Alkane committed to demerger of Australian Strategic Materials

Alkane Resources drilling in the East Lachlan region. Source: Alkane Resources.

Alkane Resources has pledged to progress with its plan to separate from Australian Strategic Materials, the owner of the $1.3 billion Dubbo project.

ASM’s zirconium, hafnium, niobium, yttrium and rare earth elements Dubbo project in New South Wales is construction-ready and subject to financing.

Alkane chairman, Ian Gandel said the company was ready to make its final preparations to demerge in the coming months, subject to shareholder approval.

“The turbulence experienced in global equity markets in March and April has abated to the extent that the Alkane board has decided the time is right to make the final preparations to demerge and list ASM in the coming months,” he said.

Gandel encouraged Alkane shareholders to consider the deal, prior to voting in the next shareholder meeting scheduled for early July.

“The demerger of ASM will provide investors two opportunities to grow value; in Alkane as a growing gold exploration, development and production company, and in ASM as an exciting critical materials business leveraged to the changing world economy,” he added.

If the demerger is approved by Alkane shareholders, eligible shareholders will receive one ASM share for every five Alkane shares they own.

Under the demerger, Alkane and ASM entities will be separated, and no cross-holdings between companies will exist. ASM will be led by its managing director, David Woodall, who joined ASM in February this year.

Gandel said Alkane and ASM had also reviewed the best ways to “realise catalysts” for the Dubbo project through the “Clean Metal” metallisation technology – referring to a deal with South Korea’s Zirconium Technology to reduce metallisation costs for zirconium, hafnium, and titanium metals.

Alkane recently executed a binding agreement with Zirconium Technology to fund the final stage research and feasibility in relation to a clean metal process for their Dubbo project.

When fully commercialised, it is estimated the more environmentally sustainable process can reduce metallisation costs by in excess of 50 per cent.

On Tuesday, Alkane also released an update on its Boda gold-copper prospect at the Northern Molong porphyry project near Dubbo.

The latest drilling results from the project have indicated a 0.2 gram per tonne gold equivalent subvertical zone of significant gold-copper mineralisation.

Alkane’s managing director, Nic Earner, said the results further demonstrated the prospectivity of the Northern Molong porphyry project.

“From what we have seen of the mineralisation to date, we believe Boda has genuine potential to be a large, tier-one gold-copper porphyry project,” he said.

Alkane has initiated a substantial program to increase the drilling density at Boda, including testing the Boda South and Kaiser prospects and Boda’s high-grade core.

 

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