Hawkstone spinning out gold-copper projects to focus on lithium
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Hawkstone is spinning off its gold and gold-copper projects into a new company to focus entirely on its Big Sandy Sedimentary Lithium project in Arizona.
The company will divest its interests in the Devil’s Canyon gold-copper project in Nevada, Western Desert gold-copper project in Utah, and the Lone Pine gold project in Idaho into Diablo Resources, which will be listed on the ASX.
Hawkstone Mining (ASX:HWK) noted that to reflect its shift in strategic direction, it will change its name to Arizona Lithium.
The company will receive 40 million shares in Diablo, which it will distribute by way of an in-specie pro rata distribution to its existing shareholders.
Hawkstone shareholders will also have the right to participate in a $3.5 million priority offer in Diablo’s proposed $6.5m initial public offering on the ASX priced at 20c per share.
“With the recent shift in market sentiment to battery minerals, we feel that Hawkstone shareholders will gain maximum value from the company’s gold and gold-copper assets via Diablo Resources, as a separate ASX-listed entity,” managing director Paul Lloyd.
“Located in world class gold and copper regions, these projects hold significant potential and the spin-out will provide shareholders with a non-dilutive and ‘off balance sheet’ solution to accelerate exploration on these assets in a period of high gold and copper prices.
“It will also allow the existing shareholders to participate in the new listing on a priority basis relative to their existing shareholding in HWK, as well as being rewarded with a significant stake by way of an in-specie distribution.”
The new company will benefit from significant exploration completed by Hawkstone that has progressed all projects to a drill ready stage.
Lloyd highlighted that Diablo will start its ASX listing with the drilling at the Devil’s Canyon gold project where rock chip sampling has returned high-grade results.
Devil’s Canyon lies within the Carlin Trend in Nevada and is just 20km west of the Bald Mountain gold mine operated by Kinross Gold, which has a 5.9Moz resource and produced 188,000oz of gold in 2019, and 40km north of the 1Moz Ruby Hill gold mine.
The project exhibits similar geology to both mines and hosts small-scale, artisanal copper mining.
Assays of rock samples returned peak results of 191.5g/t gold, 524g/t silver and 10.25 per cent copper.
Western Desert lies within the same sequence of Cambro-Ordovician carbonate and sedimentary rocks that host the prolific Carlin Trend gold deposits 200km to the west.
Previous exploration consisted of minor shafts, adits and dozer scrapes while rock chip sampling by Hawkstone returned results ranging from below detection to a maximum of 25g/t gold, 1,495g/t silver and 6.33 per cent copper.
This article was developed in collaboration with Hawkstone Mining, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.