ACDC Metals on the highway to ASX listing
ACDC Metals aims to raise $8 million in its initial public offering.
Gearing up for next month’s ASX debut is ACDC Metals, which aims to build a mine-to-market critical metals company by combining heavy mineral sand assets and a proprietary rare earth element (REE) processing technology.
The explorer is seeking to raise $8 million through an initial public offering (IPO) of 40 million shares at $0.20 each, which would give it a market capitalisation on listing of $14.5 million.
It is slated to list on the ASX on 19 December under the ticker code ‘ADC’.
ACDC holds three mineral sand projects on the edge of the Murray Basin in western Victoria – Goschen Central, Douglas and Watchem – where past drilling has demonstrated zircon, leucoxene, rutile and monazite mineralisation.
Raised funds from the IPO will be divided between the three projects for drilling and further exploration studies, in addition to monazite processing, which involves extracting and separating REE from monazite mineral sands using technology exclusively licenced from Canada-based Medallion Resources (TSX-V: MDL).
Proceeds will also be allocated to corporate and working capital.
Mineral sands projects
ACDC’s three Murray Basin projects have been discovered across two styles: strandline, which are narrow, long and high-grade deposits containing zircon and titanium; and Wimmera industrial minerals (WIM) style, which sit as planar and extensive, with significant monazite (REE) content.
Previous work was undertaken in the late 1980s and early 1990s at Goschen Central, located 50km south-southwest of Swan Hill in northern Victoria, with early drilling targeting high-grade coarse-grained strandline style deposits. A large WIM-style heavy minerals deposit was defined within the south-west quadrant of the exploration licence.
ACDC notes another explorer reviewing a similar area in 2002 had estimated zircon grades of 20-27% with additional REE and titanium minerals.
ACDC’s Douglas project comprises two exploration licences: Acapulco and Chetwynd, which had planned to be mined by historical owners by projects were halted due to prevailing commodity prices at the time.
Post-listing, the company plans to define a JORC 2012-compliant resource and undertake scoping and feasibility studies at both Goschen Central and Douglas.
A drilling program is also planned at ACDC’s third project, Watchem, a strandline-style deposit that lies in close proximity to the Donald mineral sands project owned by Astron Corporation (ASX: ATR).
Medallion monazite process
Under a definitive agreement signed in October, ACDC was granted the right to use Medallion’s proprietary monazite processing technology to extract REE from monazite sourced as a by-product of heavy mineral sand production.
The licence agreement included the issue of 4.5 million ACDC shares to Medallion, bringing Medallion’s shareholding in ACDC to about 15% (pre-IPO). Upon successful completion of a pilot plant utilising the Medallion monazite process, the company will receive an additional 2.5 million ACDC shares by converting performance shares.
To take advantage of this technology, ACDC plans to construct a mineral sand monazite processing plant for south-eastern Australia
Upon commercial production, Medallion will be able to convert other performance rights into an additional 750,000 ACDC shares. Following full conversion, Medallion would own 8.05 million shares of ACDC.
Medallion also has the right to purchase or place up to 20% of the ACDC shares issued in the IPO subject to approval of the lead underwriter and Medallion’s diluted ownership not exceeding 19.9% of ACDC’s issued share capital (including the conversion of all performance rights).
In addition, ACDC will pay Medallion a 2% royalty on the sale of mixed REE compounds and other minerals produced by the company’s projects and processed using the Medallion monazite process.