ASX Capital Raise Roundup: Tight, tight, tight!

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ASX Capital Raise Roundup is a fortnightly look at ASX capital raisings.

We continue to harp on the inflation thematic because we are running at a red-hot pace. The September Personal Consumption Expenditures (PCE) index came in at a 30-year high of 3.64%!

As even further evidence, ​hotels, new cars, non-profit services, furniture, and transportation services are all significantly higher including used car prices up 8% over the past month. We are also noticing the continued rise of ESG-related commodities such as lithium and potash.

Yet, share prices are higher with a particular focus on growth companies (normally the most negatively impacted share prices). Why?

The simple answer is low expectations. Investors are factoring in these inflationary price increases mentioned above. In fact, share prices keep grinding higher.

Finally, as this technical setup persists, the urge to chase performance becomes even larger as FOMO sets into peoples’ minds.

Regarding fundamentals, North American banks’ earnings reports thus far have been stellar with lower loan loss provisions and the foreshadowing of increased net interest margins to further bolster revenues. Companies such as Bank of America and Western Alliance Bancorp are hovering at 52-week highs.

In the commodity complex, copper and energy companies should also report strong earnings improvements and investors will be focusing on managements discussions regarding supply/demand imbalances.

In summation, we could be setting up for a case of low expectations plus strong earnings reports which would lead to higher share prices.

Placements this week

Cannindah Resources Limited (ASX:CAE) has completed a small raise to its second largest shareholder at 31c per share. The raise price was done at a premium to the closing price prior to the placement.

In a further sign of confidence, the share is currently trading at 47c which is now a significant premium to where the placement was done. The funds will be used to continue with the diamond drilling program at Mt Cannindah.

One of the most successful raises at 180 Markets was for Cannindah, priced at just under 5c per share in March this year. That is an incredible return for 180 Markets investors.

Shaun Factor, co-founder of 180 Markets said: “It is great to see how CAE has succeeded in its drilling in such a short period of time. I remember when we first spoke to Gary from Cannindah, when the stock was trading at 2c per share earlier this year. While the company did have significant prospects, it lacked the cash required. Our initial fundraising campaign assisted the company get started and we know a few of our investors are still holding, which is a fantastic result.”

Meteoric Resources NL (ASX:MEI) has conducted a $1.7m capital raise at 1.7c per share. Each share issued will come with a 1:5 free attaching option, exercisable at 2.4c. The company will conduct a $1m SPP for existing shareholders to participate on the same terms as the placement.

Managing director Andrew Tunks said: “As we approach the close of 2021 the company has commenced significant studies on both its core projects. At Juruena we are completing a full Scoping Study with Brazilian Mining Group GE 21. This will include a revisit of the 2021 Resource to remodel for open pit mining as well as plant flow sheet design, environmental considerations and an economic model. Results from the scoping study will be presented to the market in Q1 2022.

“In conjunction with the scoping study we have been preparing the documentation to submit Mining Licence applications over the three key licences that host the known gold prospects. In addition, we have had strong initial interest for partners on the porphyry copper exploration.

“At Palm Springs we had a strong year of exploration results confirming our mineralisation model. This is crucial as it will drive both our development studies and our 2022 exploration. We have made strong progress with the Local Indigenous groups and expect to have some exciting new areas available for exploration in the next field season.”

In what was a very popular raise on 180 Markets, EP&T Global Limited (ASX:EPX) has raised $4.2m at 15c per share. The raise price of 15c was only a 6.3% discount to the previous closing price of 16c. Bell Potter was the sole lead manager to the raise.

Funds will be used to further invest in sales and marketing, as well as install a significant project backlog and drive increase annualised revenues.

The company will also have a conditional placement for directors, subject to shareholder approval that will raise an additional $4m for the company.

EMU NL (ASX:EMU) has raised $2m in an extremely popular raise on 180 Markets. The raise was priced at 2.5c per share and will include two free options for every five new shares applied for. The options can be exercised at 7.5c per share on or before the 15th of March 2023.

The raise was priced at a small 7.4% discount to the closing price the day before.

EMU commenced a ~6,500 Stage 2 RC drilling programme at its Gnows Nest Gold Project, near Yalgoo WA to follow up on its highly successful maiden Stage 1 drilling programme. Approximately 4,000m of drilling completed by the end of the quarter. Drilling confirmed depth extensions of the high-grade plunging shoots at Gnows Next with significant intersections reported from assay results of the first 10 holes.

Traffic Technologies LTD (ASX:TTI) has raised $2.1m at 3c per share through Reach Markets. Shareholders will be given the option to participate in a 7:10 non-renounceable rights issue at 3c per share, being the same price as the placement. The company will be introducing a new investor First Samuel who will be subscribing for $1m of shortfall shares to the registry.

Funds will be applied to repay existing debt, working capital and accretive and strategic acquisitions.

Strickland Metals Limited (ASX:STK) currently remains in a trading halt intending to raise between $10m-$12m at 7.5c per share. Strickland is a gold and base metal exploration company focusing on its prospective Yandal Belt in the goldfields of WA. It also owns 80% interest of a zinc-lead project in the Earaheedy Basin in WA.

Funds will be used to accelerate RC drilling at the company’s Millrose Gold Project. Funds will also be used for follow up exploration drilling at Iriquois zinc/lead project.

Strickland’s last raise was done at 4c per share, which was a significantly lower price than the current raise. The company has been producing consistently good results and we hope this continues.

Thinking about taking the IPO leap?

Hitting the bourse this week

In what was another big week for IPOs, we saw eight companies hit the bourse. Leading the pack was Judo Capital Holdings Limited (ASX:JDO) which had a very successful debut, reaching a high of $2.55 on its third day on the market. The shares opened day one at $2.20 per share which was a premium to its $2.10 IPO price.

Judo Capital Holdings is an Australian bank focusing on lending to small and medium enterprises (SMEs). As at 30 September 2021, Judo had a loan book of $4.15 billion, funding the Australian SME sector through a commitment to relationship-centric lending.

Notable star performer this week was Step One Clothing Limited (ASX:STP), which has been trading consistently significantly higher from its $1.53 IPO price. On Tuesday STP hit a high of $2.92.

Another successful debut was RemSense Technologies Limited (ASX:REM) which is currently trading at exactly double its 20c issue price.

Other listings this week included Vulcan Steel Limited (ASX:VSL), Aurum Resources Limited (ASX:AUE), Austral Resources Australia Ltd (ASX:AR1) and Hamelin Gold Limited (ASX:HMG).

Next week there are four companies expected to list, with 180 Markets partaking in two of them. We wish all investors who participated the best of luck on listing of these new companies.

Listing next week

180 Markets’ recent performers

180 Markets was established by investors for investors, and has become Australia’s leading deal sharing platform, with a difference. In just 12 months, 180 Markets has established a 1800+ strong investor base that has enjoyed access over 650 placements on the ASX, including more than 30 placements where 180 Markets has been lead manager.

If you are interested in Placements, IPOs and RTOs sign up at www.180markets.com.au

This article was developed by 180 Markets, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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