Guardian Metal Resources proposes spin-out of non-tungsten Nevada projects

Key Highlights

• Guardian Metal Resources approved in principle a proposed spin-out of non-tungsten Nevada projects.
• The company is targeting an AIM listing for the new entity by the second quarter of 2027.
• No binding agreements are in place, and the plan depends on approvals and market conditions.
• The company also updated terms of Chief Executive Officer Oliver Friesens share options.

Guardian Metal Resources plc (NYSE American: GMTL) (LON: GMET) (OTCQB: GMTLF) said its board has approved in principle a proposed strategic spin-out of its non-tungsten exploration portfolio into a new company, referred to as Spin-Co. The company said it intends to seek admission of Spin-Cos shares to trading on AIM by the second quarter of 2027. The proposed transaction is not yet agreed and remains conditional. Guardian Metal said no binding agreements have been entered into, and the plan is subject to the final structure, regulatory and third-party approvals and consents, final board approval, and market conditions. This article is a journalistic opinion piece which has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice. Guardian Metal said the assets currently expected to form part of Spin-Co include the Garfield, Golconda Summit and Stonewall projects in Nevada, which it described as its non-tungsten projects. The company said the spin-out is intended to sharpen its focus on tungsten development by concentrating management attention and capital allocation on its Pilot Mountain and Tempiute tungsten projects. Under the structure currently envisaged, Guardian Metal said it would transfer the non-tungsten projects to Spin-Co in exchange for newly issued Spin-Co shares, and it expects to retain a significant shareholding. Guardian Metal also said it is not announcing a distribution of Spin-Co shares to its shareholders. In a statement included in the release, Chief Executive Officer Oliver Friesen said, The Pilot Mountain pre-feasibility study has been completed and the definitive feasibility study is well underway, with mine permitting activities progressing in parallel. Guardian Metal said the precise asset perimeter, ownership percentages, valuation, funding arrangements and governance structure have not been finalized. It added that its eventual ownership in Spin-Co would depend in part on any fundraising carried out by Spin-Co. The company also noted the proposed transaction may be a transaction under the AIM Rules for Companies, and said it will assess the proposal against the class tests and comply with any applicable notification, related party and shareholder approval requirements.

Chief Executive Officer option update

Guardian Metal also provided an update on options granted to Chief Executive Officer Oliver Friesen. The company said it was originally intended that an option over 2,104,859 ordinary shares at an exercise price of 10.75p would qualify as enterprise management incentive (EMI) options, but it was later established that the original option did not qualify under applicable UK tax regulations. According to the release, the company determined to grant an EMI option over 181,817 ordinary shares (the maximum number possible up to the statutory 3250,000 individual limit) at an exercise price of 10.75p, extend the exercise period of the original options by five years to 3 May 2031, and indemnify Mr Friesen for the net tax cost arising from the original options not qualifying as EMI options, subject to a cap described in the announcement. The company said its independent directors considered the remuneration arrangements fair and reasonable for shareholders.

The original press release is available on stockhouse.com