Emergent Resources has formed a new exploration and development company (NewCo) with Chinese company International Natural Resources (INR), which will seek ASX listing in 2012.
Perth-based Emergent will vend its gold and base metal exploration projects into NewCo and in return will receive $1.6 million in the form of NewCo shares, representing a 20 per cent stake in the company.
INR will invest $4 million in NewCo to hold a 55 per cent stake.
NewCo will seek ASX listing in 2012, with the remaining 25 per cent stake in the company to be offered to Emergent’s shareholders through a priority entitlement, and any shortfall to be made available to the public.
NewCo aims to raise $2 million through the offering.
Emergent will have ongoing direct involvement with NewCo through a seat on the board.
INR has also subscribed for 20.2 million new Emergent shares, giving it a 9.9 per cent shareholding.
Emergent will receive $850,000 from the share subscription, as well as $500,000 in cash from NewCo as reimbursement for past expenditure on its projects.
Emergent said these proceeds would strengthen its cash position and provide it with the means to advance exploration of its current projects and pursue other exploration projects.
Emergent chief executive officer Nathan Lude said the company believed this was the best way to rapidly advance their assets while bringing in additional money.
“Emergent is now in a sound financial position with a cornerstone partner that can provide off-take and is prepared to provide further financial investment to enable Emergent to fulfil its strategies,” he said.
“Combined with the 20 per cent holding in NewCo, the company will be well positioned to create future value for shareholders.”
Emergent shares were up 0.3 cents to 4.8 cents at 11am WST.