Jadar Resources Ltd (ASX:JDR) intends to spin out its Serbian lithium and borate assets into a newly incorporated Balkan focused subsidiary, Balkan Mining and Minerals Limited, which intends to undertake an Initial Public Offering (IPO) to facilitate listing on the ASX.
Under the proposed transaction, Jadar will retain an interest of approximately 22% in Balkan post IPO, allowing Jadar and its shareholders to maintain exposure to the Serbian lithium and borate assets.
Jadar and Balkan have entered into a subscription and collaboration agreement with Sandfire Resources Ltd (ASX:SFR) whereby Sandfire has agreed to a $2 million cornerstone investment into the planned IPO which would allow Balkan to benefit from Sandfire’s technical and strategic resources.
Proposed transaction and listing will see Jadar create a new Balkan focused metals explorer with the ability to give direct focus to the Serbian lithium and borate assets and allocate the necessary resources required to generate immediate value.
High-quality yet underexplored asset
Jadar executive director Adrian Paul said: “The Rekovac Project represents a high-quality yet underexplored asset that has been of lesser focus for Jadar given our rapidly growing Latin American precious metals portfolio and Austrian lithium assets.
“The newly formed Balkan entity will see a concentrated effort from a newly dedicated management team on driving additional value into the Rekovac Project whilst also allowing Jadar to retain exposure to Rekovac via our equity interest.
“The addition of Sandfire to the Balkan register will be a considerable achievement and a significant validation of the belief in the ability of the new Balkan team and the value proposition of the company.”
Appointment of chairman
Balkan proposes to appoint a strong board led by chairman-elect Sean Murray, whose executive management career includes a number of senior roles in mining and exploration companies across the globe and board positions within Rio Tinto PLC’s affiliate companies.
It also proposes to appoint an on-ground executive team assisted by Milos Bosnjakovic, co-founder and former board member of Adriatic Metals PLC (ASX:ADT).
Serbian lithium and borate assets
Jadar’s Serbian lithium and borate assets, which are the subject of the proposed spin-out, include the Rekovac Project and pending applications for new exploration permits lodged by Jadar.
The company is hopeful that the Serbian Ministry of Energy and Mining will issue the new permits shortly after all approvals for relevant institutions are obtained.
These potential new permit areas are ‘greenfields’ exploration project areas which cover regions considered prospective for lithium, boron and other associated elements.
The Rekovac Project is within the Vardar Zone, an emerging Tier 1 lithium borate jurisdiction.
"Future-facing metal"
Sandfire managing director Karl Simich said: “Sandfire maintains strategic investments in a number of promising growth companies globally through our Sandfire Ventures program and, as part of that initiative, we are very pleased to take up this cornerstone investment as part of the spin-out of the Rekovac Project.
“Sandfire will emerge with a 22% holding in Balkan and, under the collaboration agreement, will provide technical and strategic assistance to the Balkan team as they progress exploration and development of this exciting lithium asset.
“Lithium is a ‘future-facing’ metal that, like copper, forms an important part of the suite of metals required to assist the global transition to decarbonising energy supply.”