The Cowan, Yallari and Mofe Creek projects will be transferred into a new public company, and the process will be accompanied by a capital reduction.

 

Tawana's shareholders will benefit from an in‐specie distribution of 85% of the new company, leaving Tawana with a 15% stake.

 

Tawana managing director Mark Calderwood said following the recent commissioning and first spodumene concentrate production at Bald Hill, the company's primary focus was to ensure effective ramp‐up of production and to ensure exploration activities are focused "near mine" to drive growth in mineable reserves and extend associated mine life at Bald Hill of which the company has explored less than 5% of the known prospective area. 

 

That would mean its other assets were "unlikely to garner the appropriate management focus and budgetary allocation which they warrant and require for short term advancement".

 

The new vehicle will still be a lithium player, with both the 100% owned Cowan and Yallari projects in WA.

 

Cowan is adjacent to the Bald Hill mine, while Yallari is in the same greenstone sequence that hosts the Mt Marion and Londonderry pegmatite fields.

 

The Cowan project covers a 26km strike of two rare earth pegmatite belts over 721sq.km outside Kambalda that have seen little exploration, but is known to host a "vast number of pegmatites" that have been discovered through limited exploration mapping and drilling, some of which contain spodumene.

 

The "moderately prospective" Yallari is just 6km west from Mineral Resources' Mt Marion lithium mine and 75km northwest of Cowan project. It contains the same rock sequences, but is unexplored for lithium. 

 

The black sheep is the legacy Mofe Creek iron ore project in one of Liberia historic iron ore mining districts. 

 

The project is 10km along strike from the abandoned high-grade Bomi Hills mine and within 100km of three larger but lower grade mines.

 

Tawana believes Mofe Creek can produce a 63-68% iron ore product, the kind in demand from buyers, from a low-cost operation that will benefit from proximity to the coast, low mine stripping ratios and free‐dig material.

 

The greenfields discovery has an exploration target of 95 million tonnes within a 500Mt-plus global target. A scoping study has assessed a 14-year initial mine life with a production target of 2.5Mtpa

 

Assuming shareholders approve the proposal at meeting in May Tawana hopes to have the spin-out process completed by June.

 

Tawana shares last traded at A44.5c, valuing the company at $225 million.