Hochschild Mining PLC has announced its intention to demerge shares representing 80% of the entire issued share capital of Aclara Resources Inc., its indirect wholly-owned subsidiary.
As well as demerging from the group, Aclara will seek to have listed on the Toronto Stock Exchange (TSX) its entire issued share capital. The demerger is expected to be completed by year-end.
Aclara is a development-stage rare earth mineral resources company with a strategic land package of mineral concessions in Chile. Aclara is initiating the development of its resources through a project called the Penco Module, formerly known as Biolantanidos, which covers a surface area of approximately 600 ha. and contains ionic clays that are rich in rare earth elements (REE). Aclara is currently focused on the development and on the future construction and operation of Penco, which will aim to produce a rare earth concentrate through a processing plant that will be fed by clays from nearby deposits.
Following the demerger, Hochschild Mining Holdings Ltd (HM Holdings) (a wholly-owned subsidiary of the company) will retain 20% of the Aclara shares.
In connection with the demerger, Aclara intends to conduct a concurrent initial public offering (IPO) of the Aclara Shares, in order to raise additional funds to advance its exploration and development activities, and for working capital and general corporate purposes. Aclara has applied to have the Aclara Shares listed on the TSX. The listing is subject to the approval of the TSX, in accordance with its original listing requirements. The TSX has not conditionally approved Aclara’s listing application and there is no assurance that the TSX will approve the listing application.
The demerger is conditional on certain requirements being satisfied. Assuming such conditions are satisfied, the demerger will be effected by the company distributing Aclara Shares representing 80% of the entire issued share capital of Aclara to shareholders of the company by way of a distribution in specie. Although the process relating to the Aclara IPO and the listing is currently at an early stage, the company has decided to proceed with obtaining approval from shareholders for the demerger dividend, which will be required in order for the demerger and the Aclara IPO and listing to proceed.
Eduardo Hochschild, Chairman, comments:
“This is the logical next step forward for our rare earth business. It is our belief that, as two standalone businesses, both Hochschild and Aclara will have the greatest potential for delivering long-term value creation. Each will have their own strategic focus on their respective products, their own dedicated management teams, separated access to capital and an independent valuation, whilst maintaining a strategic relationship that will allow Aclara to benefit from Hochschild’s track record on project execution and ESG. Furthermore, we believe that current and future Hochschild shareholders will also benefit from retaining a meaningful stake in a business that offers an exciting proposition in a high growth market.”
Read the article online at: https://www.globalminingreview.com/finance-business/19102021/hochschild-to-propose-demerger-and-listing-of-aclara-resources-on-tsx/