West Africa gold explorer Marvel Gold (ASX: MVL) is a step closer to completing the spin-out of its Chilalo graphite project with shareholders approving the process last month and a share exchange agreement executed.
Marvel is proposing to spin-out its Chilalo graphite project into its wholly-owned subsidiary Evolution Energy Minerals.
Evolution will undertake an IPO to raise $22 million.
A share exchange agreement has been executed where Marvel will sell Chilalo to Evolution in exchange for $10 million Evolution shares and $2 million in cash.
Out of the $22 million raising, $9.5 million has been allocated to repay lender Castlelake LP. This will result in all lender security over Chilalo being removed.
After its ASX-listing, it is expected Marvel will hold a 31% stake in Evolution.
“Signing the share exchange agreement is a significant milestone in the spin-out of the Chilalo graphite project,” Marvel managing director Phil Hoskins said.
Mr Hoskins said the spin-out not only delivers non-dilutional funding to Marvel, but also provides shareholders with “meaningful” exposure to Chilalo as it is progressed.
Requirements for official IPO launch
The official launch of the IPO remains conditional on several regulatory approvals including the greenlight from the Tanzania Fair Competition Commission.
It is also dependent on securing cornerstone investor support and approval from the ASX to list.
Mr Hoskins said the company was “confident” in securing cornerstone investor support and meeting other regulatory conditions.
Marvel anticipates approval from the Tanzanian FCC by mid-August, with the prospectus to be launched “promptly thereafter”.
An ASX listing is targeted for late September or early October.
Tabakorole gold project
Marvel’s flagship asset is the Tabakorole gold project in Mali, which currently hosts 910,000 ounces of contained gold.
An upgrade to this resource is expected during September with aggressive exploration underway.
Mr Hoskins expects the updated resource will exceed 1Moz of contained gold.
The project landholding spans 830 square kilometres.