IPO Report Predicts Poor Listing Numbers for The Year Ahead

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COMMODITY CAPERS: Advisory and Accounting Firm, HLB Mann Judd released its annual IPO Watch Report this week, answering many questions while providing plenty of room for more.

If we get into the nuts and bolts of the report first up, we learn that 87 companies listed on the Australian Securities Exchange (ASX) in 2022.

Not bad, however if you compare it to 2021, a startling picture begins to emerge.

A total of 191 IPOs listed on the ASX in 2021, which at the time, was the highest number of new floats for ten years.

The Resources sector is always a strong performer in this sphere, and in 2021 accounted for 107 out of a total of 191 new market entrants.

Of the 87 new listings in 2022, there were 63 from the Resources sector.

“Over the past five years, with the exception of 2019, the Materials sector has been the biggest contributor to new listings by sector,” HLB Mann Judd Partner, Corporate & Audit Services, Perth Marcus Ohm said in the report.

“In terms of geographical spread, 46 of the Materials listings in 2022 were based in Western Australia, as it continues to be the primary location for new market entrants from this sector.

“A total of 63 per cent of all listings in the year were WA-based and the state has the overall highest number of new listings over the past five years.”

This fall in IPOs did take market watchers by surprise because 2021 had ended with a wet sail facing a healthy pipeline of companies looking to list in early 2022.

By the mid-year point of the 2022, there had been 59 new listings overall, which when compared to the 61 listings at the same stage in 2021 had companies looking to list, licking their lips in anticipation.

But then, suddenly, the IPO market all but dried up in the second half of the year with no single month from June onwards recording double-digits for new listings.

This malaise was reflected in the total funds raised in 2022 that reached $1.07 billion.

This would be okay for Telethon, but when compared to the record-breaking amount raised in 2021 of $12.33 billion it does tend to look insipid.

What is even more worrying is that the monies amounts raised were also well below 2020 ($4.98 billion) and 2019 ($6.91 billion), years that both recorded fewer listings – 74 and 62 respectively – than in 2022, which had fewer contributions from large cap listings than in these prior years.

“The market factors and weaker investor sentiment impacted company subscription targets,” Ohm explained.

“In total, 70 per cent of listings achieved their target amount, a notable fall from 87 per cent in 2021 and below the five-year average of 81 per cent.

“New entrants overall struggled to maintain and grow their share price in the period, despite average first day gains of 16 per cent.

“At the year end, gains for many new entrants were down and, on average, listings posted a loss of 2 per cent against IPO price.”

Economically speaking the New Year started well with commodity prices enjoying a jump and the temperature of China’s cold diplomacy warming while US inflation was reported to have dropped in January to 6.5 per cent for the 12 months through to December 2022.

On the back of these indicators, the ASX enjoyed a buoyant January clocking up a four-week run of gains, hitting a nine-month high in the process.

All eyes are most likely on the Board of the Reserve Bank of Australia (RBA) and where those funsters may decide on what sort of fiscal ride to take us as inflation remains high, leading many analyst to consider another rate rise is on our way in February.

HLB Mann Judd believes the slowdown in IPO activity in the second half of 2022 is likely to continue into 2023, with only 10 companies having applied for listing to the ASX, at this stage.

“Nine of these companies have listed mining or mineral exploration as their principal activity, indicating 2023 is likely to once again be dominated by the Materials sector,” HLB Mann Judd said.

“Three of the proposed IPOs hold lithium projects and three listings have gold projects, indicating these will again be popular commodities for proposed listings in the year.

“Other primary projects held by companies in the pipeline include cobalt and hydrogen.”

The performance of the IPO class of 2022 raises a very important question: Are punters prepared to support stocks once they are up and trading?

Back to the IPO Report stats – 48 companies, or 55 per cent of those that listed in 2022, posted a first day gain, slightly less than 2021, when 60 per cent of listings recorded a first day gain.

