Helix Resources Ltd (ASX:HLX) is ready to spin out its nickel and cobalt interests in the prolific Cobar Basin of NSW into a special-purpose vehicle aimed at maximising value for shareholders.
The new venture — dubbed Ionick Metals Ltd — has executed a 12-month option agreement with Jodama Pty Ltd, which can pick up vendor and performance shares in a future Ionick float in exchange for three exploration licences.
The idea is to divest the nickel and cobalt interests so Helix can drive its copper endeavours. The explorer is on the hunt for Cobar-style deposits in the NSW copper hotbed.
Ionick will hit the ground running with several cornerstone Helix assets under its belt, including the Homeville nickel-cobalt resource and other high-grade laterite nickel-cobalt prospects.
Once the option agreement executes, Ionick will add more drill-ready tenements and early-stage targets to its growing portfolio.
The team plans to kick things off with a 4,500-metre nickel-cobalt drill program in the coming months.
Setting the scene
Helix managing director Mike Rosenstreich said there was more value to tap in the company’s nickel-cobalt portfolio, which hosts minerals that remain critical to the global energy transition.
“We are excited by the asset profile; a high-grade nickel-cobalt laterite resource at Homeville, surrounded by numerous prospects with shallow, thick nickel-cobalt intercepts highlighting the potential to substantially grow the resource base,” he explained.
“With the Collerina–Homeville area now finally drying out after flooding rains, we look forward to drilling some of these prospects to ‘prove the concept’ of shallow, high-grade, easy-to-define resources.”
Homeville is one of the higher-grade laterite nickel-cobalt deposits in Australia on a nickel-equivalent basis, making it a particularly attractive target for the Ionick team. Because of this, Rosenstreich said resource development was front-of-mind.
“For these types of traditionally ‘capital-intensive’ projects, demonstrating that resource-scale can be addressed is a prime objective with viable process options closely linked to that,” he revealed.
“The project area appears well served by logistics infrastructure, which is a material hurdle holding many similar projects back.
The big picture
Helix has laid plans for Ionick's ASX debut and the copper stock has broken the spinout's fundraising and pre-development strategy into three simple stages,
- IPO phase: Gather funding to drill and delineate a 60 million-tonne-plus nickel-cobalt resource base. The cash injection will also support test-work, designed to underpin a scoping study down the line.
- Pre-feasibility phase: Funds will support pre-feasibility study work, which will assess the process flowsheet and prioritise bench-scale test-work. Infrastructure assessments and initial baseline environmental studies will also factor in here.
- Feasibility and permitting phase: Establish a capital runway for full feasibility work, including trial mining, pilot test-work, community and stakeholder consultations and permitting, as well as developing financing and project development strategies.
The fine print
Ionick plans to pick up the Hillview, Woodlong and Murrabee tenements under its option agreement with Jodoma.
The deal factors in a A$30,000 cash payment and A$60,000 in exploration expenditure in the first 12 months, but there’s an option to extend for another A$40,000 in cash and A$120,000 in exploration expenditure.
Under Ionick’s proposed IPO structure, Jodoma could receive A$300,000 worth of vendor shares, priced at A$0.20 a pop.
There are also milestone share considerations — a 1.5-million-share tranche if Ionick defines a mineral resource of more than 10 million tonnes, and 3 million shares if it reaches a final investment decision that incorporates the Jodoma lease resources.
“This option over the Jodama licences provides a series of early-stage targets to advanced prospects easily accessible from Homeville and complements Ionick’s existing portfolio very well,” Rosenstreich continued.
Distinct commodities, operation synergies
With Ionick poised to accelerate Helix’s nickel and cobalt prospects, Rosenstreich said his company could return to its primary goal.
“Helix’s strategy is focused on copper, with numerous targets and prospects to hunt down,” he explained.
“The nickel-copper exploration is reasonably straightforward in terms of delineating mineralisation, with greater attention required on the metallurgical and processing aspects – hence to us it makes sense to split the two commodity groups.
“Note, there will be synergies and savings between Ionick and Helix’s operations in the area, including overlap on many regional scale data sets.
“We look forward to undertaking the initial drilling work and finalising the business plan for Ionick in the next few months. This should set us up for the IPO runway in the middle of this year.”