American Resources Corporation (NASDAQ:AREC) has announced the filing of a Form 10 registration statement with the US Securities and Exchange Commission for the planned spin-off of its ReElement Technologies LLC division into a standalone public company.
The company noted that commercialization success has positioned ReElement to become a standalone public company leading the critical and rare earth minerals industry with purification and refining methods. Its patented chromatography technology is low-cost and environmentally safe enabling it to collaboratively provide scalable localized refining solutions for rare earth and critical battery minerals.
“We are extremely excited about our progress as a business, the milestones we have achieved in producing ultra-high pure and sustainable rare earth and critical minerals from domestic sources, and the numerous opportunities we have in front of us,” American Resources Corporation CEO Mark Jensen said in a statement.
“We believe our strategic positioning within the market is unique as a value-added provider of the most efficient and environmentally-safe critical minerals refining solutions ever developed,” he added. “Our consumer, energy and defense industries require these specific minerals to function and our domestic supply chain requires safe, flexible and low-cost refining capacity to exist and thrive.”
READ: American Resources says ReElement Technologies subsidiary inks MOU for lithium ore refinement trial shipments
American Resources explained that the Form 10 statement includes detailed information about ReElement Technologies, including an overview of its business and strategy, historical information and competitive advantages, among other details.
It said ReElement's goals as a standalone entity are to:
- Ramp up to over 25,000 tons per annum of lithium from recycled materials and virgin ores;
- Ramp up to over 2,000 tons per annum of rare earth elements to go into permanent magnets;
- Continue to deploy its environmentally and socially positive technology both domestically and internationally for rare earth and battery elements purification displacing the toxic method of hydrometallurgical (solvent extraction) process used today in the industry;
- Continue to expand internal capabilities both upstream and downstream on the magnet and lithium-ion battery recycling industry; and
- Continue to expand its upstream and downstream partnerships for both rare earth and critical battery elements.
To affect the separation, American Resources said ReElement will first undertake a series of reorganization transactions including converting from a limited liability company to a corporation, instituting a shared resource arrangement and establishing an independent board of directors and executive officers.
American Resources will subsequently distribute a majority of SpinCo's common stock to American Resources' stockholders, and following the share distribution, SpinCo, holding the business, will become an independent public company.
The planned spin-off of ReElement Technologies is intended to be tax-free for American Resources and American Resources shareholders for U.S. federal income tax purposes. To effect the separation, American Resources plans to distribute up to 90% of ReElement Technologies' common stock to American Resources' shareholders. Upon the planned spin-off, American Resources will distribute to its stockholders, as a pro-rata dividend, one-half of a share of ReElement common stock, for every share of American Resources common stock outstanding.
"We are confident that our patented and proprietary refining methods will be an important contributor to our domestic manufacturing and supply chain development as well as our national security and sustainability needs,” Jensen continued. “Our management, board of directors and special committee concur that our ReElement division holds exemptional value to both our shareholders and our domestic supply chain. Given our current position in the marketplace, we believe that spinning off ReElement into a pure play company will help unlock the value of the business for all of our shareholders."
American Resources is a next-generation, environmentally and socially responsible supplier of high-quality raw materials to the new infrastructure market.
Contact the author at stephen.gunnion@proactiveinvestors.com