Liontown spin-out Minerals 260 makes sense

Minerals 260 will join a recent rash of spin-outs in the junior sector when it lists next month as a separate entity from parent Liontown Resources (reports The West Australian).
16th September 2021

But unlike some of the recent crop, the uncoupling makes sense and looks well structured.

Minerals 260 will house Liontown’s precious and base metals assets with a focus on the prospective Moora project and contiguous Koojan farm-in joint venture project with Lachlan Star.

In March, Liontown reported an intersection of 44m at 1.6g/t gold from 200-244m at Moora’s Angepena prospect, which included 20m at 3.2g/t and 4m at 10.1g/t from the first RC hole drilled.

The project lies in the same geological terrain as Chalice Mining’s celebrated Julimar nickel-copper-palladium project about 95km to the south.

Liontown was the first mover in the district, having picked up its Moora ground in 2018 two years before Chalice pegged Julimar.

Like Chalice, Liontown is from the stable of companies chaired by Tim Goyder, which includes another Julimar district player in Devex Resources.

As the name suggests, Liontown is best know for the success of its flagship lithium project near Leinster, Kathleen Valley, which has driven the company’s market capitalisation to more than $2 billion.

The development of Kathleen Valley has become all-consuming for Liontown, as evidenced by Goyder’s key appointment of former BHP executive Tony Ottaviano to head the company earlier this year.

The Moora project needs clear air and warrants its own focus, which Minerals 260 will provide.

Goyder has tapped Liontown’s technical director and former chief executive David Richards to lead Minerals 260.

Richards boasts a history of discovery, having found the high-grade Vera-Nancy gold deposits in Queensland as well as Liontown’s Kathleen Valley and Buldania lithium deposits.

Minerals 260 has a 1068sqkm footprint at Moora, which includes the neighbouring Koojan joint venture project where it can earn 51 per cent by spending $4m over five years.

Liontown shareholders will receive one Minerals 260 share for every 11.91 share they hold and be given priority in a $15m-$30m raising, which will give the company the funds to drill out Angepena through to feasibility work.

Minerals 260 will have a nominal market capitalisation of $110m upon listing, based on an issue price of 50¢ and it raising the maximum $30m under the IPO.

It is expected to list on October 15 under the code MI6.

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