Reward Minerals proposes spin-out

Reward Minerals Ltd has proposed to spinout its Jervois base metals and Gabanintha gold-copper projects into wholly-owned subsidiary Jinka Minerals in a bid to become the first Australian potash producer.

The Nedlands-based company said it will be issued with 14.9 million Jinka shares and 14.9 million Jinka options in return for the projects.

Should the projects be divested to Jinka, Reward's net assets will be reduced by nearly $3 million.

The Jinka shares will be distributed to Reward shareholders with one Jinka share for every 4.06 Reward shares through a pro rata in specie distribution.

Shareholders will vote on the distribution on October 17.

Reward's flagship asset is the Lake Disappointment potash project.