The average, and we do mean average, first day gain across all listings was 16 per cent, with only five listings recording a first day gain of over 100 per cent.

Heading this pack was Lithium Plus Minerals (ASX: LPM) giving punters their best first day gain for the year at 180 per cent over issue price, highlighting the strong investor sentiment in battery metals.

The Materials sector had four of the top five listings with the sole interloper being Firebrick Pharma Limited (ASX: FRE), an entrant in the Pharmaceuticals, Biotechnology & Life Sciences sector, producing a first day gain of 165 per cent, taking second place on the first day gain listings.

“Market entrants struggled to maintain their year end share price following their first day gains, with 65 companies experiencing a fall in share price following first day trading,” HLB Mann Judd observed.

“The largest falls were recorded by three of the five new listings that recorded first day gains over 100 per cent.

“This activity reflects how quickly circumstances can change in the current market.”

Yes, circumstances can change, but one thing doesn’t – the thirst for profits.

Perhaps next year the bean counters preparing the Report might want to take note of the share trading volumes on these first days.

It would be a worthwhile wager that day one would be the busiest as those with the shares, armed with the ability to pump them up to eager buyers sell off quickly, thus providing a healthy wad of cash in the bank for when these companies come around for their first capital raisings at five, perhaps seven cents, that can quickly be sold off again at nine cents.

Get in and get out quick seems to be the IPO axiom at present and there is no sign punters are prepared to stick it out for the long haul.

Maybe those who get out early, taking their profits with them are the same ones who buy back in at seven or nine cents, hoping the original dream they shared with the Board of Directors, one day comes true.

Or is there just not enough money around for investors to leave it there and be able to find more for further flutters?

Miramar Resources Releases Exploration Target Highlighting Gidji JV Gold Potential

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THE DRILL SERGEANT: Miramar Resources (ASX: M2R) has presented an initial gold Exploration Target at the company’s 80 per cent-owned Gidji Joint Venture project in the Eastern Goldfields of Western Australia.

Miramar Resources has estimated an initial shallow gold Exploration Target of 1.3 to 3.1 million tonnes, at a grade of 1.2 – 1.5 grams per tonne gold for the project’s Marylebone target.

The company explained the Exploration Target was estimated from aircore, RC and diamond drilling Miramar has conducted since commencing exploration at Gidji in late 2020 and is currently restricted to the shallow supergene and/or alluvial gold mineralisation encountered within the Marylebone target.

Miramar believes this initial Exploration Target underscores the large gold endowment potential of the Gidji JV project.

“Our primary aim at Gidji is to discover one or more large bedrock gold deposits, similar to the large Paddington deposit, immediately north of our project,” Miramar Resources executive chairman Allan Kelly said in the company’s ASX announcement.

“After our first aircore drilling campaigns at Gidji, we recognised that there could also be significant shallow supergene and/or alluvial gold mineralisation which could potentially be developed in the short term, given the proximity to the Goldfields Highway and various gold processing operations.

“The amount of shallow supergene and/or alluvial gold discovered to date, along with multiple other targets, also implies a significant bedrock source nearby which is yet to be discovered.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

AuTECO Minerals Completes $9M Placement to Fast-Track Regional Exploration

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THE DRILL SERGEANT: AuTECO Minerals (ASX: AUT) has received firm commitments from institutional, sophisticated and professional investors to raise approximately $9 million.

The cash arrives through a placement of 180 million fully paid ordinary shares at an issue price of five cents.

Proceeds will be spent to fast-track seasonal exploration work focused on targeting new discoveries at the company’ Pickle Crow gold project in Ontario, Canada.

The Pickle Crow gold project currently hosts a JORC 2012 Inferred Mineral Resource of 2.23 million ounces at 7.8 grams per tonne gold, with a 50,000 metres drilling program underway to advance growth.

