Foremost Lithium to Spin Out Gold-Silver Assets into New Subsidiary, Rio Grande Resources

Foremost Lithium Resource & Technology (NASDAQ: FMST) has announced plans to spin out its US-based gold and silver assets into a newly incorporated subsidiary named Rio Grande Resources (RGR). This strategic move aims to refocus Foremost Lithium on its core lithium projects while providing dedicated attention to its precious metal holdings.

Why this matters: This strategic move by Foremost Lithium has significant implications for the mining industry, as it allows the company to focus on its core lithium projects while unlocking value for shareholders. The spin-out could lead to increased investment and development in the precious metals sector, potentially driving growth and job creation.

The assets being spun out include the Winston group of properties located in Sierra County, New Mexico. These properties cover a 3,000-acre drill-ready site and consist of three historic past-producing gold and silver mines: Ivanhoe, Emporia, and Little Granite. Foremost Lithium's shareholders will receive shares in Rio Grande Resources at a ratio that is yet to be determined.

The spin-out will be executed through a plan of arrangement, subject to various approvals, including those from shareholders, courts, and regulatory bodies. Foremost will retain a significant interest in Rio Grande Resources, with the remaining shares being distributed to Foremost shareholders on a pro-rata basis relative to their holdings.

Jason Barnard, President and CEO of Foremost Lithium, commented on the strategic move, stating, "The Winston Group of Properties has yet to realize its full value, and this plan of arrangement will offer the time and attention the property deserves." He added, "These past-producing gold and silver mines are within an extremely favorable geological environment, and with gold recently hitting over $2,400 an ounce, we also find ourselves in a favorable precious metals market."

The Winston Property comprises 147 unpatented lode mining claims and two patented mining claims. Recent samples from the property have shown promising results, including 66.5 grams per tonne (g/t) of gold and 4,610 g/t of silver. The property is located in the Black Range Mountains of Sierra County and is hosted within the Tertiary age Gila Volcanic Complex.

Geologically, the main structure of the Winston Property is the 25km long Paymaster Fault, which has been readily traced on the ground and through satellite LiDAR methods. The style of mineralization is characteristic of a Low Sulphidation Epithermal Vein System, which accounts for a significant portion of global precious metals production.

Following the announcement, Foremost Lithium's shares rose 2.1% on the Nasdaq. The spin-out is expected to realize significant value for shareholders by capitalizing on favorable market conditions for precious metals and providing a dedicated focus on the development of the Winston properties.

Foremost Lithium's decision to spin out its gold and silver assets into Rio Grande Resources reflects a strategic move to enhance shareholder value and focus on its core lithium projects. The Winston group's promising geological features and past-producing mines present substantial potential for future exploration and development.

Key Takeaways

• Foremost Lithium to spin out US-based gold and silver assets into Rio Grande Resources.
• Move aims to refocus on core lithium projects and unlock value for shareholders.
• Winston group of properties in New Mexico to be spun out, including 3 historic mines.
• Spin-out to be executed through a plan of arrangement, subject to approvals.
• Foremost Lithium's shares rose 2.1% on Nasdaq following the announcement.