Segue Resources has enlisted the help of company promoter Ross Smith to assist in the spinout and stockmarket listing of a subsidiary firm, Red October Resources.
Segue Resources has enlisted the help of company promoter Ross Smith to assist in the spinout and stockmarket listing of a subsidiary firm, Red October Resources.
Under a farm-in agreement, Red October would tap into the nickel and non-iron ore mineral rights at the Pardoo nickel project in Western Australia's Pilbara.
Segue said in an announcement to the ASX today that former Enerji Limited director, Mr Smith, will be appointed chief executive of Red October, subject to Mr Smith completing the raising of $650,000 in seed capital.
The farm-in agreement would allow Red October to earn up to 70 per cent of the nickel and non-iron ore mineral rights at Pardoo for project expenditure up to $10 million over five years.
Segue's full announcement is below:
SEGUE RESOURCES TO SPIN-OUT PARDOO NICKEL RIGHTS TO ADVANCE PROJECT EXPLORATION
- Segue prepares for spin out & ASX listing (IPO) of its subsidiary Red October Resources Ltd
- IPO of Red October will fund exploration for nickel & other non-iron ore minerals at Pardoo
Segue Resources Limited (ASX code: SEG, Segue or the Company), an Australian Minerals and Development Company, advises that the Company has formed a subsidiary, Red October Resources Ltd (Red October), that will farm in to the nickel and non-iron ore mineral rights at the Company's Pardoo project (Farmin) in the Pilbara region of Western Australia.
The Farmin is conditional upon the successful ASX IPO of Red October and allows Red October to earn, in 3 stages, up to an initial 70% of the nickel and non-iron ore mineral rights at the Pardoo project for expenditure of at least $10 million over 5 years (see Appendix 1 for a summary of the key terms of the Farmin).
Red October has also entered into an agreement with Mr Ross Smith who will be appointed as the CEO and Managing Director of Red October subject to Mr Smith facilitating the raising of $650,000 in seed capital for Red October. Mr Smith will bring over 15 years of successful capital raising and ASX listed company management experience to Red October.
A brief outline of Mr Smith's experience and achievements is contained in Appendix 2 along with the key terms of his employment contract.
This new funding strategy for the project has become possible as a result of Mithril Resources Limited (ASX code: MTH, Mithril) withdrawing from the nickel and non-iron ore mineral rights at Segue's Pardoo project (Joint Venture).
Mithril did not meet the minimum annual expenditure requirement for 2010 under the Joint Venture due to their priority commitments at other 100% owned projects. As advised in its 7 January 2011 ASX release, Mithril intends to focus on these other projects during 2011 and Mithril has withdrawn from the Joint Venture to allow Segue to advance plans to fund the nickel and non-iron exploration at the Project.
The Pardoo Project tenements contain magmatic and shear-hosted nickel, copper and platinum group elements (PGEs).
Mithril advised, in an ASX release on 2 August 2010, that it has estimated an Inferred Mineral Resource of 50 million tonnes, grading 0.3% nickel, 0.13% copper and 0.03% cobalt (in accordance with JORC guidelines - details of the Competent Person's Statement relating to the mineral resource are contained in the Mithril ASX Announcement dated 2 August 2010).
The timing and final details of the intended spin-out will advised in due course.