“Funds from the Placement will enable us to fast-track regional exploration work during the winter drill season, in addition to further increasing the size and quality of our existing 2.2 million ounces at 7.8 grams per tonne gold inferred resource at Pickle Crow,”AuTECO Minerals executive chairman Ray Shorrocks said in the company’s ASX announcement.

“The quality of the institutions attracted signals the market’s confidence in our dual strategy of growing the high-grade gold resource in the shadow of the mine’s historic headframe, while also drilling our 500 square kilometres of exploration claims to test the scale of the system.

“The regional exploration potential is immense, and we are just starting to unlock the discovery potential geologically.

“The significant interest in the Placement, which was well supported, also reflects the work delivered to date at Pickle Crow, which has demonstrated the potential to significantly grow resources in the short-term and long-term.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Legend Mining Delivers Maiden Mineral Resource Estimate for Mawson

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THE DRILL SERGEANT: Legend Mining (ASX: LEG) announced a maiden Mineral Resource Estimate (MRE) for the Mawson deposit within the company’s Rockford project in the Fraser Range of Western Australia.

The MRE has come in at 1.45 Million tonnes at 1.14 per cent nickel, 0.74 per cent copper, and 0.07 per cent cobalt (1.2% nickel equivalent (NiEq)) for 28,200 tonnes contained metal (16,500t nickel, 10,600t copper, 1,100t cobalt).

The MRE consists of an Indicated Estimate of 0.86 million tonnes at 1.41 NiEq for 11,500 tonnes nickel, 7,600 tonnes copper and 700 tonnes cobalt.

The Inferred category has come in at 0.59 million tonnes at 0.9 per cent NiEq for 5,000tonnes nickel, 3,100 tonnes copper, and 400 tonnes cobalt.

“The rationale to publish this resource at Mawson was to quantify the success of our exploration efforts to date and to establish a base upon which we can continue to build a resource inventory at our Rockford project,” Legend Mining managing director Mark Wilson said in the company’s ASX announcement.

“This is the third published nickel resource in the Fraser Range, demonstrating that this under explored nickel belt has the potential to host further accumulations of nickel-copper sulphide.

“Our ongoing systematic exploration efforts will look to discover more of these accumulations across Rockford.

“We are looking forward to receipt of the Octagonal 3D seismic model and the reprocessed model for Mawson as a basis to plan diamond drilling for the upcoming field season as set out in our December 2022 Quarterly Report.

“Meanwhile, the regional aircore drilling and innovative high power EM surveys are ongoing.”

 

 

 

Killi Resources Identifies Yttrium-REE anomaly at West Tanami Project

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THE DRILL SERGEANT: Killi Resources (ASX: KLI) reported elevated yttrium values from a soil program, claiming they indicate close proximity to a rare earth mineral system at the company’s West Tanami project in the Kimberley region of Western Australia.

Killi Resources completed a broad soil program across regional trends it considers potentially prospective for hydrothermal rare earth element systems.

The company interpreted the results of the soil program to have established multiple anomalous yttrium values at the Fox prospect, which it believes is indicative of a rare-earth mineral system at the prospect.

“The results indicate the potential for a heavy rare earth system at the Fox prospect,” Killi Resources CEO Kathryn Cutler said in the company’s ASX announcement.

“These are fantastic first pass yttrium results for the project, indicating we are in the right region and we plan to develop and drill test this REE target in the coming field season.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

Elementos Hits More Tin with Final Oropesa Infill Drilling Assay

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THE DRILL SERGEANT: Elementos (ASX: ELT) has hit further tin mineralisation zones at the company’s Oropesa tin project in Spain.

Elementos made the call after receiving assay results from the final infill drill hole from its 2022 Mineral Resource upgrade drilling program that was undertaken to upgrade the remaining Inferred Mineral Resources that sit within the 2022 Optimisation Study US$30,000/t pit shell.

Drill hole ADD_33 returned three noteworthy zones of tin mineralisation.

