Cruz Battery Metals: Unlocking Value Through Hector Property Spin-Out

Cruz Battery Metals Corp. (CSE: CRUZ) (OTC Pink: BKTPF) (FSE: A3CWU7) has announced an update on its proposed spin-out of the Hector Silver-Cobalt Project (the "Hector Property") by way of a plan of arrangement. The anticipated closing date for the spin-out is December 23, 2024, with shareholders holding common shares of Cruz as of 12:01 a.m. on that date set to receive their pro rata portion of the Makenita Spinout Shares. This strategic move aims to unlock value for shareholders and focus Cruz's efforts on its core US Properties.

The Hector Property, consisting of 126 contiguous unpatented mineral claims totaling 2,243 hectares, will be transferred to Makenita Resources Inc., a newly formed subsidiary of Cruz. Makenita will become a separate unlisted "reporting issuer" in British Columbia, Alberta, and Ontario, with the Hector Property serving as its material property. This spin-out allows Cruz to concentrate on its Nevada lithium projects, the Solar Lithium Project, and the Clayton Valley Lithium Project, as well as the Idaho Cobalt Belt Project.

The spin-out of the Hector Property presents an opportunity for Cruz to refocus its efforts and resources on its core lithium projects, which align with the growing demand for critical minerals in the global energy transition and electric vehicle market. By divesting the Hector Property, Cruz reduces its exposure to silver and cobalt, enabling it to concentrate on the high-demand lithium market. This strategic move could lead to improved financial performance in the short term, as Cruz can allocate resources more effectively to its core projects. In the long term, the spin-out may create shareholder value by unlocking the potential of the Hector Property under Makenita's management, while Cruz benefits from the spin-out's proceeds and the growth of its lithium projects.



The renaming and re-designation of Cruz's common shares to New Cruz Shares and the creation of Makenita Spinout Shares may initially cause market uncertainty, potentially leading to a temporary dip in valuation. However, this strategic move allows Cruz to focus on its core US Properties and lithium projects, while Makenita concentrates on the Hector Silver-Cobalt Project. This specialization could enhance both companies' market perception and long-term valuation, as investors recognize the potential of each entity's unique focus.

In conclusion, Cruz Battery Metals' proposed spin-out of the Hector Property by way of a plan of arrangement is a strategic move that aims to unlock value for shareholders and focus Cruz's efforts on its core US Properties. By divesting the Hector Property, Cruz can allocate resources more effectively to its lithium projects, potentially enhancing its financial performance and creating shareholder value in the long term. As Cruz and Makenita focus on their respective core competencies, both entities stand to benefit from this strategic move.