Swick in setback over demerger delay

Swick Mining Services has postponed the demerger of its mineral technology business, Orexplore, resulting in the abrupt resignation of the subsidiary’s managing director.

Swick’s shares slid 17 per cent on the news to trade at 15 cents, as at 10am AEDT.

It announced plans for the demerger in February last year and later completed a strategic review of the formerly Stockholm-headquartered Orexplore business, which Swick acquired in 2017.

Today, Swick said a major commercial agreement signed with goldminer St Barbara for its Gwalia operations near Leonora, Western Australia, had been deferred until FY22, due to the client’s “operational priorities”.

That contract, valued at $700,000, was Orexplore’s first infield commercial agreement.

“Swick considers securing commercial projects a key step in developing a clear pathway for the commercialisation of Orexplore’s technology, and therefore a successful demerger,” Swick said in an ASX announcement today.

“In light of these changes, the Swick board has decided to defer the demerger of Orexplore to allow greater time to seed the commercialisation pathway with initial commercial projects.”

As a result of the delay, recently appointed Orexplore managing director Jason Marinko has resigned from the role and will be temporarily replaced by Swick founder and MD, Kent Swick.

Mr Marinko leaves his role as MD this month.

“The board of Swick would like to thank Mr Marinko for his contribution in advancing the commercialisation of the Orexplore technology and readying the company for its proposed demerger,” Mr Swick said.

The company has budgeted between $2.5 million and $3 million to be spent on Orexplore within the next six months while it undergoes continued laboratory test work.

Swick said it was also finalising the $6.4 million cash sale of its surface reverse-circulation drilling business, expected to complete this month.

Its shares were trading 13.4 per cent lower at 2:10pm AEDT to 16 cents.