It was tough to raise capital in March unless you were a gold explorer
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Despite March being a tough month to raise capital for ASX small caps, the money was still flowing for the gold explorers.
In March, ASX small caps raised $72.2m, a steep decline from the $125m raised in February. Even in January, traditionally a quiet month companies still raised $86m.
Even with a mini-recovery towards the end of the month, the ASX lost over 20 per cent having begun its slide in the last week of February.
But more than half of the capital raised ($38.3m) went towards small cap gold explorers.
Sky Metals (ASX:SKY) was one recipient of the investor cash splash. The company rocketed back in February after maiden drilling at its NSW project returned a 93m intersection grading 4.24 grams per tonne (g/t) gold, 56m from surface.
The company wants to do a follow-up drilling campaign and raised $5m at the start of the month.
Another cashed up gold stock is Western Australia-focused Saturn Metals (ASX:STN). Three weeks ago Saturn reported a high-grade interval of 9m at 8.67g/t gold from 116m including 3m at 24.6g/t gold from 119m. The company topped up its coffers by $3m in March.
Oklo Resources (ASX:OKU) raised the most amount of cash, with investors injecting a further $12m.
Yesterday the company reported that the “game-changing” SK1 North discovery was now 500m longer after drilling intersected more thick zones of high-grade gold — including 32m at 10.57g/t, 52m from surface.
Some individual grades came in as high as 102.37g/t.
This saw shares close up nearly 30 per cent on Tuesday.
Oklo boss Simon Taylor told Stockhead his company begun its campaign before the worst of the impact and now investors were seeing the quality of the project.
“Drilling continues to deliver excellent results from our Sk1 North discovery and we are very encouraged that the market is recognising this and its reflected in our share price since the last raising,” he said.
Taylor said that although the pandemic had hit markets worse since Oklo had raised the money, supply had not completely dried up.
“There is still funding available for good exploration projects and we are seeing that in the gold space with record high gold prices in Australian dollar terms,” he said.
“Investors are supporting explorers with quality projects and healthy cash balances at this time of uncertainty.”
While COVID-19 facing stocks have witnessed strong share price movement — from 10-bagger TBG Diagnostics (ASX:TDL) to 22-bagger Zoono (ASX:ZNO) — not all have been game enough to tap investors in this period of volatility or needed to.
Investors, however, are willing to sink cash into the right COVID-19 linked stocks, as evidenced by the fact biotech Respiri (ASX:RSH) raised $2m in the last week to fund increased production of its remote home-monitoring system for asthma sufferers.
People with asthma are among those who could be heavily affected by COVID-19 because the pair can deliver a double whammy to a patient’s lungs.
Other companies that raised money included supply chain integrity tech platform Security Matters (ASX: SMX) which raised $6.5m, anti-cancer biotech Race Oncology (ASX:RAC) and diamond miner Lucapa Diamond Company (ASX:LOM).