ARDEA IPO (spin-out of assets), page-18

Some further background which might help Ardea shareholders understand what might be the likely outcomes of its extensive landholding assets combined with both, the known and unknown minerals contained in W.A.

The founder of Heron Resources has a track record of IPO's or spin- off's with he (Ian Buchhorn) having been involved in 5 or 6 (including Ardea itself) with the most successful being Avoca Gold which speedily went from a listing price of .20 cents to more than $2.00 in approximately 12 - 15 months and which was then the subject of a merger then takeover.
Another interesting aspect that comes to mind was that among all its assets and minerals, Heron was holding a rich high grade Iron Ore deposit which it knew it could never develop.
Under Buchhorn's directorship he and the then Heron board decided to pass on the ownership of this I.O. deposit to a company by the name of Polaris Metals in exchange for Polaris shares.
From memory Heron received 40 or 50 million shares in POL and Heron holders also received free shares.
Polaris was taken over by Mineral Resources Limited (MIN) after a lengthy battle with a Malaysian company Lion Ore?
As a result of the takeover by MIN and due to the uncertainty of the global financial crisis at the time, Heron made a decision to sell its shares and to crystallise the asset.
It went searching for buying opportunities that might exist as a result of the GFC.
After all, the bottom had fallen out of nickel prices and of course, present cobalt at the time was of no importance and as a result the Kalgoorlie Nickel Project was put on the back burner.

Heron merged with a zinc exploration company and today under the Heron name are an emerging zinc producer at Woodlawn in N.S.W. The other N.S.W. tenements now held by Ardea and subject of a planned ipo in 2019 are (i believe) attributable to Buchhorn's exploration.
While Heron itself seems to have performed very poorly so far for a company nearing production of zinc, I believe it was somewhat a really bad idea on the part of Heron's board which seemed to totally dismiss the value or future value of what are now Ardea assets.
One might understand that with nickel prices down from hefty heights most of the board would consider the nickel as "useless" and take no notice or real interest in the other minerals and in particular gold.

The rest is history and as a past long term Heron holder, I am forever grateful for Ian Buchhorn's persistence in giving something back to Heron shareholders and in getting the Heron board to agree to a spin off and Ian Buchhorn forming Ardea.
I also believe that some that perhaps thought these assets as useless were some of the first to sell their Ardea entitlement on day one and two at between .19 & .22 cents. That certainly tells me something.

I believe the following that you mentioned is more than valid in this case:

That Heron believed
"A recognition that it was likely to remain undeveloped while under the existing Heron structure."
- A recognition that these assets geographically would be a massive resources challenge.
- A recognition that development would be an extreme financial undertaking.
- 100% focussed on zinc.
After all, Heron made it clear they were only interested in zinc and the Woodlawn project and no money would be spent on any other exploration apart from Woodlawn.

In may opinion Ian Buchhorn more than likely believed:

- To release locked up value to shareholders.
- A recognition that a valuable asset was not being developed.
-A recognition that it was likely to remain undeveloped while under the existing Heron structure.
- A recognition that the resources were too strategically valuable to be ignored.

Don't get me wrong as i believe the rest of the Ardea team have all done their bit to get us to this point however, Ian Buchhorn who himself discovered many of these assets is not just going to quit it all without obtaining Ardea shareholders the maximum benefit.

So as far as the W.A. gold prospects are concerned, we shareholders can be certain that Ardea will derive maximum benefit for its shareholders.
Be it by one or two more spin off's in W.A. assets then that would not surprise and perhaps even a spin - off of some other metals, such as scandium, nickel sulphides, alumina etc, etc.
It is in Ian Buchhorn's DNA to derive maximum benefit for we shareholders.

I might seem to be going on about it but we should not forget that the major shareholder in our company will always do what is best for shareholders and of course, himself.