ARDEA IPO (spin-out of assets), page-13

Good discussion Red. I have no problem with them biding their time on the Ni/Co assets trying to add value with the Au projects. Negotiating a strategic partner is crucial stage for value addition for a company - negotiate a good deal with strategic partners and the shareholders do extremely well out of it. Do a deal for the sake of getting a deal done while the commodities prices are low and then most of the asset value moves to the strategic partner.
Right now, strategic partners don’t really see it as a immediate risk and therefore there is less interest in doing a deal right now unless it is very much in their favor (i.e less in our favor). 
I have worked at large corporates in the past and in the commodities sector especially money quickly gets thrown around when prices are high and conversely when the prices are low push extremely hard for the best deal for them when prices are low. 

It’s worth remembering that it was always part of their strategy to explore and develop and gold and base metal assets prior to the IPO (i.e this is not a new idea). Then the Ni and Co price exploded and then the focus became developing the Ni/Co project and rightly so. Now it has gone the other way so focusing on the gold & base metals projects until we reach a better price environment conducive to getting a favorable deal.

Btw if we do find a strategic partner for the Ni/Co project they will likely take a JV type ownership structure only in the HPAL project - not gold or base metals etc (however possibly Scandium, HPA and other byproducts of the HPAL process). There may be a share placement component as well where they may have some exposure to upside to any gold finds however this will not be their focus.

ARL have some excellent land holdings where the primary focus has been on Ni/Co laterites historically - to the point where as we know other elements like scandium, alumina and even gold were not assayed for during previous exploration!! Now ARL/Herron have had this land for an extensive period of time, it is surrounded by producing and historical Au mines in the region - it would certainly make a lot of sense to conduct exploration to understand if there is an economic discovery. 

If the exploration is successful and an economic discovery is found depending on the size it could either be mined and sent to a 3rd party processor (of which there are many in the region), JV’d out to a gold a larger gold miner so they can operate/develop it and we have exposure to the project at low cost or spin it out via IPO. All these options give us cash flow that we can potentially use to fund some of the Co/Ni projects

Let’s remember Royal Nickel Corp. in Toronto - until September last year they were very much a Ni explorer/developer that were struggling and had a tiny gold operation in WA. They stuck spectacular grades at the gold operation and they increased 10x and currently 6x where they were before the discovery.

Too early to say whether ARL can replicate anything like that but they are certainly in a good area to make an economic gold discovery and it certainly deserves further exploration.