Foremost Lithium Resource & Technology has announced plans to spin out its gold and silver assets in New Mexico, US, into a new subsidiary named Rio Grande Resources (RGR).

This new subsidiary will hold the company's Winston Group of Properties, which includes three past-producing mines over a 3,000-acre site in Sierra County, New Mexico.

The spin-out is set to be executed through a plan of arrangement.

Foremost Lithium will continue to hold an interest in RGR, with the balance of RGR shares to be distributed to its shareholders on a pro rata basis relative to their holdings.

The proposed spin-out is contingent on approvals from shareholders, courts, the CSE, Nasdaq and regulatory bodies, as well as at the discretion of management.

Following the arrangement, RGR aims to list its shares on the CSE, while Foremost will continue trading on both the CSE and NASDAQ.

To ensure RGR is well-capitalised to achieve its business goals post-arrangement, it is anticipated that RGR will conduct financing or financings of its shares concurrently with the spin-out.

Foremost Lithium president and CEO Jason Barnard said: “The Winston Group of Properties has yet to realise its full value and this plan of arrangement will offer the time and attention the property deserves.

“These past-producing gold and silver mines are within an extremely favourable geological environment and with gold recently hitting over $2,400/oz, we also find ourselves in a favourable precious metals market.

“The spin out will provide tremendous upside potential for our shareholders as they gain a stake in two different meaningful projects.”