges such as higher costs, declining head grades or mines that are reaching the end of their useful life.
Oakover was once Firefly’s flagship project in its previous incarnation as Brumby Resources.
It has a current inferred resource of 64Mt at 10 per cent manganese, and is located 85km east of Newman in a region with known manganese deposits such as Nicholas Downs, Anthill and Sunday Hill as well as E25’s (ASX:E25) Butcherbird manganese project.
On listing, Firebird will focus on undertaking infill drilling of the Oakover resource, and extensional drilling over an identified 4km strike.
It will also assess multiple advanced regional prospects that have undergone limited drill testing to date.
Additional metallurgical benefication testing will be carried out in parallel, with assessment of direct shipping ore opportunities to potentially increase overall project scale.
Separately, Firebird has signed an option and exclusivity agreement to acquire two additional manganese exploration concessions (one still in application) that are in proximity to Oakover.
It will also assess consolidation opportunities in the region.