Metalstech Ltd (ASX: MTC) shares are gaining today on news the company has completed the sale of its lithium royalties to North American company, Lithium Royalty Corp (LRC).
At the time of writing, the Metalstech share price is trading 13.04% higher than yesterday's close at 26 cents. However, earlier today, the company's shares jumped by more than 17% before partially retreating.
Let's take a look at what the deal will mean for the lithium, cobalt, and future gold producer.
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Metalstech share price gets a boost
More funds in the bank
The Metalstech share price is well in the green on Wednesday after the company reported it has sold 4% of its lithium royalties to Lithium Royalty Corp in exchange for $6.65 million.
Following the sale, Metalstech has $6.8 million in its coffers and can begin funding the exploration and development of its Sturec Gold Mine.
Strurec is ready for phase II of drilling and an acceleration of scoping study works is set to begin shortly.
The mine is located in Slovakia and has historically produced over $3.4 billion worth of gold and silver. That figure was adjusted for today's metal prices.
Update on Metalstech's spin off
Additionally, Metalstech's plan to spin off its lithium assets into an ASX-listed entity is continuing to progress.
The company plans for its spin-off entity to be named Winsome Resources and has reserved the ASX ticker code WR1.
$9 million worth of Winsome shares will be issued for 20 cents each as part of its initial public offering (IPO).
Metalstech originally hoped to raise between $5 million and $8 million in the IPO. That amount has since increased to between $12 million and $18 million.
The company's plan is that each holder of 3.4 Metalstech shares will receive 1 share of Winsome.
LRC will also be taking part in Winsome's IPO, subscribing to $3 million worth of shares.
A shareholder notice meeting for the spin off is expected to be finalised in the coming weeks.
Metalstech share price snapshot
2021 has been a good year so far for the Metalstech share price on the ASX.
Metalstech shares are currently trading around 29% higher than they were at the beginning of the year. They have also gained more than 100% since this time last year.
The company has a market capitalisation of around $41 million, with approximately 153 million shares outstanding.
