Emerging lithium producer Tawana Resources (ASX: TAW) has announced plans to restructure its assets to reflect its focus on the recently commissioned 50%-owned Bald Hill lithium operation in Western Australia.
The company plans to shift its wholly-owned Cowan, Yallari and Mofe Creek projects to a new entity SpinCo.
“Following the recent commissioning and first spodumene production at Bald Hill, Tawana’s primary focus is to ensure effective ramp-up of production and to ensure exploration activities are focussed near-mine to drive growth in mineable reserves and extend associated mine life at Bald Hill, of which, the company has explored less than 5% of the known prospective area,” Tawana managing director Mark Calderwood said.
He noted, as a result, Cowan, Yallari and Mofe Creek would not receive the “appropriate management focus” and budget allocation under the current structure to ensure the projects were progressed in a timely manner.
“Furthermore, the board of Tawana recognises the value of the Cowan, Yallari and Mofe Creek project may be better recognised by the market by de-merging these assets from Tawana to form a new standalone exploration company,” he added.
Under the planned spin out, 85% of all SpinCo’s shares will be distributed to Tawana shareholders and Tawana would retain a 15% stake in the entity.
Mr Calderwood said the spin out would enable both companies to advance their respective assets and unlock more value for SpinCo shareholders.
At this stage, there are no plans to list SpinCo on the ASX, but this may be considered further down the track.
Cowan and Yallari are both lithium projects situated in WA, while Mofe Creek is an iron ore project in Liberia.
Tawana is targeting mid-year for the proposed spin out to be completed once it gains shareholder and other regulatory approvals.
Bald Hill lithium operation
News of the spin out follows Tawana’s announcement earlier this month it had produced its first lithium concentrate as operations continued ramping up to produce 155,000 tonnes per annum of lithium concentrate under stage one.
Additionally, the crew was working on recommissioning the tantalum processing hub to unlock the project’s 5.1 million pounds of contained tantalum resources
Bald Hill covers 774 square kilometres and includes four mining leases, one mining application, 12 exploration licences, eight prospecting licences and a general-purpose lease.
Shares in Tawana had lifted almost 7% on the news to A$0.47 by midday.