Lefroy Exploration Limited (ASX:LEX) announced on 13 October 2022 that the company is moving through with a demerger/IPO strategy for its wholly owned subsidiary Johnston Lakes Nickel Pty Ltd. (JLN). Under the condition of shareholder and ASX approvals, the focus will primarily be on the targeted listing of JLN in the first half of CY23. According to the company's announcement on ASX, this divestment plan will enable LEX to concentrate on the Lefroy Gold Project, which is southeast of Kalgoorlie and includes the newly discovered Burns gold and copper deposit.

Lefroy has already started resource RC drilling in preparation for a maiden resource statement early in 2023. Additionally, this process will also crystallise the intrinsic value of Lefroy's nickel assets while increasing the value of its gold assets (Burns project) for LEX's shareholders. Lefroy's nickel projects in Western Australia are currently controlled by Johnston Lakes Nickel Ltd. ("JLN"), a wholly owned nickel-focused subsidiary of LEX.

Positive investor confidence in the nickel market prompted LEX to consider measures to increase recognition of the value of its nickel assets. Therefore, the company decided to proceed with a demerger and IPO of JLN. Moreover, the demerger of JLN from LEX and listing via IPO (Initial Public Offering) are scheduled to be completed in the first half of CY2023, subject to receipt of shareholder and ASX approvals.

At the beginning of November 2022, the Board and Management team will all be in place. The completion of the required diligence, the creation of the demerger's prospectus, and the application for demerger relief to the ATO are also imminent. A few things like the date of a LEX General Meeting to approve the demerger by the in-specie distribution of JLN shares to LEX shareholders, the entitlement ratio, the record date for LEX shareholder entitlement to the in-specie distribution, and the priority entitlement of LEX shareholders in the IPO will be confirmed by the company over the coming months.

Talking about this progression update, Gordon Gait, Non-Executive Chairman, Lefroy, said, "We are progressing the demerger/IPO for JLN, with a target of completion during H1/23. We have now appointed the Directors, including the Managing Director, so we have a first-class leadership team in place to explore our suite of first-class assets as soon as the demerger/IPO completes".