Delta Lithium (ASX
LI) has announced it will decouple from its own operations and spin out as an ASX-listed company in its own right Ballard Mining, a gold explorer.
Ballard will then be the vehicle wherein Delta stashes its Mt Ida gold asset, separating it entirely from the genesis lithium company. Delta MD James Croser will sit on Ballard’s board as a NED; former De Grey chair Simon Lill will sit on as NEC.
Paul Brennan will manage Ballard, it’s not immediately clear if that’s the same Paul Brennan who was the former CEO of PolyNovo. All in all, Ballard will be looking to raise between $25M-$30M to kick things off.
Unsurprisingly, Delta will retain a “substantial equity holding” in Ballard – 49%.
The demerger move makes sense when one considers commodity prices. Just look at where lithium is now, compared to gold. It doesn’t take a deep knowledge to figure out the rationale.
“The Demerger enables the Company to continue focusing on its primary business, being the exploration and development of its lithium assets at the Mt Ida Project and the Yinnetharra Lithium Project,” Delta wrote on Thursday.
One is left to wonder why they’d bother, unless Ballard’s gold asset turns up a duster.
And while the company says its main focus is the existing lithium acreage, company chief Croser’s commentary definitely belied more excitement about the gold.
“Delta has been working diligently towards this outcome for some time, and we are delighted to be finally able to announce these details of the Demerger and Ballard IPO,” Croser said.
“Re-setting the exciting and prospective Mt Ida Gold Asset into Ballard, a pure new gold company, at such an opportune time in the gold price cycle best positions Ballard to launch into early success … Momentum is crucial to a new listing and the pricing of the Gold Asset is compelling with significant potential.”
At any rate, the listing of Ballard would also be a relief for IPO-watchers on the ASX, where currently, the upcoming floats webpage shows a single lonely company listing next month after Stormeur withdrew its application.
DLI last traded at 19cps.
Jonathon Davidson
The Market Online, Australia
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