Orefinders to spin off battery metals assets into newco

Orefinders Resources Inc. [ORX-TSXV, OTC-ORFD] said Tuesday January 30 that its plans to spin out a pure play battery metals public company that will initially consist of its Mann Mines silver and cobalt properties the Cobalt-Gowganda region of northeast Ontario.

While Orefinders is a gold-focused company, it happens to own one of the most prospective silver and cobalt assets in what is a very hot district due to the demand for battery and energy storage metals, the company said in a press release, Tuesday.

“Our plan is to create a new public company with the Mann as its initial flagship asset and with some of the shares of this company being distributed to our Orefinders shareholders,” the company said. “The new company will act as an acquisition and development vehicle for Abitibi battery metal projects.”

Orefinders shares were unchanged at 12 cents on the TSX Venture Exchange where they trade in a 52-week range of 17 cents and $0.035 cents.

The Mann Mines are silver and cobalt properties located within the Cobalt-Gowganda region west of Lake Teminskaming and the town of Haileybury, part of Temiskaming Shores.  The properties host nine historic shafts and a ramp that was driven to the 210-foot level. The former Mann Mine, along with other adjacent prospects, reported produced nearly 500,000 ounces of silver, Orefinders said.

Orefinders said it views the Mann Project as a highly promising advanced development project which is drill ready for future work.

The company hopes to realize significant value for its shareholders from the Mann Project and additional assets which the new company would acquire to complement its battery metals portfolio.

News of the spinout plan comes just days after Orefinders released a positive preliminary economic assessment (PEA) for a proposed open pit operation at its Mirado Gold Mine near Kirkland Lake, Ontario. The Mirado gold project is situated within the Abitibi Gold District, which has historically produced more than 150 million ounces of gold over the past century. Historic production from the Kirkland Lake camp amounts to 25 million ounces.

According to the PEA, the proposed South Zone Open Pit will deliver a 158% after-tax Internal Rate of Return and payback on capital invested within seven months.

The Mirado gold property covers 2,460 hectares. However, Orefinders is contemplating production from an area encompassing only 5% of the project.

“The initial production expenditure is estimated at $2.4 million to achieve first production from the open pit,” the company said in a press release.

The company is planning to use cash flow generated from production in the South Zone open pit to develop what it sees as the true upside potential of the broader Mirado Project as well as other assets in its portfolio.