Horizon Minerals Moves To Demerge And Progress IPO For Richmond-julia Creek Vanadium Project

The demerger pathway for the project is consistent with the company’s strategy of realising value for shareholders from its non-core assets.

Horizon Minerals Ltd - Horizon Minerals progress demerger efforts at Richmond – Julia Creek Vanadium Project.

Horizon Minerals Ltd (ASX:HRZ) has executed a process deed with joint venture partner Richmond Vanadium Technology Pty Ltd (RVT) to progress the demerger, IPO and ASX listing of the Richmond-Julia Creek Vanadium Project in northwest Queensland.

The deed follows a strategic review undertaken by both companies that identified the potential to unlock greater value for shareholders.

By demerging the project into the IPO vehicle with its own funding and dedicated board and executive team, Horizon will focus all of its resources on its advanced Western Australian gold assets — consistent with the company’s strategy of realising value for shareholders from its non-core assets.

“Greater potential shareholder value”

Horizon managing director Jon Price said: “The Richmond-Julia Creek oxide vanadium project is a world-class asset with the strategic review clearly demonstrating greater potential shareholder value by demerging the company’s 25% interest into a dedicated vehicle with devoted technical, human and financial resources that the project deserves as it advances to DFS level in 2022.

“The company is eager to provide existing Horizon shareholders the opportunity to participate in, and realise the inherent long-term value, of this exciting project.

“RVT has done an excellent job to complete several rounds of metallurgical tests leading to a complete processing flow sheet and a positive PFS at a time of significant interest in vanadium as a future green energy storage solution.

“Further details on the transaction will be provided in coming months and we look forward to advancing the project for the benefit of all stakeholders and the local, state and national economies.”

Process deed

Horizon and RVT have entered into a process deed under which they have acknowledged that a restructuring of their interests in, and an IPO of, the project represents their mutually preferred strategic approach to achieve their objectives for the project.

Under the process deed, Horizon and RVT have agreed to progress a transaction currently anticipated to include:

  • The restructuring of the ownership in the project (which at present take the form of interests in an unincorporated joint venture) into an incorporated structure, with 100% of the interests to be held by the IPO vehicle, whose shares will initially be held by Horizon (as to 25%) and the existing shareholders of RVT (as to 75%) in line with current project ownership;
  • Establishment of a dedicated board and focused, experienced executive and management team;
  • An in-specie distribution of a portion of Horizon’s shares in the IPO vehicle to Horizon shareholders; and
  • An IPO of new shares in the IPO vehicle and application to list on the ASX.

Strategic rationale

The Richmond-Julia Creek Project has many favourable attributes supporting a future development including shallow, continuous mineralisation, a long mine life, modest upfront capital costs and attractive forecast financial returns.

The project is in a mature mining region with established infrastructure including a sealed highway, railway network and port.

Vanadium has been declared a critical mineral by the Australian Government and United States Department of Interior and has a positive demand outlook.

Richmond – Julia Creek Vanadium project location and surrounding infrastructure

Next steps

Completion of transaction documents is expected in the March quarter of 2022, enabling the IPO vehicle to seek an ASX listing in the June quarter of 2022

Horizon will also provide further details on the transaction and the timings in the March quarter of 2022.

The Lilyvale deposit is now progressing to DFS and is capable of producing a globally significant supply of 98% vanadium pentoxide product to both the steel and emerging green energy storage markets.

Notably, the completion of the DFS is targeted for the second half of 2022, with significant interest received from potential offtake partners.