Blackstone Minerals to spin out non-core gold projects into Codrus Minerals IPO

Nickel focused Blackstone Minerals (ASX: BSX) has revealed plans to spin out its non-core gold assets into Codrus Minerals which will undertake an IPO and seek an ASX listing.

Projects that will be included in the spin out are Record Mine, Silver Swan South, Red Gate and Middle Creek.

Blackstone currently wholly-owns Codrus which holds the non-core gold assets. Upon completion of the spin out, Blackstone will own 50% of the listed company.

According to Blackstone, rather than divesting the assets, a spin out was preferred because it enables the company to retain exposure to any exploration upside.

Additionally, it will enable Blackstone’s existing knowledge of the projects to be transferred to Codrus.

Blackstone managing director Scott Williamson said the spin out allows a dedicated management team to focus on driving value from the non-core assets.

“Codrus will provide an excellent platform and catalyst for both growth and monetisation of these assets.”

Meanwhile, for Blackstone, the spin out paves the way for the company to focus on its flagship Ta Khoa nickel-copper-platinum group element project in Vietnam.

Codrus Minerals IPO

Under the Codrus IPO, existing Blackstone shareholders will be offered a priority allocation.

Codrus will seek to raise a minimum of $5 million with the IPO to be launched in the June quarter.

Silver Swan South, Red Gate and Middle Creek are all located in Western Australia.

The Silver Swan South project encompasses 38.5 square kilometres and is 8km northeast of the Kanowna Belle gold mine which has an endowment of more than 5 million ounces.

Aircore drilling at Silver Swan South has returned 10m at 3.2 grams per tonne gold from 68m, within a broader intercept of 15m at 2.2g/t gold from 64m.

Mineralisation extended to end of hole.

Over at Red Gate, which is 140km from Kalgoorlie, the project covers 145sq km. It is 10km north of the 900,000oz Porphyry gold mine.

Blackstone has worked towards firming up drill targets for testing at the project.

Adjacent to the former Millennium Minerals Nullagine gold project in the Pilbara, Middle Creek is 37.7sq km.

Nullagine’s mothballed Golden Eagle mine has produced 400,000oz gold since 2012 and hosted resources of 1.1Moz (as of 31 July 2018).

Novo Resources acquired Millennium late last year and plans to revive Golden Eagle.

Record Mine is located in the US and Bridgestone has an option agreement to acquire the tenements that make up the project.