- 01Sky and Advance propose gold-asset spin-out.
- 02Five projects span 2,000+ sq km; Sky to hold 18.75%.
- 03Target: $6m IPO, ASX listing H1 2027.
Sky Metals (ASX: SKY) has agreed to a non-binding proposal to combine its New South Wales gold projects with Victorian assets held by Advance Metals (ASX: AVM) in a separately listed Australian gold exploration business.
The proposed company would receive Sky’s Cullarin, Kangiara, and Caledonian projects alongside Advance’s Myrtleford and Beaufort gold projects, assembling a portfolio spanning more than 2,000 square kilometres across southeastern Australia.
Sky would receive 15 million shares, valued at $3 million under the proposed transaction, giving it an indicative 18.75% ownership interest when the new company lists.
The structure would leave Sky with exposure to future gold exploration while allowing it to concentrate management attention on its core tin-tungsten development portfolio.
Retained Exposure to Gold
The Cullarin Project hosts the high-grade Hume gold discovery, while Kangiara contains a previously worked mine along with gold, copper, zinc, and silver mineralisation.
Sky considers the wider NSW landholding underexplored, with the proposed combination intended to provide dedicated technical resources and exploration funding.
Advance would contribute its two Victorian projects in exchange for 30 million shares with a deemed value of $6m, equivalent to an indicative 37.5% interest at listing.
Its Myrtleford project includes the Happy Valley discovery, where a three-dimensional geological model has identified three principal gold-bearing quartz veins extending to at least 500 metres below surface.
Together, the assets would offer an exploration pipeline across the Lachlan Fold Belt, with further exploration required to establish the extent of mineralisation.
Proposed Ownership Structure
The new business would target an initial public offering of $6m at 20 cents per share and admission to the Australian Securities Exchange in the first half of 2027.
Eligible shareholders in Sky and Advance are expected to have access to a priority offer of up to $3m within the IPO.
An indicative 80 million shares would be on issue at listing, with IPO investors holding 37.5% and seed investors holding the remaining 6.25% alongside the two contributing companies.
Neither Sky nor Advance would receive cash consideration for its project interests, with their issued shares expected to be escrowed for 24 months after listing.
Dedicated Gold Company
“Sky believes this transaction provides an excellent opportunity to unlock the value of its highly prospective gold assets through a dedicated exploration company focused solely on gold discovery,” Sky managing director Oliver Davies said.
The proposed board would include a director nominated by Sky and another nominated by Advance, together with an independent chair and an executive leader agreed by both parties.
“We look forward to working with the Sky team to progress the transaction and establish what we believe has the potential to become an exciting new Australian gold exploration company,” Advance chief executive officer Adam McKinnon added.
The parties are aiming to satisfy all conditions to the transaction by March 2027, including due diligence, binding agreements, shareholder approvals, regulatory consents, and the required IPO subscriptions.
Under the proposed mechanism, the new company would acquire Sky’s project interests through its subsidiary Aurum Metals Pty Ltd, while Advance’s Victorian interests would transfer through the relevant acquisition agreement.
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