RareX spinning off gold-nickel-PGE assets into Cosmos Exploration
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RareX is proceeding with the spin-out of its wholly-owned subsidiary Cosmos Exploration, which holds its non-core gold, nickel-copper and PGE assets.
Cosmos, which will be the new home for the non-core Byro East nickel-copper-platinum group element project and the Orange East gold project, will soon undertake an initial public offering and apply for admission to the ASX.
RareX (ASX:REE) has now entered into a demerger implementation deed that will give its shareholders the opportunity to participate in a priority offer to take up shares in the Cosmos IPO.
Under the deed, RareX will transfer 100% of the Byro East tenements and 75% of its interest in the Orange East tenements in return for Cosmos issuing 10 million shares and paying $80,000 in cash.
It will retain a free-carried 25% interest in Orange East until completion of a bankable feasibility study.
Cosmos will seek to raise $5m via its IPO of 25 million shares at an issue price of 20c each.
RareX said that given its focus on the continued exploration and potential development of the Cummins Range rare earths, the value of Orange East and Byro East is not reflected in its share price and would be best realised in a separate vehicle.
RareX secured Byro East in January 2020 just before Chalice Mining made its Julimar discovery, which resulted in Chalice and other companies picking up ground around Byro East.
The project itself hosts copper-nickel-PGE targets along the Milly Milly intrusions in a geological setting that is considered to be analogous to the Gonneville intrusion that hosts Julimar.
At least one nickel-copper-PGE gossan, an exposed mineral deposit, is noted as present on the Byro East tenure’s ultramafic corridor.
Orange East is 15km along strike from Regis Resources’ (ASX:RRL) McPhillamys gold mine, which it shows striking similarities to.
This is potentially very lucrative given that McPhillamys has a probable reserve of 60.1 million tonnes at 1.05 grams per tonne gold for 2.03 million ounces.
This article was developed in collaboration with RareX, 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.