Local explorer Rox Resources is considering either selling its Reward zinc project or spinning it out into a new company, as part of a strategic review of its projects and assets.
Local explorer Rox Resources is considering either selling its Reward zinc project or spinning it out into a new company, as part of a strategic review of its projects and assets.
In a statement today, Rox said it was considering a number of options to realise value from its 49 per cent stake in Reward, which it has valued at about $14.25 million, including selling it to a third party.
It is also considering a spin-off into another company that would hold the stake in the project and would list on the ASX, with Rox to retain an interest.
Teck Australia currently owns the majority 51 per cent stake in Reward.
Rox managing director Ian Mulholland said the review enabled the company to evaluate the strategic options for Reward, and to determine what the board thinks will be the best outcome for shareholders.
“A transaction to realise value for the Reward zinc asset would be transformative for the company and allow us to pursue a number of growth opportunities both organically within the current project portfolio and by external transactions,” he said.
If Rox successfully sells of its interest in Reward, it would be focused on exploring at its Fisher East nickel sulphide project north of Kalgoorlie and its Bonya copper project in the Northern Territory.
“We have the belief that we are at, or near, the bottom of the current metal price cycle and this strategy will serve us well as market sentiment and commodity prices improve,” Mr Mulholland said.
Pre-feasibility studies are currently underway at Fisher East.
Rox, which was named the 'explorer of the year' at the 2015 Australian Mining Prospect Awards in Sydney this month, also plans to raise about $2.1 million from investors through a placement and entitlements issue.
Rox will place 33.3 million shares at 1.5 cents each to clients of Patersons Securities to raise $500,000, and will offer shareholders one new share for every 10 held through the entitlement issue, on the same terms and conditions as the placement.
If all entitlements are taken up, the issue will raise a further $1.6 million before costs.
About $1 million of the issue will be underwritten by Patersons.
Rox shares were 14.2 per cent lower to 1.8 cents each at 10:15am.
