ASX listed Metalicity is starting to create a cash war chest to focus its attention on battery metals after receiving the first cash payment of CAD$500,000 from the sale of its West Australian zinc projects into Canadian spin-off, Kimberley Mining.
The payment follows the completion of the first tranche of Kimberley’s CAD$2m seed capital raising.
Metalicity could receive a further C$12m in cash over two years and up to CAD$20m in Kimberley shares for the giant Admiral Bay and Lennard Shelf zinc projects subject to the successful completion of Kimberley’s IPO on the Toronto Stock Exchange.
The company will receive CAD$4 million in cash at the completion of the IPO, which will allow it to retain exposure to any upside from the development of the zinc assets through its 40% stake in Kimberley.
The balance of the cash payments will flow over the next two years, subject to Kimberley hitting agreed share price targets.
Metalicity moved to spin off its zinc assets in March this year in order to focus on its substantial battery metals assets, albeit it hasn’t quite let go of the apron strings at Admiral Bay or Lennard Shelf as it will still retain a substantial holding in the new Canadian listed company.
With Admiral Bay hosting a massive resource of 170 million tonnes grading 7.5% zinc equivalent, or an in situ resource of 7m tonnes of zinc, 4.6m tonnes of lead and 137m ounces of silver, it is perhaps unsurprising to see that the Kimberley float looks like getting up.
The IPO, which is expected to take place in the December 2019 quarter, aims to raise CAD$25m at CAD80c a share, with monies raised to be directed towards a reinvigorated drilling program at Admiral Bay initially.
This will be followed by a detailed feasibility study and a new round of exploration at the promising Napier Range and Emanuel Range zinc projects in the western Kimberley in W.A.
Metalicity Managing Director Matt Gauci said: “The successful seed capital raising is also a strong indication of demand for the IPO from North American strategic and institutional funds that collectively are underweight in resources.”
“The zinc portfolio of high grade early cash flow opportuniies at Napier Range and the large scale world class exploration opportunity at Admiral Bay, all located in a first world jurisdiction, presents a unique investment case in the zinc space, which is fundamentally short of high quality, long life projects”
In July, Metalicity unearthed two new lithium target exploration areas at its 100%-owned Pilgangoora North project, located 80km south-southeast of Port Hedland in Western Australia’s Pilbara region.
These targets are just 9km along strike from the world class Pilgangoora group of high grade lithium deposits being developed by Pilbara Minerals and Altura Mining.
Metalicity is currently advancing exploration work on its projects with a view towards generating targets and it is also on the hunt for new battery metals projects as its war chest starts to swell.
By Matt Birney
