Kalamazoo Resources, an Australian gold explorer, has partnered with gold miner Karora to demerge and list its lithium projects on the Australian Stock Exchange (ASX.)
The new company will be called Kali Metals. Karora will vend into Kali its lithium mineral rights across an extensive range of projects located south of Kalgoorlie, Western Australia.
In the new company, Kalamazoo will own a 55% stake while Karora will own the remaining 45% stake prior to an initial public offering (IPO).
After the IPO, shareholders of Kalamazoo will be provided with an initial 25% in-specie distribution of Kali shares and priority entitlement to subscribe to those shares.
When listed, Kali is expected to become one of Australia’s leading critical minerals exploration company with consolidated significant lithium and critical minerals tenure totaling 3,833km².
Kali’s exploration portfolio will be next to lithium mines and deposits in the Eastern Yilgarn covering 11,607km² and Pilbara covering 199km² in Western Australia.
Through the IPO, Kali is expected to raise between A$10m and A$12m and use the proceed to fund its exploration and drilling plans across the combined portfolio.
Kalamazoo chairman and CEO Luke Reinehr said: “With Kalamazoo’s primary focus on gold, we have contemplated alternatives for our Pilbara and Lachlan Fold Belt lithium projects for quite some time. When the opportunity arose to join with Karora, into what we consider will be a significant critical minerals exploration company in Australia, the rationale was compelling. We are delighted to have reached an agreement with Karora that will see our lithium portfolio combined with its highly prospective tenement package located in a Tier 1 lithium mining jurisdiction.
“The transaction will result in the establishment of Kali as a well-funded ASX-listed lithium explorer, with an unrivalled portfolio of assets located in the hottest hard-rock lithium regions, not just in Australia, but globally. The spin-out of Kali will provide our shareholders with ongoing exposure to these expanded assets and strategy.”
At IPO, Kali will hold significant lithium exploration interests in the Pilbara, which hosts the Pilgangoora and Wodgina lithium mines, and south of Kalgoorlie in the Eastern Yilgarn, which hosts the nearby Mt Marion and Bald Hill lithium mines and the Pioneer, Manna and Buldania lithium deposits.