Gold: Ardea will launch IPO spin-out of NSW assets
Mining
Mining
Spinning off assets is a common tactic for companies, particularly miners. It often increases the share price and allows the companies to streamline operations.
This morning the latest spin-off was announced. Ardea Resources (ASX: ARL) will spin off its NSW gold and base metal tenements into a new company, Godolphin Resources.
The majority of Ardea’s projects are in Western Australia and are predominantly nickel. This includes its Goongarrie Nickel cobalt project which it claims to be part of the largest nickel cobalt resource in the developed world with a granted mining lease.
However it also owns a gold and base metals project in the Lachlan Ford Belt. After considering selling the project, the board has decided to spin it out.
As part of the IPO, the company will be raising between $4.5 million and $8 million. Ardea shareholders will receive an in-specie distribution of 30 million shares and priority to purchase more in the IPO.
The spun-out company, Godolphin, will retain the existing operations team, led by manager Johan Lambrechts. The board will consist of Mark Sykes, Ian Buchhorn and one new director.
Ardea CEO Andrew Penketham said: “The NSW assets being in a separate fully independent vehicle will crystallise their value and allow them to be advanced independently of Ardea’s West Australian exploration and development initiatives.”
Godolphin’s assets will include four resource targets: Lewis Ponds, Mount Aubrey, Yeoval and Lachlan Mine; and two gold drill targets: Wiseman’s Creek and Gundagai.
Lewis Ponds is the most promising, with a JORC-compliant mineral resource of 6.62 million tonnes at 1.5 g/t of gold. It also contains 68g/t of silver, 2.4 per cent of zinc and 1.4 per cent of lead.
Ardea shares only lifted half a cent at market open to 37.5 cents. However, since listing in February 2017, it has nearly doubled from its 20-cent IPO price.
The price of gold has continued to rise. After hitting A$2000 last week, it is now at A$2,044 as at 10am (AEST). On an AUD basis it has gained over 12 per cent this year and over 25 per cent since last August.
Echo Resources (ASX: EAR) have announced a resource update for its Mt Joel project. The total resource is 1.4Mt @ 2.1 g/t for 91,000 oz of gold. 73,800 of this will come from one deposit and over 98 per cent of the resource is clarified as indicated. The JORC mineral resource for its entire Yandal gold project is 28.6 MT @ 2.0 g/t for 1.8M ounces of gold. Echo’s managing director Victor Rajasooriar said further drilling, planned in August, will grow existing resources further.
Spectrum Metals (ASX: SPX) announced assay results at its Penny North prospect. Results included 1m at 26.0g/t of gold as well as 5m at 28.9g/t of gold. Mineralisation was extended both south and north and now measures 650 metres in strike length and extends 230 metres vertically. Spectrum shares jumped 8 per cent at market open.
West Australian Goldfields focused Bardoc Gold (ASX: BDC) also announced results. Among the results from its Bardoc gold project were 22.3m @ 1.26 g/t of gold. There was also an intersection of 3m @ 3.06g/t. The company told shareholders future drilling programs will target these areas to properly examine the mineralisation.
Nonetheless, CEO Robert Ryan said these successes, “have shown that the use of technology and chemical characterisation as part of a systemic and innovative approach to exploration can deliver both entirely new discoveries and significant extensions of existing cornerstone deposits and open up previously explored areas”.