11.2 metres at 0.51 per cent tin & 1.37 per cent zinc from 86.2m;
4.6m at 0.34 per cent tin & 0.15 per cent zinc from 119.3m; and
20.2m at 0.18 per cent tin & 0.07 per cent zinc from 131.4m.

The company declared the final assay result as a positive end to a drilling program that had increased its understanding and level of confidence of the Oropesa Mineral Resource.

“Our geological team is well underway with updating and modelling this part of the Mineral Resource, with the aim of upgrading the targeted Inferred tonnes that reside within the 2022 Optimisation Study US$30,000 per tonne pit shell to the Indicated classification,” Elementos managing director Joe David said in the company’s ASX announcement.

“This would result in all tonnes within the pit shell being available for assessment when modifying the Mineral Resource (during the Feasibility Study) to JORC Ore Reserves.

“Our goal is to have the upgraded Oropesa tin project Mineral Resource Estimate released to the market during February, and the DFS completed before mid-year.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

 

Dreadnought Resources Set for Exploration Plunge After $20M Placement

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THE BOURSE WHISPERER: Dreadnought Resources (ASX: DRE) has raised $20 million to advance the company’s Rare Earth Element (REE) project in Western Australia.

Dreadnought Resources said the funds will be spent on accelerating drilling activities at the company’s 100 per cent-owned Mangaroon REE project where the range and scale of minerals have seen Mangaroon emerge as a world-class critical metals province.

Dreadnought will also advance its other projects, including Mangaroon Gold, Tarraji-Yampi, Central Yilgarn and Bresnahan.

On top of the $20 million placement, the directors of Dreadnought have made commitments to invest $1.4 million at the same price of 10 cents per share (subject to shareholder approval at a general meeting in March 2023) and will have a pro-forma ownership of approx. 13 per cent, with a total investment of approx. $4.5 million.

“The range and scale of minerals we have identified have seen Mangaroon emerge as a world-class critical metals province in about six months,” Dreadnought Resources managing director Dean Tuck said in the company’s ASX announcement.

“We have already identified a source of the regional rare earths at the C3 carbonatite with potentially more to come.

“These funds will allow for further rapid progress on rare earths and a range of other critical metals at Mangaroon.

“The company will also progress activities at its other projects, which are showing considerable promise as ongoing exploration continues.

“All this amounts to continuous news flow and an exciting period ahead for Dreadnought.

“Dreadnought would like to thank shareholders, new and existing, for the continued support and we look forward to delivering on our strategy to uncover the potential of our exciting portfolio of assets.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Lithium Energy Encounters Further Conductive Brines at Solaroz

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THE DRILL SERGENT: Lithium Energy (ASX: LEL) announced an encounter with new intersections of conductive brines at the company’s Solaroz lithium brine project in Argentina.

Lithium Energy said reported intersections of highly conductive brines have been encountered at depth in both current diamond drill holes SOZDD002 and SOZDD003 in the northern central section of the Salar de Olaroz basin (Olaroz Salar).

Drillhole SOZDD002 highlights to date include:

▪ Conductive brines being intersected over an interval of approx. 107 metres in the upper aquifer, from a depth of 186 to 293m;

▪ Drilling has now advanced into fractured shales from a depth of 293m (to a current depth of 438m), with highly conductive brines continuing to be encountered at depth as drilling progresses.

Drillhole SOZDD003 highlights to date include:

▪ Conductive brines being intersected over an interval of approx. 107m in the upper aquifer, from a depth of 176 to 283m.

▪ Following drilling through a massive halite (salt unit) layer, the targeted Deep Sands Unit (lower aquifer) has been reached with highly conductive brines having now also been intersected over an interval (to date) of approx. 57m from a depth of 500m to the current hole depth of 557m with highly conductive brines continuing to be encountered at depth as drilling progresses.

