Proposed Demerger Of Byro East And Orange East Projects
RareX Limited (ASX: REE) has revealed it intends to pursue a spin-out of its non-core Byro East Nickel-Copper-PGE Project (Byro East) and Orange East Gold Project (Orange East), respectively located in Western Australia and New South Wales, subject to shareholder and other requisite approvals.
The decision to pursue a demerger and separate listing of these projects follows a strategic review of the company’s asset base in light of the success of its ongoing resource and exploration drilling programme at its flagship 100%-owned Cummins Range Rare Earths Project, located in the Kimberley region of Western Australia.
Byro East hosts numerous nickel-copper-PGE targets along the geological setting of the Milly Milly intrusions, considered to be analogous to the Gonneville intrusion that hosts Chalice Mining Limited’s world-class Julimar discovery.
RareX secured Byro East in January 2020 prior to Chalice making its Julimar discovery in February 2020. Chalice, Buxton Resources and other private companies have subsequently applied for tenure surrounding RareX’s Byro East Project.
Orange East is located just 15km along strike from the McPhillamys Gold Mine (Probable Reserve of 60.1Mt at 1.05g/t Au for 2.03Moz), which is owned by Regis Resources Limited and shows striking similarities to the McPhillamys Gold Mine.
Specifically, both Orange East and McPhillamys are hosted in the Silurian volcaniclastic rocks of the Anson Formation adjacent to the GCFZ and both have coincident Au-As-Ba-Bi–Pb-Cu-Mo-Te surface anomalies, with the Gunnarbee geochemical anomaly extending over an area ~1,000m north-south by 200m east- west.
The RareX Board said that it considers that, given the company’s strategic focus on the continued exploration and potential development of the Cummins Range Project, the value of Orange East and Byro East is not currently reflected in RareX’s share price and it would be beneficial to the company and its shareholders that the projects be housed in a separately listed vehicle specifically focused on progressing their exploration and development.
Since the start of 2020, the price of nickel has risen by more than 15% from ~US$13,000/tonne to ~US$16,000/tonne, The rising price is widely attributed to increasing demand for minerals that are integral in the production of electric vehicles.
Precious metals prices, and particularly gold, have also appreciated significantly, rising from ~US$1,549/oz to ~US$1,747/oz since the beginning of 2020.
As a result of the successful exploration programmes the company has implemented at Cummins Range over the past 18 months, there has been minimal focus on the Orange East and Byro East projects.
In order to fund further exploration at these projects, minimise shareholder dilution at Cummins Range and provide investors with leverage to the exploration upside at Byro East and Orange East, the company intends to pursue a spin-out of these projects into a separate corporate entity named Cosmos Exploration Limited,
A recently completed review by RareX has concluded that the large surface geochemical anomalies and the IP anomalies have not been explained by the limited RC and diamond drilling along the GCFZ. Many of the IP anomalies have not been tested or have only been partly tested and most of the surface geochemical anomalies have not been tested at all.