Metals X selling nickel assets

Metals X has agreed to the sale and spinout of its entire nickel portfolio, in line with the company’s plans to focus on the development of its tin assets.

On Tuesday, Perth-based Metals X said it had signed a term sheet with NICO Resources, which has agreed to purchase all the shares in Metals Exploration, the owner of Metal X’s nickel portfolio.

That includes the Wingellina nickel-cobalt project in Western Australia and the Claude Hills project in South Australia.

NICO will issue $5 million worth of shares to Metals X, priced at 20 cents each, along with 25 million options exercisable at 25 cents and with a three-year expiry.

NICO intends to spin out the nickel assets into an $8 million initial public offering, through which it will issue about 20 million shares.

Metals X said it would receive at least 20 million shares under the IPO, also priced at 20 cents.

The company has proposed to undertake an in specie distribution of shares in NICO as sale consideration to eligible Metals X shareholders (being about 35 per cent of NICO’s total issued share capital, post-IPO).

Metals X said it would retain the remaining NICO shares and directly hold about 29 per cent of NICO’s total issued share capital.

The transaction is subject to a number of conditions including shareholder approval.

Metals X executive director Brett Smith said the deal would allow the company’s shareholders to have a direct holding in a listed vehicle while allowing Metals X to retain a substantial investment in its nickel assets.

It follows the recent sale of Metal X’s copper portfolio including the Nifty operation in WA to Subiaco-based Cyprium Metals for $60 million.

“When combined with the company’s recent sale of its copper assets, the spin out of the nickel assets aligns with the company’s strategy of focusing on the development of its tin portfolio,” Mr Smith said on Tuesday.

He said Metal X’s primary focus would be its 50:50 joint venture tin operation in Tasmania, called Renison.

The company's shares had closed up 6 per cent on Tuesday’s news, to trade at 25 cents.

On Wednesday, shares in Metals X were down 3.2 per cent to trade at 24 cents, as at 11:18am AEST.