PERTH (miningweekly.com) – ASX-listed gold developer OreCorp on Monday flagged plans to demerge its Western Australian exploration assets, allowing the miner to focus on the development of its Nyanzaga gold project, in Tanzania.

OreCorp is proposing to demerge subsidiary Solstice Minerals, which holds the Western Australian assets, including the Hobbex prospect in the Eastern Goldfields, by way of a capital reduction and in-specie distribution.

In conjunction with the demerger, Solstice will undertake an initial public offering (IPO), apply for admission to the official list of the ASX and for quotation of its shares on the ASX.

OreCorp said on Monday that its Western Australian assets were undervalued within the current company structure and accordingly, is pursuing the demerger to unlock the value of the Western Australian assets for the benefit of shareholders.

OreCorp said the proposed demerger and separate ASX listing of Solstice represents the optimal way to unlock value for shareholders by establishing two unique ASX-listed entities with separate geographically focused management teams who are able to pursue independent strategies and growth opportunities.

“With the grant of the special mining licence for Nyanzaga, we believe the time is right to demerge our Western Australian exploration assets and unlock latent value for our shareholders who will continue to participate in Solstice via a pro rata in-specie distribution,” said OreCorp CEO and MD Matthew Yates.

“The demerger and IPO presents an exceptional opportunity to realise the inherent long-term value of these assets in a Western Australian focussed corporate vehicle. The board and senior management of Solstice have an outstanding track record of exploration success in the goldfields of Western Australia at Nimary-Jundee, Dalgaranga and Mertondale. We also believe Solstice will attract stronger investor attention and valuation in a standalone entity, while allowing OreCorp to maintain its focus on developing Nyanzaga.”

The proposed transaction remains subject to final approval from the OreCorp board, and regulatory and shareholder approvals.

OreCorp's Nyanzaga project is expected to produce 213 000 oz/y over a mine life of 12 years, with OreCorp expected to invest $287-million to bring the project into production