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Andre Labuschagne. Picture: Frances Pratt/Kalgoorlie Miner.
Andre Labuschagne. Picture: Frances Pratt/Kalgoorlie Miner.

Straits Resources has announced the demerger of its gold and copper assets to create two distinct ASX-listed entities.

The company expects to return shares in the newly created gold entity would be returned to shareholders in an in specie capital return.

Straits Resources managing director Andre Labuschagne said the board's decision was a significant stepforward in the company's plan to unlock the potential value of the gold and copper businesses.

"There is still further work to be undertaken to stabilise the performance of both mines however I am excited by the exploration potential around these mines and the opportunities this may provide to extend mine lives or increase production," he said.

The demerger will be subject to shareholder approval and is expected to take up to four months to complete.

Straits own the Tritton copper mine in New South Wales and the Mt Muro gold mine in Indonesia.

The company also today lowered its full-year production guidance from both operations.

Mr Labuschagne said there remained "a significant amount of work to do before we can say that the company has turned the corner".

"I can assure shareholders that we are leaving no stone unturned as we look to improve performance," he said.

Straits shares were up 0.1 cent, or 1.3 per cent, to 7.8 cents shortly before the close of trade.