ONTARIO, TORONTO: Hochschild Mining PLC announced its intention to demerge shares representing 80% of the entire issued share capital of Aclara Resources Inc., its indirect wholly-owned subsidiary.
As well as demerging Aclara from the group, Aclara will seek to have listed on the Toronto Stock Exchange (TSX) its entire issued share capital. The demerger is expected to be completed by year-end.
Aclara is a development-stage rare earth mineral resources company with a strategic land package of mineral concessions in Chile. Aclara is initiating the development of its resources through a project called the Penco Module, formerly known as Biolantanidos, which covers a surface area of approximately 600 hectares and contains ionic clays that are rich in rare earth elements (REE).
Aclara is currently focused on the development and on the future construction and operation of Penco, which will aim to produce a rare earth concentrate through a processing plant that will be fed by clays from nearby deposits.
Following the Demerger, Hochschild Mining Holdings Limited (a wholly-owned subsidiary of the Company) will retain 20% of the Aclara Shares.
In connection with the Demerger, Aclara intends to conduct a concurrent initial public offering of the Aclara Shares to raise additional funds to advance its exploration and development activities and for working capital and general corporate purposes. Aclara has applied to have the Aclara Shares listed on the TSX.
Listing is subject to the approval of the TSX in accordance with its original listing requirements. The TSX has not conditionally approved Aclara’s listing application and there is no assurance that the TSX will approve the listing application.
The Demerger is conditional on certain requirements being satisfied. Assuming such conditions are satisfied, the Demerger will be effected by the Company distributing Aclara Shares representing 80% of the entire issued share capital of Aclara to shareholders of the Company by way of a distribution in specie.
Although the process relating to the Aclara IPO and Listing is currently at an early stage, the Company has decided to proceed with obtaining approval from Shareholders for the Demerger Dividend, which will be required in order for the Demerger and the Aclara IPO and Listing to proceed.
Eduardo Hochschild, Chairman said: “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. Each 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.”
The Company expects to post a Circular and Notice of Extraordinary General Meeting to Shareholders later today. Once the Company has posted these documents to Shareholders, the Company will make a further announcement via a Regulatory Information Service. These documents will also be made available on the Company’s website at: