Horizon Minerals is clearing a path towards a potential spin-off of its Richmond-Julia Creek Vanadium oxide project 400 kilometres east of Mt Isa in northwest Queensland. A process deed has been signed with joint venture partner, unlisted-Richmond Vanadium Technology or “RVT”, whereby Horizon’s 25 per cent interest in the Richmond-Julia Creek vanadium project will be demerged into a dedicated vanadium focussed IPO.
Horizon says the plan offers a potentially valuable opportunity with both companies progressing the transaction that is anticipated to restructure respective ownership interests into a dedicated incorporated vehicle holding 100 per cent of the Richmond-Julia Creek vanadium project. The share split will initially consist of a 25 per cent Horizon holding and a 75 per cent RVT holding distributed amongst its existing shareholders as a priority allocation ahead of any new investors who may want to participate in the IPO.
The IPO is expected to include the establishment of a high-quality board and executive team for the new investment vehicle.
Under the terms of the proposed deal, existing Horizon shareholders will be offered a proportional, or in-specie allocation into the new investment vehicle.
Transaction documents are expected to be completed in the March quarter 2022 with an ASX listing expected in the subsequent June quarter 2022.
The Richmond-Julia Creek vanadium oxide project houses a massive 1.8 billion tonnes and includes the advanced stage Lilyvale deposit that is progressing towards a definitive feasibility study. The definitive feasibility study is geared to go ahead in the second half of 2022 and has already received significant interest from potential offtake partners.
The company says the Lilyvale deposit is capable of producing globally significant supplies of 98 per cent vanadium to both the steel and emerging green energy storage markets.
Horizon entered a strategic JV with RVT in 2016 that covered the Richmond-Julia Creek vanadium project tenure. Following an initial earn-in period completed by RVT in March 2018, RVT then committed to its agreed expenditure requirements over the next three years, including a pre-feasibility study that afforded RVT a 75 per cent interest in the project with Horizon retaining a 25 per cent interest.
RVT says the pre-feasibility study which focussed on the Lilyvale deposit yielded strong economic results. Extensive metallurgical test work and a complete processing workflow design was included in the detailed pre-feasibility study.
Future development of the Richmond-Julia Creek project is underpinned by shallow and continuous mineralisation, a long projected mine life, modest upfront capital costs and attractive forecasted financial returns.
Vanadium is considered a hot commodity in the current economic climate listed as a critical mineral by the Australian and United States governments. The positive outlook for vanadium is backed by a growing requirement for vanadium redox flow batteries that have many advantages over alternative electricity storage methods in large grid or off-grid settings.
By demerging the Richmond-Julia Creek vanadium deposit into a separate IPO vehicle with dedicated funding and board members, Horizon believes it can achieve a far greater commercial outcome for shareholders. The demerger also allows Horizon to focus 100 per cent of its efforts on its advanced stage WA gold assets.
Horizon Minerals Managing Director, Jon Price said:
“The Richmond – Julia Creek oxide vanadium project is a world class asset with the strategic review clearly demonstrating greater potential shareholder value by demerging the Company’s 25% interest into a dedicated vehicle with devoted technical, human and financial resources that the project deserves as it advances to DFS level in 2022.”
With demand for vanadium increasing steadily, Horizon’s strategic spin-out will allow exposure to the booming market whilst keeping laser focussed on its prospective WA gold assets.
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By Matt Birney
