PERTH (miningweekly.com) – Junior Tempest Minerals on Thursday announced plans to demerge its lithium projects into a newly listed company.

The ASX-listed company told shareholders that its wholly owned subsidiary West Resources Ventures, which holds several lithium tenements in Western Australia, would proceed with an initial public offering (IPO), and would be renamed Electra Minerals.

West Resource Ventures is also proposing to acquire Lithium of Nevada (LON) which has a binding agreement with TSX-V-listed Iconic Minerals to acquire up to 50% of its Smith Creek lithium project, in Nevada.

West Resource Ventures has entered into a binding term sheet to acquire LON, paying its shareholders consideration shares for the LON tenements. Some 50%, or more than 27.47-million of the consideration shares, would comprise shares in West Resource Ventures, and a further 50%, or 27.4-million, will comprise performance shares that will convert into ordinary shares upon LON earning the 50% interest in the Smith Creek project.

Meanwhile, Tempest said on Thursday that West Resource Ventures would seek cornerstone investors to underpin the pre IPO value of the company by issuing no more than 10% of the pre IPO capital to potential investors, including Tempest shareholders. The company intends to raise a maximum of 3.5-million convertible notes to convert into shares at 10c each, raising A$3.5-million.

The note holders will have the option of converting the shares on being admitted to the official list of the ASX or repaid from proceeds from the IPO.

During the IPO, West Resource Ventures is hoping to raise A$10-million.

“The demerging of the Western Australian lithium assets is an exciting development and will be able to provide greater focus on these high-quality assets. The combination with the Nevada project will provide Tempest shareholders with even further leveraged exposure to the global lithium market,” said Tempest chairperson Brian Moller on Thursday.

Tempest and LON will progress the pre-IPO capital raise and prepare for the planned IPO and ASX listing in the first quarter of 2023.