Sheffield Resources Ltd. intends to demerge its portfolio of gold and base metal assets held by its subsidiary Carawine Resources Ltd. and create a spinoff company.

Carawine Resources will also undertake an IPO in a bid to list on the ASX, according to an Oct. 19 release.

The offering is expected to raise between A$5 million and A$7 million, comprising between 25 million and 35 million shares priced at 20 Australian cents apiece, with 1 free attaching loyalty option to be issued for every 3 Carawine shares. Patersons Securities Ltd. will act as sole lead manager of the IPO.

The subsidiary's assets comprise the Jamieson gold-copper-silver-zinc project, the Oakover copper-cobalt project, the Paterson copper-cobalt-gold project and the Fraser Range nickel-copper-cobalt-gold project, all in Australia.

Sheffield will distribute the 20 million shares it holds in Carawine in specie to eligible shareholders on a pro rata basis, subject to Sheffield shareholder approval and Carawine being admitted to the ASX, with shareholders expected to receive 1 Carawine share for every 9 Sheffield shares held.

The company will seek shareholder approval for the demerger at its annual general meeting scheduled for Nov. 22.

The planned demerger is part of Sheffield's strategy to focus on the Thunderbird heavy mineral sands project, which forms part of its Dampier property in Western Australia. The company recently announced a US$200 million debt facility for the development.

Carawine, meanwhile, plans to undertake diamond drilling at Jamieson and advance copper-cobalt targets at Oakover to drill-ready status after listing on the ASX.

Sheffield's exploration manager, David Boyd, will take up the managing director role at Carawine. Will Burbury, chairman of Sheffield, will serve as a nonexecutive director on the Carawine board alongside David Archer and Bruce McQuitty, with all three to continue to serve on the Sheffield board.