Havilah Resources Ltd (ASX:HAV) plans to gain maximum benefit from its suite of uranium assets in South Australia’s world-class Frome Basin uranium province through a proposed IPO of wholly-owned subsidiary NU Energy Resources Pty Ltd.
As well as gaining value in the uranium assets and enabling both companies to focus on their core focus areas, the spin-off plan coincides with strong uranium market fundamentals supporting increased demand and stronger prices.
After conducting a strategic review of the company’s current mineral asset portfolio, Havilah’s board decided to dispose of the non-core uranium assets.
The board considered various options and determined that sponsoring an IPO of the uranium assets held by subsidiary NU Energy, which until recently was named Curnamona Energy Pty Limited, had the potential to deliver the best value for shareholders.
Crystallising value
Havilah’s technical director Dr Chris Giles said: “It is our objective that the proposed IPO will help to crystallise value in these quality uranium assets for our shareholders and allow the assets to be explored and developed independently of Havilah’s other activities.”
Subject to prevailing market conditions and other factors, it is intended to raise at least $10 million in an IPO for the ongoing exploration and development of the NU Energy uranium assets.
HAV shares have been as much as 19% higher intraday to A$0.22.
In prolific region
Many of Havilah’s exploration licences north of the Barrier Highway in northeastern South Australia are highly prospective for Tertiary palaeochannel hosted uranium deposits similar to the nearby Honeymoon restart project, which is being readied for production.
Numerous potentially economic grade uranium intersections have been returned from earlier extensive drilling campaigns across the region.
“Our uranium assets are in the world-class Frome Basin uranium province in South Australia, located between the Beverley uranium mining camp (owned by Heathgate Resources Pty Ltd) that has been operating continuously for over two decades and Boss Energy Ltd’s Honeymoon restart uranium project,” Giles said.
“There is a major uranium-enriched Curnamona Craton basement source area and widespread roll front uranium mineralisation shedding from it on our extensive under-explored tenements.
“Our Oban uranium deposit has a well-defined JORC mineral resource with considerable upside expansion potential.”
Havilah’s exploration licence area defined by the white boundary covers the highly prospective Frome Basin lying between the Beverley uranium mine and the Honeymoon restart uranium project.
Basement source area
Havilah's recent re-evaluation of available exploration data for the region highlighted the existence of a major uranium-enriched Curnamona Craton basement source area represented by the Precambrian Benagerie Ridge topographic high within its exploration licences.
Such favourable uranium sources are geologically uncommon and are key to development of adjacent palaeochannel hosted uranium deposits as with Beverley and Honeymoon and other nearby deposits.
Previous drilling indicates that the processes of leaching of uranium from basement rocks and deposition in onlapping sands has been active on the Benagerie Ridge.
NU Energy holds full uranium exploration and development rights over this promising, but lightly explored discovery opportunity.
Analysis of earlier drilling that defined Havilah’s JORC inferred resource of 2,100 tonnes eU3O8 at Oban deposit shows potential for expansion with additional resource delineation drilling.
Field leach trials at Oban were curtailed prematurely following collapse of the uranium market after the 2011 earthquake and tsunami that caused the Fukushima nuclear accident.
New techniques and processes introduced in the last decade, including advancements in the use of ion exchange resins, solar energy driven pumps and remote automation provide optimism that Oban deposit and similar prospects within Havilah’s exploration licences could be economically exploited, especially with improved uranium market prices.
Priority offer proposed
As well as retaining exposure to uranium through its holding in NU Energy, Havilah also plans for eligible shareholders to be entitled to a priority offer of shares in the IPO.
Depending on a successful IPO and ASX listing, Havilah’s intention would also be to make an in specie distribution of the majority of the NU Energy shares it owns to eligible HAV shareholders.
A draft prospectus is being prepared which will contain the complete NU Energy IPO terms and is subject to broker advice and sounding of investor appetite and market support over coming weeks.