Marvel Gold Ltd (ASX:MVL) is gearing up for a capital raise after entering a trading halt just before the weekend.
The halt will remain in place until the start of regular trade on Tuesday, August 10, or until an announcement is released to the market, whichever occurs earliest.
Project spin-out advances, key share exchange agreement executed
The company's proposed spin-out of its Chilalo Graphite Project in Tanzania and initial public offering (IPO) of wholly-owned subsidiary, Evolution Energy Metals Ltd, is at an advanced stage – pending final in-country regulatory approvals.
In a key development, a share exchange agreement (SEA) has been executed, under which Marvel has agreed to sell the Chilalo Project to Evolution in exchange for Evolution shares valued at $10 million.
The SEA also includes a cash component of $2 million and is subject to satisfaction of the pre-conditions to the spin-out and based on the currently targeted spin-out parameters.
“Significant milestone”
Speaking to the proposed spin-out and IPO, Marvel managing director Phil Hoskins said: “Signing the SEA is a significant milestone in the spin-out of the Chilalo Graphite Project.
“To facilitate the repayment of the lender, receiving $2 million in cash and retaining $10 million of Evolution shares would be a fantastic result for Marvel shareholders.”