Kalamazoo Resources (ASX:KZR) and Canadian gold miner Karora Resources plan to take their Australian lithium projects public by spinning them out into a new company, Kali Metals, that will be listed on the Australian Securities Exchange.

Kali Metals is expected to raise between $10M and $12m in its initial public offering (IPO) to fund exploration and drilling across its Australian lithium project.

Kalamazoo and Karora will own 55% and 45% of Kali Metals respectively before the IPO.

Kalamazoo's CEO, Luke Reinehr says the deal would make the company a significant critical minerals exploration company in Australia.