stb to spin off gold, base metals listed asx

South Boulder Mines to spin off gold, base metals listed ASX vehicle

Friday, October 19, 2012 by Proactive Investors


A new company, Duketon Mining will house non core assets of South Boulder's to be listed on the ASX. Shareholders in South Boulder will gain shares in the vehicle. This plan by Lorry Hughes neatly unlocks value and focuses South Boulder on its massive, fast developing Colluli potash project. A new company, Duketon Mining will house non core assets of South Boulder's to be listed on the ASX. Shareholders in South Boulder will gain shares in the vehicle. This plan by Lorry Hughes neatly unlocks value and focuses South Boulder on its massive, fast developing Colluli potash project.



South Boulder Mines (ASX: STB) will unlock and add more value to shareholders with a plan to demerge non core assets into a separately listed ASX vehicle.

The new company will be known as Duketon Mining Limited. The vehicle will also house some listed investments.

Shareholders in South Boulder will gain shares in Duketon through an in specie distribution of 100% of the shares in Duketon to shareholders of South Boulder on a one for four basis.

This will involve about 31 million Duketon shares to be issued.

Background

South Boulder owns 100% of the gold and base metals rights in the Duketon Project, located within the well-known Achaean Duketon Greenstone Belt, which also contains Regis Resources NL’s (ASX:RRL) Moolart Well Gold Project.

The company’s key Duketon Gold Prospects are the Terminator Gold Prospect and Thomson’s Bore Gold Prospect with numerous prospective targets to follow up on in the future.

The company holds ground in along strike and adjacent positions to the Garden Well Mine development and the producing Moolart Well Gold Mine, with combined resources of approximately 4.7Moz.

Independence Group NL will be entitled to 70% of the nickel rights relating to the selected tenements subject to the Duketon Nickel Joint Venture entered into in 2004.

The new Duketon board will then be uniquely placed to focus on further development of the non-potash assets and will be able to consider future fundraising opportunities to supplement working capital for exploration programs.

The Company owns 100% interest in the following exploration licenses and exploration license applications:

- Lake Lefroy Project; and,

- Cutters Luck Project

The company also owns minority interests in the following exploration projects:

- Cardabia Project (20%);

- Pilgangoora Project (10%); and

- Georgina Basin Project (10%).

South Boulder has applied for exploration licences applications for the Lake Disappointment, Lake Burnside and Diorite Hill Projects in WA. All tenements for these projects are presently under application.

Analysis

Lorry Hughes is maximising and creating further value for South Boulder Mines shareholders ensuring that the Colluli potash project is the main focus. Proactive Investors considers South Boulder Mines to be significantly under-valued on a number of metrics and the share price retreat to be overdone.

We believe a share price closer to $1.30 is achievable in the next six months. Under Hughes, there has been significant value add at Coluli for shareholders, yet the market valuation is lower now than before it had achieved considerable milestones.


http://www.proactiveinvestors.com.au/companies/news/34696/south-boulder-mines-to-spin-off-gold-base-metals-listed-asx-vehicle--34696.html