Shares in Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF) surged in early deals on Tuesday after the company announced plans to demerge its Aclara Resources Inc subsidiary.
Aclara is a development-stage rare earth mineral resources company with a strategic land package of mineral concessions in Chile. Hochschild plans to list 80% of Aclara’s share capital on the Toronto Stock Exchange and to retain a 20% stake in the company.
The demerger is expected to complete by the end of this year.
“This is the logical next step forward for our rare earth business. It is our belief that, as two standalone businesses, both Hochschild and Aclara will have the greatest potential for delivering long-term value creation. Each will have their own strategic focus on their respective products, their own dedicated management teams, separated access to capital and an independent valuation whilst maintaining a strategic relationship that will allow Aclara to benefit from Hochschild’s track record on project execution and ESG [environmental & social governance]. Furthermore, we believe that current and future Hochschild shareholders will also benefit from retaining a meaningful stake in a business that offers an exciting proposition in a high growth market,” said Eduardo Hochschild, the chairman of the company.
Shares in the FTSE 250 miner were up 5.6% at 150.8p.
