TIDMIRR
RNS Number : 3161A
IronRidge Resources Limited
01 June 2021
1 June 2021
Strategic Portfolio Review
Restructuring to unlock the value in the Cape Coast Lithium
Portfolio
Creation of a new gold focused entity to fully realise value for
shareholders
Following a strategic portfolio review, the Board of IronRidge
Resources Limited (AIM: IRR, "IronRidge" or the "Company"), has
concluded that the Cape Coast Lithium Portfolio is materially
undervalued in IronRidge's current structure and requires a
distinct, separate focus to release its true value.
The Board therefore announces its intention to progress a
demerger of the Company's gold assets in Côte d'Ivoire and Chad
into a new gold focused entity structured to permit quotation on a
recognised stock exchange (NewGoldCo), subject to regulatory and
shareholder approvals, as required.
HIGHLIGHTS:
Ø Intention to demerge Company's suite of gold assets into a
separate listed entity (NewGoldCo). Board believes that the
creation of a new gold focused company, in a robust gold market, is
the optimal way to realise full value for shareholders
Ø Restructuring to unlock further value in the Cape Coast
Lithium Portfolio following an outstanding Scoping Study which
confirmed the Ewoyaa Lithium Project ("Ewoyaa") as an industry
stand out lithium asset
Ø Board believes the proposed demerger will deliver shareholders
an investment in two high quality companies; each delivering a
clear focus on lithium or gold
Whilst it is in the intention of the Company to progress with a
demerger of the Company's gold assets, there will be a number of
steps and conditions that will need to be addressed as part of
finalising the demerger structure and there can be no guarantee
that the demerger will complete. The Company will make further
announcements to shareholders accordingly.
Commenting, Vincent Mascolo, Chief Executive Officer of
IronRidge, said:
"The proposed demerger is part of the growth strategy for
IronRidge, and today's news represents a truly unique opportunity
for shareholders to benefit from upside in two distinct and
diversified companies at an opportune time for gold and lithium,
respectively.
" The Board expects that today's vision can unlock significant
shareholder value, help mitigate commodity risk as well as enable
the Board to operate with greater efficacies and focus to
capitalise on two highly compelling commodity markets."
Overview and Rationale
The Board considers the Cape Coast Lithium Portfolio to be
materially undervalued at the current share price and in the
current structure of IronRidge and believes that the portfolio
requires a distinct, separate focus to release its true value.
The Board believe that the creation of a new gold focused
company in a strong gold market is the optimal way to realise
further value for shareholders.
Under IronRidge ownership, the Cape Coast Lithium Portfolio,
which includes the Ewoyaa Lithium Project, has been positioned as
an industry standout project, ready for advancement through the
development stages to production.
The Scoping Study confirmed Ewoyaa as a long-life, large-scale,
low-cost open pit project, delivering excellent returns, as
outlined below:
-- Scoping Study supports a business case for 2.0 Million tonnes
per annum ("Mtpa") production operation with life of mine ("LOM")
revenues exceeding US$1.55 Billion, with significant potential to
extend LOM.
-- Eight (8) year LOM operation, producing an average 295,000tpa
of 6% Li(2) O spodumene concentrate.
-- Study delivers exceptional financial outcomes:
o LOM revenues exceeding US$1.55bn, Post-tax NPV(8) of US$345M,
IRR of 125% over 8 years
-- US$68M capital cost with industry-leading payback period of <1 year
-- C1 cash operating costs of US$247 per tonne of 6% lithium
spodumene concentrate Free on Board ("FOB") Ghana Port
-- Pre-tax NPV(8) of US$539M and EBITDA of US$854M for LOM
-- Average EBITDA of US$105M per annum
-- Significant exploration upside potential from the historic
Egyasimanku Hill deposit (1.5Mt @ 1.66% Li(2) O) and surrounding
684km(2) portfolio
Since completion of the Ewoyaa Scoping Study, there has been
significant interest in Ewoyaa relating to potential partnership
and offtake opportunities.
Benefits of the proposed Demerger
-- Separation of IronRidge's gold and lithium projects into
separate focused entities with the objective of unlocking greater
value for IronRidge's shareholders;
-- Permits each separate entity to appropriately resource and
focus on its projects, whilst progressing organic and other value
accretive growth opportunities in their respective sectors;
-- Allows IronRidge to focus all its resources on its
three-stage ramp-up to production strategy at Ewoyaa, following a
very strong increase in interest in the project.
-- Provides IronRidge shareholders with diversification across
investment assets, mitigation of commodity risk;
-- Allows IronRidge shareholders to better share in the uplift
expected from the lithium and EV thematic by attracting investors
seeking this exposure; and
-- Provides a timely, clean separation of assets, providing a
more direct path to value recognition in the Company's asset
base.
