Red Metal spins out Maronan share bounty for holders
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Murray Region
Red Metal Limited has delivered a high-value Easter surprise by rewarding its loyal supporters with a direct stake in one of Australia’s most promising silver and copper-gold development plays. The company has announced plans for a major intra-species distribution of ASX-listed Maronan Metals shares; This is a tactical move aimed at unlocking the full potential of both organisations.
Maronan currently holds an impressive mineral resource estimate of 121.9 million ounces of silver, 271,000 tonnes of copper and 760,000 ounces of gold.
Red Metal currently controls 88.5 million shares in Maronan, representing 35.2 percent of the total shares issued. Under the proposed plan, subject to shareholder approval, Red Metal will distribute the lion’s share of the holding directly to its own investors.
If approved, eligible Red Metal shareholders will receive one Maronan Metals share for every 5.25 Red Metal shares they hold on the May 14 record date. Following the distribution, Red Metal will retain a smaller, remaining stake of approximately 15.4 million shares.
The board unanimously recommended the deal, calling it a true win-win. By issuing shares directly to investors, the distribution is expected to diversify Maronan’s shareholder base and increase business liquidity. The move will also make it a much more attractive investment for larger funds as a development decision approaches.
Notably, the spinoff clears the decks to accelerate the discovery of the giant Sybella rare earth element near Mount Isa in Queensland, Red Metal’s primary target. Management believes this move will allow Sybella’s true value to be realized in the market without any of the valuation confusion typically associated with Maronan shares.
Managing director Rob Rutherford said: ” Maronan is recognized as a standout early development opportunity for silver in Australia.”
Sybella is a unique granite-supported system with a target area spanning 12 kilometers in length and 3 kilometers in width, offering enormous tonnage potential from the surface.
The project has a sizeable initial inferred mineral resource of 4.795 billion tonnes at 302 parts per million (ppm) neodymium-praseodymium and 28 ppm dysprosium-terbium. More importantly, the resource contains 788 million tonnes of high-grade, weathered granite component at 297 ppm neodymium-praseodymium.
Recent metallurgical tests using ion exchange have efficiently enriched the rare earth content and separated impurities from the charged leach liquid obtained from weak acid leaching of Sybella ores.
As the project progresses towards pre-feasibility studies later in the year, additional optimization studies that will lead to the precipitation of even higher purity mixed rare earth carbonate are also in preparation.
While Sybella is clearly the flagship project, Red Metal maintains a high-impact exploration pipeline in Australia’s leading mining regions.
This includes a recent joint venture with Chalice Mining on the Callabonna copper-gold project in South Australia. Additionally, the first diamond drilling program at the Pulkarrimarra project in Washington’s Paterson County, partly funded by BHP under the Greenfields Alliance, is also awaiting test results. Pulkarrimarra is riding a trend dating back to Rio Tinto’s giant Winu copper gold discovery.
The company also operates the Pardoo gold and lithium project in the Pilbara; Recent wide-range drilling here has revealed interesting gold values in sedimentary cover sequences. Additionally, a new joint venture with Artemis Resources has been established to test the gravity and magnetic target of the Sharon Dam on the Nullarbor.
Backed by $4.3 million in cash, Red Metal is sharpening its focus through private distribution. By giving Maronan’s leverage directly to shareholders, the company should now be able to focus all its attention on building the Sybella rare earth project into a global stateside and pursue its other main goal: finding Australia’s next Tier 1 copper deposit.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