“Lithium Energy is very encouraged to have encountered more conductive brines in the second and third holes drilled by the company, following the significant lithium discovery already made at its first drillhole at Solaroz,” Lithium Energy executive chairman William Johnson said in the company’s ASX announcement.

“The thicknesses of the intersections encountered, together with the distance between these two current holes and the maiden lithium discovery made by the company at its first drillhole at the Mario Angel concession provides increasing confidence that extensive occurrences of conductive brines are present at Solaroz.

“The company currently awaits lithium assay results on these second and third holes and on completion of the current initial 10-hole drilling program, the company will move to the establishment of a maiden JORC Resource of lithium at Solaroz.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Global Lithium Resources Encounters Positive Drilling at Manna Lithium Project

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THE DRILL SERGEANT: Global Lithium Resources (ASX: GL1) reported receipt of further assay data from the company’s 100 per cent-owned Manna lithium project, located 100km east of Kalgoorlie in Western Australia.

Results from the latest RC and Diamond results include:

MRC0126
17 metres at 1.6 per cent lithium oxide (Li2O) from 114m;

MRC0108
15m at 1.2 per cent Li2O from 107m;

MRCD0059
9.43m at 1.18 per cent Li2O from 283m; and

MRCD0133
9.41m at 1.68 per cent Li2O from 341m.

The company explained these latest assay results have not been included in the Scoping Study due for completion in Q1 CY23.

They will, however, be added to the current MRE at Manna, to further extend the known size and increase the confidence levels of the classification of the Manna deposit.

Global Lithium’s 2023 exploration program is currently underway to map out the company’s larger tenement area since reaching 100 per cent ownership of the Manna lithium project.

“It gives us great satisfaction to see that the extensive work programs at our Manna lithium deposit continues to deliver excellent results and that the project is clearly emerging as a significant hard rock lithium resource in Western Australia,” Global Lithium Resources general manager exploration Stuart Peterson said in the company’s ASX announcement.

“It was a tremendous team effort for GL1 to achieve such a large resource upgrade in a relatively short timeframe, in addition to having sufficient drilling data to allow the Scoping Study to proceed uninhibited.

“These additional assay results, based on drilling that was undertaken after the mineral resource cut-off point, will provide a significant addition to the overall scale of the MRE as we aim to further increase the indicated classification across the Manna deposit.”

The Manna lithium project currently hosts a Mineral Resource Estimate of 32.7 million tonnes at 1 per cent Li2O.

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Recharge Metals Encounters Broad Copper Mineralisation at Brandy Hill South

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THE DRILL SERGEANT: Recharge Metals (ASX: REC) reported drill results from the company’s Brandy Hill South project located within the Archaean Gullewa Greenstone Belt in Western Australia.

Recharge Metals said the assays were the last from an extensive field program completed during 2022 and have encouragingly extended the known limits of the copper mineralisation delineated to date at the Brandy Hill South prospect.

The company said the latest drilling results had identified broad zones of copper mineralisation associated with anomalous silver, molybdenum and tungsten, including:

BHRCD027
22.5 metres at 1.02 per cent copper, 6.8 grams per tonne silver, 32ppm molybdenum, 654ppm tungsten from 375.5m, including 7.5m at 1.65 per cent copper, 11g/t silver, 15ppm molybdenum, 929ppm tungsten from 375.50m; and

20.96m at 0.37 per cent copper, 3.2g/t silver, 19ppm molybdenum, 343ppm tungsten from 404.04m.

“Recharge is encouraged by the significant widths of copper mineralisation encountered in this last drill program,” Recharge Metals executive director Felicity Repacholi-Muir said in the company’s ASX announcement.

“The Brandy Hill South prospect has been a hub of activity since listing in October 2021, and in this short space of time we have delineated copper mineralisation over a strike length of 500 metres.

“Recharge has engaged an industry consultant to complete an independent high-level review of Brandy Hill South’s copper potential, which will help guide Recharge’s exploration strategy.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE