Alkane will aim to seek shareholder approval for the demerger in early July, with ASM targeting a listing by mid-July.
"The turbulence experienced in global equity markets in March and April has abated to the extent that the Alkane board has decided the time is right to make the final preparations to demerge and list ASM in the coming months, subject to shareholder approval," Alkane chairman Ian Gandel said.
Alkane has been preparing ASM for a listing for much of this financial year, with former Superior Lake Resources CEO David Woodall appointed as managing director in February.
Gandel said Woodall and the ASM team, which includes Steve Messiter as chief operating officer, Alister Macdonald as general manager, marketing, and NSW GM Mike Sutherland, had brought new focus, momentum and opportunity to the project.
The Dubbo project has a resource of 75.18 million tonnes at 1.89% zirconium, 0.04% hafnium, 0.44% niobium and 0.9% total rare earth oxides.
Dubbo has capital costs of A$1.3 billion, based on a 1 million tonne per annum base case operation.
Under that scenario, the project has an internal rate of return of 17.5% and net present value of $1.24 billion.
Alkane has also identified the potential for a 500,000 tonne per annum start-up project with capital costs of $808 million.
Dubbo is expected to have a mine life of more than 75 years and is fully permitted.
In March, the Australian government-owned Export Finance Australia (EFA) confirmed interest in financing Dubbo, as part of the initiatives under the Critical Minerals Facilitation Office.
ASM is also currently building a pilot plant facility in South Korea in joint venture with ZironTech.
The demerger will take place via a distribution to Alkane shareholders of one ASM share for every five Alkane shares held.
Alkane will have no ownership in the new company.
ASM will list with $20 million and no debt.
"The demerger of ASM will provide investors two opportunities to grow value; in Alkane as a growing gold exploration, development and production company, and in ASM as an exciting critical materials business leveraged to the changing world economy," Gandel said.
Alkane owns the Tomingley gold mine and exciting Boda copper-gold discovery, both in NSW.
Shares in Alkane closed 8.5% higher at 82.5c.
