Twelve of this year’s 17 mining IPOs are underwater – but one is up 300pc
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This year we’ve seen a surge in junior explorers going down the IPO path, but only five are now trading above water according to a review by Stockhead.
A total of 17 fresh-faced junior exploration plays have begun life as listed companies on the ASX so far in calendar 2017, according to Bloomberg.
That’s a solid increase on the nine listings in the last six months of 2016.
The 17 IPOs raised about $100 million, showing there is investor appetite to get onboard a company register at the beginning of its ASX life.
Of these, eight battery-related commodities raised more than half the total funds on the back of growing demand for electric vehicles.
However, only five of the 17 mining stocks making their debut so far this year were trading at premiums to their issue price by August 4.
Three of the five have exposure to battery-related commodities cobalt and lithium.
However, four other IPOs with cobalt and lithium exposure all traded below issue price including the worst performing IPO for 2017 so far.
|Name||Ticker||Date of Listing||Amount raised(M)||Issue price||Share price (Aug 4)||Per cent change||Commodity|
|Kalamazoo Resources||KZR||Jan-16||$5.0||0.2||0.10||-0.5||Gold and copper exploration|
|Blackstone Minerals||BSX||Jan-23||$3.5||0.2||0.27||0.3500||Gold and silver|
|Cobalt Blue Holdings||COB||Feb-02||$10||0.2||0.18||-0.1000||Cobalt|
|Ardea Resources||ARL||Feb-09||$5.1||0.2||0.81||3.05||Cobalt, zinc, gold and nickel sulphide|
|Matador Mining||MZZ||Mar-08||$3.4||0.2||0.23||0.1500||Gold, copper, lithium, tantalum and tungsten|
|Lithium Consolidated Mineral Exploration||LI3||Mar-28||$5.3||0.2||0.13||-0.35||Lithium Brine|
|Todd River Resources||TRT||Apr-06||$6.0||0.2||0.135||-0.3250||Zinc, Copper, magnesium, lead and other base metals|
|E2 Metals||E2M||Apr-19||$6.0||0.2||0.11||-0.4500||Gold and Silver|
|Alderan Resources||AL8||Jun-09||$8.5||0.2||0.70||2.5000||Copper, gold and silver|
|Golden Mile Resources||G88||Jun-19||$4.5||0.2||0.15||-0.2500||Gold, cobalt, polymetallic and other base metals|
|American Pacific Borate & Lithium||ABR||Jul-28||$15.0||0.20||0.29||0.4500||Borate, Lithium|
Ardea and Alderan leading the way
Nickel-cobalt player Ardea Resources (ASX:ARL) and US-focused copper hopeful Alderan Resources (ASX:AL8) have been the pick of the meagre bunch trading at a premium to issue price.
Listing on February 9 after spinning out from Heron Resources (ASX:HRR) and raising $5.2 million, Ardea soared as high as $1.03 on August 1 — five times its 20c issue price. It has since come back to close at 81c on August 4 — still a healthy 300 per cent increase.
Ardea has gained on the surge for cobalt demand to power batteries for electric vehicles thanks to a significant cobalt zone at its Kalgoorlie Nickel Project in Western Australia.
The cobalt zone has a “JORC 2012” compliant resource of 65.7 Mt at 0.13 per cent cobalt and 0.79 per cent nickel for more than 83,000 tonnes of contained cobalt, using a 0.08% cobalt cut-off (reported on June 28).
The JORC Code is the industry standard for reporting exploration results set by the Joint Ore Reserves Committee.
Another big mover is Alderan Resources (ASX:AL8) which listed in June after raising $9 million. The stock soared as high as 77c in July — more than triple its 20c issue price — before dipping to 70c on August 4.
Alderan’s main focus is the Frisco Project in Utah, United States, a historical base metals project which is considered under-explored. The company recently announced it would begin a new drilling campaign at the project by August.
American Pacific Borate & Lithium, Blackstone Minerals and Matador Mining were the only other resources IPOs above water by August 4.
Worst performers so far in 2017
At the other end of the spectrum, Davenport Resources (ASX:DAV) has been the worst performing IPO this year, down 58.5 per cent on its issue price.
Freehill Mining and Kalamazoo Resources are not much better at 57.5 per cent and 50 per cent discounts as of last week.
Lithium Consolidated Mineral Exploration (ASX:LI3) looked like joining them at the bottom of the table when it hit 7c in July — down 65 per cent on its issue price.
But it has since recovered to 13c — a loss of 35 per cent.
LI3 raised $5 million in its IPO after originally seeking to raise up to $8 million.
LI3 CEO Shanthar Pathmanathan recently said the company only needed $5 million to focus on exploration at its Big Smokey Project in Nevada.
Since listing on the ASX in March, LI3 has been preparing for its upcoming drilling program at the project.
Investors will be hoping things pick up for IPO hopefuls in the second half of 2017.