Advance Metals and Sky Metals plan new gold explorer with $6 million IPO

Five gold projects move toward a dedicated listing

Advance Metals Limited (ASX:AVM) and Sky Metals Limited (ASX:SKY) have proposed a new gold explorer that would bring together more than 2,000 square kilometres of exploration tenure across Victoria and New South Wales. The proposed NewCo would combine Advance’s Myrtleford and Beaufort projects with Sky Metals’ Cullarin, Kangiara and Caledonian projects, then seek an ASX listing in the first half of 2027.

The structure gives the two existing companies a way to retain exposure to the contributed assets rather than selling them for cash. Advance would receive 30 million NewCo shares, valued for the transaction at $6 million, while Sky Metals would receive 15 million shares valued at $3 million. On the indicative capital structure, those holdings would represent about 37.5% and 18.75% respectively at listing.

NewCo targets $6 million IPO

NewCo plans to raise a further $6 million through an IPO priced at $0.20 per share. That would involve 30 million new shares, with up to $3 million of the offer expected to be reserved for eligible AVM and SKY shareholders. Seed investors are also expected to hold 5 million shares, leaving the proposed vehicle with 80 million shares on issue at listing, although the company stressed the structure is indicative only.

The proposed spin-out follows Advance’s move toward ownership of the Victorian projects, including Myrtleford and Beaufort, which was covered in the Victorian gold ownership move. Under the new transaction, NewCo would acquire Advance’s interest through the novation of its agreement to acquire E79 Resources, while Sky Metals would transfer its projects through the sale of its subsidiary Aurum Metals.

Exploration appeal comes with verification caveats

The portfolio includes Advance’s Happy Valley gold discovery at Myrtleford, where the company says drilling and a three-dimensional geological model have identified three gold-bearing quartz veins extending to at least 500 metres below surface. Sky Metals’ assets include the Hume gold discovery at Cullarin and the historic Kangiara mine, with the company also pointing to gold, copper, zinc and silver mineralisation and up to 20 kilometres of strike potential.

Those geological claims carry an important qualification. The exploration information relating to Cullarin and Kangiara was extracted from earlier Sky Metals and third-party announcements and has not been independently verified by Advance Metals. The proposed NewCo would therefore be asking new investors to assess a mixed portfolio whose assets are at different stages of exploration and whose value remains dependent on further work.

Non-binding deal faces a long list of conditions

The term sheet is non-binding apart from customary exclusivity and confidentiality provisions. Completion requires satisfactory due diligence, formal transaction documents, shareholder and regulatory approvals, third-party and vendor consents, ASX approval for NewCo’s admission, and receipt of the IPO’s minimum $6 million subscription. The parties are aiming to satisfy the conditions by March 2027, or a later date they agree.

Advance and Sky Metals have not yet settled the new company’s full leadership team. The proposed board would include an independent chair, a chief executive or managing director, an Advance-nominated director and a Sky-nominated director. The shares issued to the two parent companies are expected to be escrowed for 24 months after listing, adding a degree of post-listing alignment but also limiting their immediate liquidity.