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IPO Wrap: A closer look at the three HPA, gold and copper stocks listing on the ASX this week
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- Three stocks have listed so far in 2022: Two are up (Greentech Metals, My Foodie Box), one is down (Careteq)
- Three explorers due to hit the bourse on Friday 14: ChemX (HPA, manganese), Far East Gold (gold, copper), and Resilience Mining Mongolia (copper, gold)
Heading into the new year IPO performances were mixed, at best, as investor fatigue started to set in.
A reasonably flaccid December saw 13 of 23 IPOs finish their first day in the red. Just three of the winners made gains above 10%.
2022 is looking like much the same at this early stage, albeit with juicier gains for the winners.
So far in January MBX and GRE have maintained first day wins to be up 25% and 47.5% on their respective IPO prices, while CTQ listed yesterday with a crushing first day loss of 20%. Ouch.
Jan IPO REVIEW
The Artemis Resources (ASX:ARV) spinout was up 27.5c at the close for a 37.5% first day gain. Artemis owns 14.84% of the listed entity, worth ~$1.9 million.
GreenTech, as its name suggests, is interested in battery-facing metals like copper and nickel.
Chief among its targets is the Whundo copper mine, which already contains an indicated JORC 2012 resource of 2.7Mt at 1.14% copper and 1.14% zinc, along with the Ruth Well deposit, which holds 152,000t at 0.5% copper and 0.6% nickel.
The Osborne Nickel project, a JV with Artemis which GreenTech is farming into a 51% share of, will also be of interest. It is immediately next to Azure Minerals’ (ASX:AZS) emerging Andover nickel-copper discovery with millionaire prospector Mark Creasy.
Investors won’t wait long to see their money go into the ground, with executive director Thomas Reddicliffe saying an RC rig has been secured to begin drilling this month.
The WA-focused meal kit stock also made a strong debut.
The $6m IPO was backed by Magnet Investments — the parent company of Australian and New Zealand Thermomix distributor, The Mix – which now holds a ~15% stake following a $2m cornerstone investment.
MBX started trading in January 2019 with 35 subscribers, and in under three years, has grown its active subscriber base to ~1,650.
As of December, the business was generating ~$105k revenue per week.
It is yet to turn a profit and reporting a $601,000 loss for FY21.
“With consumer patterns moving towards a preference for online food delivery and food/groceries being a non-discretionary spend (and the second largest household expenditure item behind rent/mortgage repayments), we believe we are well placed to continue this growth,” co-founder Bryan Hughes says.
“Our experience and success in Western Australia have given us the blueprint for expanding into other Australian cities.”
CTQ — which raised $6m at 20c per share in its IPO — had a shocker on debut, dropping 20%.
The company’s goal is to “significantly improve the lives of the elderly and those with disabilities … by offering the most comprehensive and innovative range of technologies and services to the market today”.
It sells a range of devices and sensors through retailers which monitor vital signs. They can also understand a user’s behaviour so that the system can automatically raise alerts if it detects an accident or a behaviour out of place.
CTQ is yet to turn a profit since commercialising its tech in FY19. It made $5.1m revenue in FY21 for a total loss of $2.8m.
WHO’S LISTING NEXT?
These three resources and battery facing stocks are scheduled to list this week.
Tentative listing date: Fri January 14
Raised: $8m
CMX is joining a small but mighty group of ASX high purity alumina stocks like FYI Resources (ASX:FYI), Alpha HPA (ASX:A4N) and Altech (ASX:ATC).
Demand for high purity alumina (HPA) — a specialised product used in lithium-ion batteries, LED lights, and more – is growing at a rapid rate.
When it comes to lithium-ion batteries, HPA is currently used as the coating on the separator between the anode and cathode. It also has several other growing applications.
CMX currently has a dual focus — exploring the ‘Eyre Peninsula’ halloysite, kaolin and manganese project and developing its upstream HiPurA HPA processing tech.
“HiPurA Process is a unique process technology that is able to produce high purity alumina (HPA) and high purity alumina cathode precursor salts for lithium-ion batteries,” CMX says.
“Confirmed by initial test work, it was indicated that the process is low cost and low in energy consumption, compared to alternative technologies.
“A major benefit of the HiPurA Process is that it’s close to end users and is independent of any mine production, allowing for a quick construction time.”
Tentative listing date: Fri January 14
Raised: $8m – $12m at 20c per share
This explorer hits the bourse with a 1Moz and growing gold resource at the ‘Wonogiri’ project in Indonesia.
In Indonesia, FEG also holds ‘Woyla,’ a project previously held by Barrick Gold and Newcrest.
These major miners identified several drill targets but were never able to start due to forestry designations – an issue Far East has bested.
There’s also ‘Trenggalek’, where more than 17,700m of drilling has been carried out to date.
FEG also has a bunch of earlier stage projects in Australia.
Cumulatively, over $40m has been spent across the FEG portfolio to date.
RESILIENCE MINING MONGOLIA (ASX:RM1)
Tentative listing date: Fri January 14
Raised: $6m at 20c per share
RM1 is hunting large copper and gold deposits in the little-known jurisdiction of Mongolia.
It acquired its projects from Kincora Copper (ASX:KCC), which will receive a 9.9% interest in the stock on listing. The assets are close to Rio Tinto’s (ASX:RIO) world-class Oyu Tolgoi copper and gold mine.
Intial drilling results like 661m @ 0.35% copper, 0.08g/t gold, 0.01% molybdenum from 339m, (incl 37m @ 0.83% copper, 0.14g/t gold, 0.04% molybdenum) “supports one of the largest copper and gold systems in Mongolia”, the company says.
RMM’s strategy is to define and develop the large near surface copper and gold, while partnering to explore the deeper, more expensive-to-drill porphyry projects.
