Strike Resources intends to increase its focus on the Paulsens East iron ore project in the Pilbara, Western Australia by spinning out its lithium and battery minerals assets.
The company plans to create a new ASX-listed entity for the lithium and graphite projects, Lithium Energy.
It will carry Strike Resources’ Burke graphite project in Queensland and the Solaroz lithium project in Argentina.
The Burke project contains a high grade graphite deposit and will allow Strike Resources to meet the anticipated growth in graphite demand.
The Solaroz project comprises 12,000 hectares of lithium mineral concessions within the Salar de Olaroz Basin in South America’s Lithium Triangle in north-west Argentina, adjacent to those operated by Orocobre and Lithium Americas Corporation.
The spin-out will result in Strike Resources owning 34.4 million shares, or a 43 per cent stake, in Lithium Energy.
Strike Resources managing director William Johnson will head the new company as he takes up the role of executive chairman.
Former consultant to Strike Resources, Peter Smith, will become executive director, with Strike Resources chairman Farooq Khan holding the same role.
Lithium Energy plans to raise $9 million by issuing 45 million shares at 20 cents per share to mark its debut on the ASX.
Strike Resources also owns the Apurimac magnetite iron ore project in Peru. The company is targeting first iron ore production from the Paulsens East project this year.
Paulsens East is being developed to deliver six million tonnes a year of high grade iron ore lump and fine products over an initial four-year mine life.
Seventy-five per cent of this will comprise direct shipping ore lump at 62 per cent iron.