West Perth-based Marvel Gold is proposing to demerge a Tanzanian graphite project into a new listed entity that will target $13 million under an IPO, expected to launch next month.
West Perth-based Marvel Gold is proposing to demerge a Tanzanian graphite project into a new listed entity that will target $13 million under an initial public offering, expected to launch next month.
The company plans to spin out its “world-class” Chilalo graphite project into a wholly owned subsidiary named Evolution Energy Minerals, which Marvel says will allow the business (formerly Graphex Mining) to focus on exploring its five gold projects in Mali.
Marvel will seek approval for the spinout at a general meeting with shareholders on June 11.
The business expects to appoint a lead manager and underwriter to the IPO in the coming weeks and a prospectus to be lodged with the Australian Securities and Investments Commission next month, with Marvel shareholders to receive a priority entitlement to subscribe for shares.
Evolution is scheduled to begin trading in July.
Today, Marvel said the proposed demerger would unlock the full value of its Chilalo project, located in the Lindi Region in south-east Tanzania.
The construction-ready project has obtained all necessary permits, managing director Phil Hoskins said.
“Since the re-brand to Marvel and the focus on our Mali gold projects, there has been no value attributed to Chilalo despite Chilalo’s peer comparisons trading at many multiples of Marvel’s entire market capitalisation,” he said.
“The IPO of Evolution is the opportunity for Marvel to remove the historical debt encumbrance and unlock Chilalo’s value potential.
“Evolution has attracted three directors with significant graphite development, construction and marketing expertise, and will be well placed to add value for its shareholders through Chilalo’s development.”
About $6.5 million from the IPO proceeds will be paid to private investment firm Castlelake, which is owed about $9.5 million in secured debt. The remaining $3 million will be paid in cash, either from the IPO proceeds or in Evolution shares.
All lender security over the project will be removed, subject to the minimum raising achieved.
Mr Hoskins said the proposed transaction would allow Marvel to focus on its gold assets including the Tabakorole project in southern Mali, acquired in December last year.
Marvel has since upgraded the project’s mineral resource by 54 per cent, to 23.9 million tonnes at 1.2 grams per tonne of gold for 910,000 ounces.
“Resource expansion drilling is continuing as Tabakorole continues to emerge as a significant west African gold deposit,” Mr Hoskins said.
Shares in Marvel were down 3.6 per cent at 1:22pm AEST to trade at 5.3 cents.