For any further information, please contact:
IronRidge Resources Limited Tel: +61 2 8072 0640
Vincent Mascolo (Chief Executive Officer)
Amanda Harsas (Company Secretary)
www.ironridgeresources.com.au
SP Angel Corporate Finance LLP Tel: +44 (0)20 3470 0470
Nominated Adviser
Jeff Keating
Charlie Bouverat
Liberum Capital Limited Tel: +44 (0) 20 3100 2000
Joint Company Broker
Scott Matheson
Edward Thomas
Kane Collings
SI Capital Limited Tel: +44 (0) 1483 413
Joint Company Broker 500
Nick Emerson Tel: +44 (0) 207 871 4038
Jon Levinson
Yellow Jersey PR Limited Tel: +44 (0)20 3004 9512
Henry Wilkinson
Dominic BarrettoMatthew McHale
Notes to Editors:
IronRidge Resources is an AIM-listed, Africa focused minerals
exploration company with a lithium pegmatite discovery in Ghana,
extensive grassroots gold portfolio in Côte d'Ivoire and a
potential new gold province discovery in Chad. The Company holds
legacy iron ore assets in Gabon and a bauxite resource in
Australia. IronRidge's strategy is to create and sustain
shareholder value through the discovery and development of
significant and globally demanded commodities.
Ghana
The Cape Coast Lithium portfolio covers some 684km(2) and
includes the newly discovered Ewoyaa Lithium Project with a maiden
Mineral Resource estimate of 14.5Mt at 1.31% Li(2) O in the
inferred and indicated category including 4.5Mt @ 1.39% Li(2) O in
the indicated category (reported in accordance with the JORC Code).
A Scoping Study on the Ewoyaa Lithium Project, announced in January
2021, supports a business case for a 2.0 Million tonnes per annum
production operation, producing an average 295,000tpa of 6% Li(2) O
spodumene concentrate, with life of mine revenues exceeding US$1.55
Billion. The Company entered into earn-in arrangements with Obotan
Minerals Limited, Merlink Resources Limited, Barari Developments
Limited and Joy Transporters Limited of Ghana, West Africa,
securing the first access rights to acquire the historical
Egyasimanku Hill spodumene rich lithium deposit, estimated to be in
the order of 1.48Mt at 1.67% Li(2) O and surrounding tenements. The
tenure package is also prospective for tin, tantalum, niobium,
caesium and gold, which occur as accessory minerals within the
pegmatites and host formations.
Côte d'Ivoire
The Company entered into conditional earn-in arrangements in
Côte d'Ivoire, West Africa; securing access rights to highly
prospective gold mineralised structures and pegmatite occurrences
covering a combined 3,584km(2) and 1,172km(2) area respectively.
The projects are well located within access of an extensive bitumen
road network and along strike from multi-million-ounce gold
projects and mines. The Company's most advanced project is the
Zaranou gold project which includes high-grade gold drilling
intersections along 8km strike including 6m at 6.44g/t gold from
132m, 6m at 15.11g/t gold from 26m, 4m at 5.16g/t gold from 110m
and 22m at 3.39g/t gold from 8m within a broader 47km long gold
anomalous structure.
Chad
The Company entered into an agreement with Tekton Minerals Pte
Ltd of Singapore concerning its portfolio covering 746km(2) of
highly prospective gold and other mineral projects in Chad, Central
Africa. IronRidge acquired 100% of Tekton including its projects
and team to advance the Dorothe, Echbara, Am Ouchar, Nabagay and
Kalaka licenses, which host multiple, large scale gold projects.
Trenching results at Dorothe, including 84m at 1.66g/t Au
(including 6m at 5.49g/t & 8m at 6.23g/t), 4m at 18.77g/t Au
(including 2m at 36.2g/t), 32m at 2.02g/t Au (including 18m at
3.22g/t), 24m at 2.53g/t Au (including 6m at 4.1g/t (including 2m
at 6.2g/t) and 2m at 6.14g/t), 14.12g/t Au over 4m, 34.1g/t over 2m
and 63.2g/t over 1m, have defined significant gold mineralised
quartz veining zones over a 3km by 1km area including the steep
dipping 'Main Vein' and shallow dipping 'Sheeted Vein' zones.
Corporate
IronRidge made its AIM debut in February 2015, successfully
securing strategic alliances with three international companies;
Assore Limited of South Africa, Sumitomo Corporation of Japan and
DGR Global Limited of Australia. Assore is a high-grade iron,
chrome and manganese mining specialist. Sumitomo Corporation is a
global resources, mining marketing and trading conglomerate. DGR
Global is a project generation and exploration specialist.
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