Chalice Mining Ltd (ASX:CHN, OTCQB:CGMLF) is preparing to hand over the keys to its gold project portfolio.
The new owner? A standalone exploration company — spun out from the CHN team — that will soon list on the ASX.
Chalice’s Pyramid Hill, Viking and Mt Jackson gold plays will soon demerge from the business and come under proposed ASX debutant Falcon Metals Limited’s (ASX:FAL) wings.
Existing shareholders will retain a stake in the gold-centric spinout, securing one new FAL share for every three CHN shares they currently hold.
Ultimately, the move frees up resources for Chalice to expend on its top priorities: the world-class Julimar nickel-copper-platinum group element (PGE) project and the broader West Yilgarn province in Western Australia.
Chalice is actively exploring for nickel, copper and PGEs at its Julimar Project in Western Australia.
A new, ASX-listed gold explorer
Speaking to the gold asset demerger and initial public offering (IPO), Chalice Mining managing director and CEO Alex Dorsch said the company was pleased to confirm some of the key details with investors.
“[The spinout] will result in the establishment of a significant new, well-funded ASX-listed gold explorer with a high-quality portfolio spanning some of Australia’s most highly-endowed gold provinces.
“Importantly, Chalice shareholders will retain exposure to these assets via an in-specie distribution of shares in Falcon Metals on a one-for-three basis.
“I think this is a great result for our shareholders, particularly coming on the back of the standout returns that Chalice has been able to generate over the past 18 months.”
Introducing: Falcon Metals
The ASX’s newest gold explorer will join the register with three precious metals assets to its name, dotted across Australia’s south.
At the top of its portfolio is the Pyramid Hill project — a district-scale, 5000-square-kilometre-plus gold play in Victoria’s famed Bendigo Zone.
The ASX debutant will headquarter in Melbourne once it goes public, bringing it closer to the Pyramid Hill opportunity.
After it demerges, Falcon will hold exploration interests over the largest exploration licence holding of any company in the Bendigo Zone.
The iconic region hosts the world-class Fosterville Gold Mine and historic Bendigo Goldfield, which host more than 8 million and 22 million gold ounces, respectively.
Falcon’s portfolio will be further enhanced by two other early-stage but highly prospective gold projects in Western Australia: the Viking Project and the Mt Jackson Project.
Building Falcon’s leadership team
As it prepares for Falcon’s IPO, Chalice has unveiled the leadership team behind its gold exploration spinout.
Non-executive chair
Dr Mark Bennett will join the team as non-executive chair, bringing over 30 years’ experience in gold and base metal exploration.
In a past life, Dr Bennett founded and led Sirius Resources, where he picked up the "Prospector of the Year” award for the world-class Nova-Bollinger nickel-copper discovery in 2013.
He went on to lead the company until its $1.8 billion merger with IGO Ltd.
Mark is currently the executive chairman of S2 Resources (ASX:S2R) Ltd and serves as non-executive director with Todd River Resources Ltd (ASX:TRT).
Managing director
Working alongside the non-executive chair will be Tim Markwell: Falcon’s managing director.
Tim is a geologist, fund manager and mining executive with more than 25 years’ experience in gold and base metal exploration.
He’s worked with ASX-listed investment company Lion Selection for more than 14 years and held a series of board roles across public companies.
Tim was a non-executive director and acting CEO at Celamin Holdings (ASX:CNL) Ltd, as well as non-executive director at both Predictive Discovery Ltd (ASX:PDI) and Anax Metals Ltd.
Prior to Lion Selection, the incoming MD worked in senior technical roles at BHP Group PLC (LSE:BHP) and Golder Associates.
He did a resource analyst stint at broker DJ Carmichael.
Non-executive director
Chalice leader Alex Dorsch will also serve as a non-executive director, ensuring the gold project transition runs smoothly.
Commenting on the appointments, Dorsch continued: “We are incredibly fortunate to have secured the services of these two highly-regarded explorationists, and we are looking forward to their stewardship of what will be one of the most dynamic new gold companies on the ASX.
“Given their vast depth of expertise and capability – building on the strong foundations already created by Chalice – I am confident that Falcon Metals will be incredibly well-placed for discovery success.
“The Chalice technical team, led by Dr Kevin Frost and Graham Kubale, have done a superb job in advancing the Pyramid Hill Project over the last three years, setting Falcon up with an incredible array of compelling drill targets.
Demerger details
On the Chalice and Falcon demerger, CHN investors will receive one new FAL share for every three Chalice shares they currently hold under an in-specie distribution.
As it prepares to part ways with its parent company, Falcon is gearing up for an IPO to raise between $15 million and $30 million.
CHN shareholders can buy-in under a priority offer, which allows them to secure a share package in proportion with their existing holding.
Any shares not picked up in the priority round will form the shortfall offer — under which eligible Chalice shareholders and new investors can subscribe for Falcon shares.
Of course, the demerger is subject to final board, regulatory and shareholder approvals.
However, if it’s approved, Chalice will spin out the gold projects before years’ end.
Dosrch concluded: “I am very much looking forward to the demerger and IPO proceeding, obviously subject to shareholder approval.
“I encourage shareholders to look out for the prospectus and offer documentation and encourage shareholders to take advantage of the opportunity to participate in the upcoming priority offer.”