19th Oct 2021 09:15
(Alliance News) - Hochschild Mining PLC on Tuesday laid out plans to demerge 80% of Aclara Resources Inc and list it on the Toronto Stock Exchange.
Shares in the midcap gold miner were 6.3% higher in London on Tuesday morning at 151.80 pence each, though they remain down 27% so far in 2021.
"This is the logical next step forward for our rare earth business. It is our belief that, as two standalone businesses, both Hochschild and Aclara will have the greatest potential for delivering long-term value creation," said Chair Eduardo Hochschild.
Hochschild will retain a 20% stake in Aclara.
The miner expects the demerger to be completed by the end of 2021.
Aclara is currently focused on the development and on the future construction and operation of Penco Module in Chile, which will aim to produce a rare earth concentrate through a processing plant that will be fed by clays from nearby deposits.
Chair Hochschild continued: "Each [company] will have their own strategic focus on their respective products, their own dedicated management teams, separated access to capital and an independent valuation whilst maintaining a strategic relationship that will allow Aclara to benefit from Hochschild's track record on project execution and ESG.
"Furthermore, we believe that current and future Hochschild shareholders will also benefit from retaining a meaningful stake in a business that offers an exciting proposition in a high growth market."
Hochschild noted Aclara holds a "unique" position within the company as it focuses on rare earth mineral resources, while the rest of its operations are geared towards precious metals.
"Aclara has continued to be run as an independent business unit within the group. Aclara's primary growth opportunities going forward are expected to be in expanding its rare earth business," the company said.
It added: "After careful consideration by the company, the TSX was selected as the most appropriate venue for listing Aclara due to the depth of the investor base for a business such as Aclara and the relative Canadian familiarity with assets in the Americas. The company recognises that the mineral resources industry is a much larger proportion of the overall market in Canada and that Canadian investors have a history of taking a longer-term approach to mineral resources companies in the development phase where an asset may still be a few years from the commencement of production."
By Paul McGowan; [email protected]
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