Orbit sets $12M rare earths spin-off in motion

Orbit Resources has fired the starting gun on a rare earths float for its Matrix Critical Minerals spin-off, which is seeking to raise between $8 million and $12 million to advance a significant project in New South Wales.

Under the offer, Matrix will issue new shares at $0.20 a pop. Eligible Orbit shareholders have been granted a priority offer to apply for up to 10 million of those shares, giving them a chance to participate directly in the new listing. The offer opened this week and is scheduled to close on October 30.

The IPO is designed to separate the company’s Narraburra rare earths project in central-west NSW into a dedicated ASX-listed vehicle, leaving the parent company with a sharpened focus on its gold, silver and copper assets in the State’s prolific Lachlan Fold Belt.

The strategic demerger will provide Matrix with its own capital structure and funding runway to develop the Narraburra project, which already hosts a sizeable mineral resource of 94.9 million tonnes grading 739 parts per million (ppm) total rare earth oxides (TREO). That resource includes a higher-confidence indicated portion of 47.6Mt at a solid 780ppm TREO, with the added attraction of strategically important heavy rare earth elements and yttrium.

‘The proposed listing will provide Matrix with a dedicated platform and capital structure to advance Narraburra.’

Orbit Resources managing director Jeneta Owens

The move comes as Canberra throws its weight behind the sector. The Federal Government recently expanded its Critical Minerals Facility to a hefty $5 billion and established a $1.2 billion strategic reserve to secure domestic supply. Working alongside the United States, Australia has already seen funding committed to major Australian projects. The broader sector has also seen a flurry of corporate activity, with Lynas Rare Earths recently moving to acquire Meteoric Resources in a deal valued at about $672 million.

Orbit Resources managing director Jeneta Owens said: “The proposed listing will provide Matrix with a dedicated platform and capital structure to advance Narraburra, while allowing Orbit to concentrate its resources and exploration activities on Lewis Ponds and our broader gold, silver and copper portfolio.”

With Matrix set to tackle Narraburra, Orbit will double down on its Lachlan Fold Belt portfolio, which is no small prize. It is anchored by the advanced Lewis Ponds gold-silver project just 15 kilometres east of Orange, which hosts a formidable JORC-compliant resource of 17.52 million tonnes grading 1.12 grams per tonne (g/t) gold, 53.34g/t silver, 2.06 per cent zinc, 1.10 per cent lead and 0.14 per cent copper. This equates to a combined 1.7 million ounces of gold equivalent, including an impressive 630,000 ounces of gold and 30.1 million ounces of silver.

Recent drilling at Lewis Ponds returned visual hits of broad sulphide zones, including a 12.9-metre zone containing 20 per cent semi-massive sulphides, reinforcing management’s geological model, suggesting there’s more to find.

Notably, another hole drilled earlier this year hit the Quarry Lode, a zone of mineralisation sitting outside Lewis Ponds current resource boundary, with an intercept of 27 metres at 0.97g/t gold equivalent from 83m. The company believes bringing the Quarry Lode into the inventory could increase the project’s scale and support future mining studies.

Beyond its flagship Lewis Ponds project, Orbit holds a deep pipeline of prospects across more than 2500 square kilometres of tenure, including the Mt Aubrey project with its 62,400-ounce gold resource and the Copper Hill East porphyry target, which sits just 10km from a known 280,000-tonne copper and 750,000-ounce gold deposit.

Additionally, the company’s Cousin Jack prospect recently landed a discovery, jagging two broad sulphide zones: 79m at 1.3 per cent zinc equivalent and a hefty 104m grading 1.3 per cent zinc equivalent. Those hits also featured a higher-grade 1.7-metre intercept grading an eye-catching 13.1 per cent zinc equivalent.

The Matrix float is subject to several conditions, including ASX approval for Matrix’s admission and the company raising its minimum subscription target.

With two distinct companies, each with a clear focus, Orbit is creating one vehicle to chase gold and copper in a world-class minerals belt and another to ride the wave of government and industry support for the critical minerals that will power the future. For followers of the rare earths space, Matrix’s timing may prove particularly fortuitous.

Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au