Hertz Energy (CSE:HZ, OTCQB:HZLIF) has announced plans to reorganize its Cominco uranium project in Nunavut and its Namibian uranium exclusive prospecting license applications into a stand-alone entity, Hertz Uranium.
The company believes that the spin-out will unlock the value of its uranium assets, which it told shareholders are not fully recognized in the current share price.
The move will also allow Hertz Energy (CSE:HZ, OTCQB:HZLIF) to focus on its premier lithium projects, AC/DC and Snake Lithium, in James Bay, Quebec.
The uranium assets have “historically documented potential” at Cominco and early-stage exploration potential in Namibia, according to Hertz CEO Kal Malhi.
“With the increasing shift to clean energy and concerns around energy security and climate change, we believe uranium can play a large role in the transition to zero-emission base-load electricity generation that the world requires,” Malhi said in a statement.
The Cominco project covers approximately 5,192 hectares and includes two historically documented uranium showings, the Pomie and Yon showings, explored in the 1970s. No modern exploration has been conducted since then.
In Namibia, Hertz Energy (CSE:HZ, OTCQB:HZLIF) has submitted applications for uranium-exclusive prospecting licenses covering 9,627.84 hectares in the Erongo Region, which hosts significant uranium reserves. The company expects the licenses to be granted soon, enabling immediate exploration.
The proposed transaction involves transferring the uranium assets into a subsidiary, Hertz Uranium, and distributing its common shares to Hertz Energy's shareholders on a pro rata basis. This plan is subject to shareholder, regulatory, and court approvals.