Home » Australian tycoon Matthew Yates’ OreCorp moves to offload Australian assets to focus on Tanzanian gold

Australian tycoon Matthew Yates’ OreCorp moves to offload Australian assets to focus on Tanzanian gold

by Omokolade Ajayi

Australian-based minerals company OreCorp Limited has announced its plans to demerge its Western Australian exploration assets, as it moves to focus on developing its gold project in Tanzania, the Nyanzaga Gold Project (Nyanzaga).

The demerger of the Australian assets, which is subject to shareholder and other requisite approvals, will see the mineral company part ways with Solstice Minerals Limited, a wholly-owned subsidiary that controls its Western Australian assets.

The Western Australian assets include the Hobbes Prospect (within the Yarri Project) in the Eastern Goldfields.

In line with the proposed demerger, OreCorp proposes to spin off Solstice by way of a capital reduction and in-specie distribution.

As a result, Solstice will undertake an IPO, apply for admission to the official list of the Australian Securities Exchange (ASX) and for a quotation of its shares on the ASX.

The company explained that the de-merger is a strategic move that will lead to a value unlock for all stakeholders and entities linked to OreCorp, as its Western Australian assets are currently undervalued within the company’s structure.

The management noted that the strategic move allows OreCorp to focus on the development of Nyanzaga in Tanzania, with Solstice focusing on the exploration of the Western Australian assets.

The recent move comes nearly one month after the company secured a special mining license from the Tanzanian government for its Nyanzaga gold project.

OreCorp Founder and Managing Director Matthew Yates said that, with the new mining license, it is time to demerge the company’s Western Australian assets and unlock latent value for shareholders who will continue to participate in Solstice via a pro-rata in-specie distribution.

“The demerger and IPO presents an exceptional opportunity to realize the inherent long-term value of these assets in a WA focussed corporate vehicle,” he said. “We also believe Solstice will attract stronger investor attention and valuation in a standalone entity, while allowing OreCorp to maintain its focus on developing Nyanzaga.”

Recently, mining companies have refocused their attention on high-grade mines and projects in Africa.

Nearly a week ago, BHP Group, a leading Anglo-Australian mining resources group, announced that it is on course to invest $100 million in one of Kabanga’s nickel projects in Tanzania, as the demand for electric vehicles triggers a surge in demand for the metal used in batteries.

The decision to invest $100 million in Kabanga Nickel comes nearly three years after the mining behemoth sold its last Africa asset in 2019 to focus on less risky mining jurisdictions, such as Australia, Chile, and Canada, which have been developed extensively.

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