03/06/2021 - 15:45

Hawkstone eyes lithium focus

03/06/2021 - 15:45

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Subiaco-based Hawkstone Mining will focus on developing its Big Sandy lithium project in Arizona, having announced plans to demerge its metals assets into a new listed entity.

Hawkstone eyes lithium focus
Hawkstone plans to focus on developing its Big Sandy lithium project in Arizona. Photo: Hawkstone Mining

Subiaco-based Hawkstone Mining will focus on developing its Big Sandy lithium project in Arizona, having announced plans to demerge its metals assets into a new listed entity.

As part of the move, Hawkstone will change its name to Arizona Lithium and sell its interest in the Devil’s Canyon gold-copper project in Nevada, along with the Western Desert gold-copper project in Utah and Lone Pine gold project (that includes the past-producing King Solomon mine) in Idaho.

The projects will form a separate ASX-listed entity, called Diablo Resources.

Hawkstone will receive 40 million vendor shares as part of the spinout, which it will distribute to existing shareholders after Diablo’s listing.

The new business will issue 32.5 million shares under an initial public offering to raise $6.5 million.

The offer is priced at 20 cents and implies a value of $8 million for Hawkstone’s shareholding in Diablo.

Hawkstone said its shareholders would have the right to participate in a $3.5 million priority offer.

The spinout and change of name are subject to a number of conditions including shareholder approval, to be sought at a meeting next month.

Hawkstone managing director Paul Lloyd said shareholders would gain maximum value from the company’s metals projects through the Diablo spinout.

“Located in world class gold and copper regions, these projects hold significant potential and the spinout will provide shareholders with a non-dilutive and ‘off balance sheet’ solution to accelerate exploration on these assets in a period of high gold and copper prices,” he said.

“It will also allow the existing shareholders to participate in the new listing on a priority basis relative to their existing shareholding in (Hawkstone), as well as being rewarded with a significant stake by way of an in-specie distribution.”

Mr Lloyd said Diablo would have an exciting start to trading, with many high priority drill targets identified at the company’s Devil’s Canyon project.

Hawkstone will become a dedicated lithium company post spinout, with Mr Lloyd citing a shift in market sentiment to battery minerals.

Shares in the company closed up 7 per cent on Thursday to trade at 3 cents per share.

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