American Resources Corporation (NASDAQ:AREC) has announced a plan to spin off its ReElement Technologies division, while repurchasing a 7% interest to make it a subsidiary.
The Fishers, Indiana-based company said it would file a Form 10 registration statement in the next 60 days with the US Securities and Exchange Commission to make ReElement a standalone public company.
American Resources CEO Mark Jensen said company management, its board of directors and special committee members concur there are steps to be taken to better unlock shareholder value in the short to long term.
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“Upon the ongoing review of our strategic options, we believe our ReElement division holds exceptional value to both our shareholders and our domestic supply chain. Given its execution to date and opportunities ahead, we feel ReElement is at a point to where it can benefit all stakeholders the best as a standalone public company as it continues to vertically integrate a supply chain of domestically-sourced and sustainable critical minerals,” Jensen said in a statement.
Jensen said the repurchase of 7.5% interest in ReElement Technologies is a key element in maximizing value for American Resources shareholders.
“We believe it is an accretive use of capital while also aligning well with our share repurchase program," he said.
Goals for ReElement
As a standalone entity, ReElement will ramp up production of lithium from recycled materials and virgin ores per year to over 5,000 tons, plus over 2,000 tons of rare earth elements to go into permanent magnets, according to American Resources.
It added that ReElement would continue to use environmentally and socially positive technology both domestically and internationally for rare earth and battery elements purification. This displaces the toxic method of hydrometallurgical (solvent extraction) process used today in the industry.
Goals for American Resources
The parent company will continue to expand production from its McCoy Elkhorn complex, and close the tax-exempt bond issuance for its Wyoming County, West Virginia complex. It said it would also ramp up production of the world's first fully integrated complex of mid-vol carbon and rare earth and critical battery element concentration production.
As well, the company noted it would continue to use ReElement electrolysis technology to produce rare earth and critical battery elements concentrates from carbon-based feedstocks to sell to ReElement as additional feedstock for separation and purification.
Finally, American Resources will complete the company-sponsored SPAC for American Acquisition Opportunity Inc's merger and dividend of majority of shares.
American Resources Corporation is a next generation and socially responsible supplier of rare earth and critical elements, carbon and advanced carbon materials to the new infrastructure and electrification marketplace.
Contact the author at susie@proactiveinvestors.com