This morning Tawana announced their plans to spin off the Cowan, Yallari and Mofe Creek assets into a new public Company, SpinCo.
The purpose of this move is to allow the existing board and management team, which will remain with Tawana, to focus their attention on the ramp up of production and further discovery at the Bald Hill project which at this point remains only 5% explored.
15% of the shares in the new Company will be retained by Tawana Resources and 85% will be passed to the existing Shareholders by way of in-specie distribution. A decision to seek ASX listing for the new Company has not yet been reached by the board, and will be considered in due course.
Our Director David Manchee who follows Tawana Resources and the lithium sector very closely, believes that the simplification of the Company structure will pave the way for Tawana to merge with the Bald Hill project’s Singaporean joint venture partner, just as Galaxy Resources did with General Mining.
We see this as a clear vote of confidence by the board in the value of the Bald Hill project and expect the concentrated focus of management post spin-off to create additional value for shareholders.
A copy of the announcement can be downloaded here.