Delta Lithium Limited is set to unlock value by spinning out its Mt Ida Gold asset into a new ASX-listed company, Ballard Mining Limited, through a demerger and a $25-30 million IPO. This strategic move separates its gold and lithium businesses, positioning both for focused growth.
- Mt Ida Gold asset to be demerged into Ballard Mining Limited
- Ballard to raise $25-30 million via IPO at $0.25 per share
- Delta shareholders receive Ballard shares via in-specie distribution
- Experienced leadership team appointed for Ballard, including Simon Lill
- Delta retains substantial equity stake in Ballard post-listing
Strategic Spin-Out to Unlock Value
Delta Lithium Limited (ASX: DLI) has announced a significant corporate restructuring with the planned demerger of its Mt Ida Gold asset into a newly formed, standalone gold exploration company, Ballard Mining Limited. This move, subject to shareholder and ASX approval, aims to unlock the latent value of the Mt Ida Gold project by separating it from Delta's lithium assets, allowing each entity to focus on their respective commodities.
The demerger will be executed via an in-specie distribution, where eligible Delta shareholders will receive one Ballard share for every 11.25 Delta shares held. Concurrently, Ballard will undertake an initial public offering (IPO) to raise between $25 million and $30 million, priced at $0.25 per share, to fund exploration and development activities at Mt Ida.
Robust Resource Base and Growth Potential
The Mt Ida Gold Project boasts an updated Mineral Resource Estimate of 10.3 million tonnes at 3.33 grams per tonne gold, equating to approximately 1.1 million ounces of gold. This substantial resource underpins Ballard’s growth ambitions, with plans to advance drilling programs targeting regional growth and infill at the Baldock deposit to support definitive feasibility studies.
Ballard’s name pays homage to Lake Ballard, a local landmark near the project, symbolizing its deep connection to the region. The project’s scale and quality have prompted Delta to position Ballard as a pure gold company, better equipped to attract dedicated capital and expertise.
Experienced Leadership to Drive Ballard’s Success
Ballard’s board features seasoned industry veterans, including former De Grey Mining Chairman Simon Lill as Non-Executive Chairman. Mr. Lill brings a track record of overseeing one of Australia’s largest gold discoveries and navigating a multibillion-dollar takeover. Other key appointments include Paul Brennan as Managing Director, Tim Manners as Finance Director, and Stuart Mathews as Non-Executive Director, all bringing extensive mining and corporate experience.
Delta’s Managing Director, James Croser, will transition to a Non-Executive Director role on Ballard’s board, ensuring continuity and a smooth handover of the Mt Ida asset. This leadership team is well-positioned to capitalize on the project’s exploration upside and deliver shareholder value.
Implications for Delta and Shareholders
Post-demerger and IPO, Delta will retain a significant equity stake in Ballard, approximately 49% at the minimum subscription level, allowing shareholders to maintain exposure to the gold asset’s upside while Delta concentrates on its lithium projects at Mt Ida and Yinnetharra. The separation is expected to enhance strategic focus and unlock value in both commodities.
The transaction is anticipated to complete by early July 2025, following Delta’s shareholder meeting and ASX approvals. Investors will have the opportunity to participate in Ballard’s IPO through a priority offer, further aligning interests.
Delta’s move reflects a broader trend in the mining sector where companies streamline portfolios to sharpen operational focus and attract targeted investment. Ballard’s dedicated capital raise and specialized management team could accelerate the Mt Ida Gold project’s development trajectory.
Bottom Line?
As Ballard prepares for its ASX debut, investors will watch closely to see if the spin-out delivers on its promise to unlock value and accelerate gold exploration.
Questions in the middle?
- Will Ballard’s IPO attract sufficient investor interest amid current gold market conditions?
- How will Ballard prioritize exploration and development spending with the raised capital?
- What impact will the demerger have on Delta’s lithium project funding and timelines?