Cape Lambert Iron Ore Ltd plans to spin off its gold assets into a $3 million initial public offering.
Cape Lambert Iron Ore Ltd plans to spin off its gold assets into a $3 million in a public float.
The junior miner is to restructure its mineral exploration and production assets through the formation of a 100 per cent owned subsidiary, International Goldfields Ltd, which will hold Mt Ida, Evanston and other non-core gold assets.
Cape Lambert then proposes to list the subsidiary on the Australian Stock Exchange through an initial public offering of 15 million shares at 20 cents per share to raise up to $3 million.
Cape Lambet and its shareholders will hold approximately 70 per cent of the new company.
Cape Lambert executive chairman Tony Sage said that through the creation of International Goldfields and subsequent IPO, the company would realise the true value for its gold assets.
"The board believes that the value of the company's gold operations are not currently being fully reflected in the company's share price," Mr Sage said.
"This is largely due to the recent acquisition of the Cape Lambert (iron ore) project being undertaken in conjunction with the significant and sustained increase in gold price.
"The proposed de-merger is expected to release significant value and result in the distribution of this value directly to Cape Lambert's shareholders, who following the de-merger will hold shares in two listed entities."
Cape Lambert intends to make an in specie distribution of approximately 71 per cent of the securities it holds in International Goldfields to Cape Lambert's shareholders, subject to obtaining approval for the proposed listing.
The proposed IPO will provide funds for the further exploration and development of International Goldfields gold projects at no cost to Cape Lambert.
Following the completion of a mine feasibility study in late 2005, mining at the Mt Ida gold project in Western Australia will commence in the second quarter 2006.
