PERTH (miningweekly.com) – The share price of ASX-listed Alkane Resources rose by nearly 11% on Wednesday as plans to progress the demerger of its subsidiary Australian Strategic Materials (ASM) progressed.

Alkane on Wednesday said that the company’s board has resolved to progress the demerger of ASM, which holds the Dubbo rare earths, niobium zirconium project in New South Wales, and to list the entity on the ASX.

Alkane shareholders are expected to vote on the spin-out at the company’s shareholder meeting in early July.

“The turbulence experienced in the global equity markets in March and April has abated to the extent that the Alkane board has decided the time is right to make the final preparations to demerge and list ASM in the coming months, subject to shareholder approval,” said Alkane chairperson Ian Gandel.

“The demerger of ASM will provide investors two opportunities to grow value; in Alkane as a growing gold exploration, development and production company, and in ASM as an exciting critical minerals business leveraged to the changing world economy.”

At the completion of the demerger, Alkane shareholders will have the same proportional ownership in both Alkane and ASM, with the exception of ineligible foreign shareholders.

If the demerger is approved, eligible shareholders will receive one ASM share for every five Alkane shares held on the record date, with shareholders outside of Australia and New Zealand having their ASM allocations transferred to a sale agent, who will sell the shares once listed on the ASX and remit the net proceeds of the sale to the relevant shareholders in cash.

ASM will be led by its MD David Woodall, who joined the subsidiary in February this year, with the board also comprising Gandel as chairperson, and Gavin Smith, Ian Chalmers and Nic Earner serving as nonexecutive directors.

“Since joining in February, Woodall and the ASM team have focused on distilling the key value drivers for ASM and the Dubbo project, and have brought new focus, momentum and opportunity to the team which is working hard to realise catalysts for the Dubbo project and the ‘clean metal’ metallization technology in South Korea,” said Gandel.

Alkane shares were trading at a high of 84c a share on Wednesday, up from a low of 74.5c.