PERTH (miningweekly.com) – ASX-listed gold developers Gascoyne Resources and Firefly Resources have inked a binding demerger implementation agreement for the demerger of certain assets into a newly incorporated subsidiary of Firefly.
The two companies in June this year struck a merger agreement under which Gascoyne would acquire all of the ordinary shares in Firefly, with Firefly shareholders to receive 0.34 Gascoyne shares for each Firefly share held.
The merger would combine Gascoyne’s Dalgaranga tenements with Firefly’s Yalgoo tenements, and would unlock access to some 1 200 km2 of highly prospective tenements in greenstone belts.
The merged company is expected to have a pro forma market cap of some A$159-million, cash and equivalents of A$33-million and bank debt of A$17.5-million.
In conjunction with the merger, the two companies in June also flagged the demerger of their copper/gold and lithium exploration assets into a new energy metals focused exploration company, named Firetail Resources, which would be listed on the ASX.
The two companies on Thursday told shareholders that the demerger of these assets would be conducted by way of an equal capital reduction in Firefly, and an in-specie distribution of shares in Firetail to Firefly shareholders.
Under the demerger, Firefly shareholders will receive one share in Firetail for every 12.05 Firefly shares held on the record date, and on completion of the demerger, existing Firefly and Gascoyne shareholders would hold 90.1% and 9.9% respective interests in Firetail.
The demerged entity will initially be a publicly unlisted company, but will seek a listing on the ASX at a later date, following the implementation of the merger between Firefly and Gascoyne.
As part of the demerger, Firefly will make available up to A$1.5-million in cash to Firetail.
In addition to Paterson project, the demerger will also include the Forrestania gold project, as well as lithium rights over the tenements held by Firefly’s subsidiary, Lightening Bug Resources, the lithium mineral rights over the Yalgoo tenements, and those over certain wholly owned tenements at Dalgaranga.
Firefly shareholders are expected to vote on the demerger of these assets in September.