Two flagships is better than one for Peel Mining ahead of $7m IPO
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Holding not one, but two flagship projects is a favourable position for a junior explorer and its shareholders.
This is the situation Peel Mining finds itself in, recently deciding to spin out a gold project it listed into a new IPO and gifting its shareholders a holding in a potential gold mine development.
Perth-based Peel (ASX: PEX) will spin-out its Apollo Hill gold project in Western Australia into Saturn Metals, a new wholly-owned subsidiary. Saturn will then be listed on the ASX following a $7 million initial public offering.
Peel says the spin-out will benefit Apollo Hill from reduced competition for capital and increased attention from management. Also, it will benefit Peel’s shareholder who will have a priority offer to take up shares in the new listing.
Discovered back in 1986 by Fimiston Mining, Apollo Hill was the project Peel floated on back in 2007 and at the time was the company’s flagship asset.
The project, which lies 60 km southeast of Leonora and covers more than 996 sq km of granted tenure and applications, includes the Apollo Hill main zone and the Ra zone.
It has an inferred resource of around 17.2 million tonnes at 0.9 grams per tonne for 505,000 ounces of gold with the maximum depth of the resource at 150m below surface.
Peel has undertaken considerable drilling at Apollo Hill and along strike from the main deposits. Most recently, last year’s drilling campaign encountered high grade gold mineralisation which increased the known strike of the Apollo Hill main zone by up to 250 metres to the southeast.
However, while it has carried out this drilling, Peel’s main focus has shifted to its 50 per cent owned Mallee Bull copper deposit located in the world-class Cobar Superbasin. Peel is in a joint venture with CBH Resources to develop the project.
“The Apollo Hill gold assets were originally acquired as the company’s flagship assets, however the discovery of the Mallee Bull copper deposit in NSW’s Cobar Basin effectively put Peel in the fortunate position of having two flagships,” Peel managing director Rob Tyson said.
“Over time, Peel’s attention has firmly fixed on the exciting potential of our landholding in Cobar. It is now time to unlock the inherent value in the wonderful Apollo Hill real estate by giving it a true life of its own.”
Saturn will issue 20 million shares to Peel as consideration for the Apollo Hill assets. The company will seek to raise up to $7 million through the issue of 35 million shares at 20c issue price.
Approval for the Apollo Hill sale will take place at a general meeting of shareholders in early October.
All going to plan, Saturn is seeking to list on the ASX five days before Christmas on 20th December.
Mallee Bull delivering results
Mallee Bull has been delivering significant high-grade zinc-lead-silver results. Most recently, resource definition drilling at the T1 deposit has returned high-grade hits including nine metres at 20.82 per cent zinc, 10.64 per cent lead, 338 grams per tonne silver and 1.91 grams per tonne gold from 88 metres.
A pre-feasibility study on T1 lens is currently being undertaken and is expected to be due by end of the year.
The study will investigate the conceptual development of T1 as a “dig and truck” operation, under which ore would be milled at CBH’s Endeavour mine approximately 150km away, where surplus milling capacity exists.
Peel is expected to release the results of the PFS by year end.
Shares in Peel closed up 9 per cent at 24c on Friday, valuing the company at $40.2 million.