Twins: Lefroy to demerge and float Goldfields nickel projects in Johnston Lakes IPO
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Nickel has emerged as one of the key commodities poised to benefit from the electrification and decarbonisation of transport and energy, with a new player emerging to join the hunt for the battery metal in WA.
It is none other than Johnston Lakes Nickel, a proposed demerger and IPO from within the stable of high profile West Australian gold explorer Lefroy Exploration (ASX:LEX).
Lefroy has its hands full proving up and drilling out the Lefroy Gold Project and its flagship Burns gold and copper porphyry discovery near Kalgoorlie.
That has presented the opportunity to place renewed focus on its secondary nickel assets through the JLN float.
Those include Carnilya South, located within the Lefroy Project down the road from the famous Kambalda nickel field, Lake Johnston near Norseman and the large Glenayle Project 200km northeast of Wiluna.
A deep dive on those in a second.
Any small cap investor would tell you backing an exploration company is about the people, and some major players are on board to help steer the ship at the new nickel explorer.
They include managing director Graeme Gribbin, once the group exploration manager at successful WA nickel miner Western Areas, and non-executive chair Dave Kelly, a non-exec director at mid-tier ASX gold miner Westgold Resources and resources executive of 35 years.
LEX managing director Wade Johnson, St Barbara and Gold Road Resources chair Tim Netscher and Taurus Funds Management principal Michael Davies will all come on board as non-exec directors.
“We are progressing the demerger/IPO for JLN, with a target of completion during H1/23,” LEX chair Gordon Galt said.
“We have now appointed the directors, including the managing director, so we have a first-class leadership team in place to explore our suite of first-class assets as soon as the demerger/IPO completes.
“This process will crystallise the inherent value in our nickel assets for LEX shareholders and will add to the existing value of our gold assets, which include the Burns Project currently being drilled out for a maiden resource statement early in 2023.”
JLN will have a stacked roster of projects to rival the Geelong Cats after a busy trade and free agency period.
Carnilya South includes nickel rights over one exploration licence 50km southeast of Kalgoorlie, part of LEX’s Eastern Lefroy gold project.
It covers 10km of strike of the Kambalda Komatiite and sits only 1km south of Mincor Resources’ (ASX:MCR) Carnilya Mine, in close proximity to BHP’s (ASX:BHP) central processing hub the Kambalda Nickel Concentrator.
Lake Johnston is also a high level nearology play, covering four exploration licences immediately next to Poseidon Nickel’s (ASX:POS) Emily Ann-Maggie Hays nickel mine and processing facility 200km southwest of Kalgoorlie and 120km west of Norseman.
The Glenayle project meanwhile is the most extensive on JLN’s books, boasting six exploration licences over 2700sqkm 240km northeast of Wiluna in central WA, considered prospective for large igneous province associated magmatic nickel-copper mineralisation.
It was previously explored by global mining giant Vale between 2014 and 2019 before the Brazilian super major quit all exploration activities in Australia.
Vale, interestingly, was a former employer of new JLN MD Gribbin, who as exploration manager of a brownfields team at Vale over a six-year period contributed to the growth and extension of nickel resources at the T1 and T3 mining complexes in Canada’s legendary Thompson Nickel Belt in Manitoba.
Gribbin has 25 years in the resources game as a geo, with the rock-kicker also leading the discovery of nickel sulphides at the Sahara prospect in Western Gawler for Western Areas during eight years as general manager of exploration.
Similarly, Tim Netscher came from the WSA stable, having spent almost eight years there as a NED up to its $1.24 billion acquisition this year by IGO (ASX:IGO).
The former Gindalbie Metals MD also held senior executive roles with QNI, Inco, Vale, Newmont and Impala Platinum.
Johnson was with Newmont Australia for 10 years, including stints as exploration manager of both Australia and Asia-Pacific, while Michael Davies is a NED at LEX, NuCoal Resources and Qmetco Limited with over 20 years of commercial experience in the mining industry including in finance and corporate advice.
Kelly has enjoyed stints as a geo, mining executive, investment banker and corporate advisor, having been a director of Predictive Discovery, Turaco Gold and Renaissance Minerals.
LEX is planning to list JLN in the first half of the 2023 calendar year, with approvals to be sought from its shareholders and the ASX prior to the listing.
The demerger is set to include an in-specie distribution of JLN shares to LEX shareholders, with the date of a general meeting to approve the demerger, entitlement ratio and priority entitlement of LEX shareholders in the IPO among other things to be confirmed in the coming months.
This article was developed in collaboration with Lefroy Exploration, 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.