Upcoming floats bank on continued investor appetite for gold and lithium

Peel Mining spin-off Saturn Metals and Thor Mining-backed US Lithium are heading for ASX listings early this year.

Saturn Metals, which expects to list under the ticker STN, has launched an initial public offer to raise up to $7 million and list by March 15.

Perth-based Peel (ASX:PEX) decided to demerge its Apollo Hill gold project in Western Australia into Saturn Metals late last year to give it the benefit of reduced competition for capital and increased attention from management.

Peel’s main focus has now shifted to its 50 per cent-owned Mallee Bull copper deposit in the Cobar Basin of New South Wales.

“Peel Mining has been interested in giving [Apollo Hill] a focus of its own,” managing director Ian Bamborough told Stockhead.

“It’s an excellent gold asset in the heart of the Eastern Goldfields of WA and it really needs its own focus and attention and team on it.”

Investor appetite for gold plays has increased in recent times, particularly on the back of a gold nugget discovery in the Pilbara region of Western Australia by ASX-listed Artemis Resources (ASX:ARV) and Canada’s Novo Resources in July last year.

‘Strong’ interest in Saturn IPO

Initial interest for Saturn’s IPO has been “strong” and Mr Bamborough is confident the company will raise its targeted sum.

“If I look at other floats that have occurred, gold floats in particular in Western Australia, they’ve done reasonably well.

“I think we’ve got a strong asset, an existing half a million ounce resource and a very significant consolidated land package in the heart of the Eastern Goldfields. I think there will be a lot of interest.”

Saturn estimates it will have between $4 million and $6.3 million post-listing depending on how much it raises in its IPO.

The company plans to undertake an aeromagnetic survey at the Apollo project prior to listing and expects to begin drilling as soon as it hits the ASX.

US Lithium wants to go public

Thor (ASX:THR), which is primarily focused on tungsten, acquired an initial 25 per cent stake in private Australian company US Lithium in June 2017. Its stake has now been diluted to 20.83 per cent following a recent capital raising.

Lithium has attracted the interest of many junior explorers due to the anticipated growth in demand, led by the expanding next generation battery market and electric vehicles.

The demand growth, however, is not expected to really kick in for another three to five years. Market intelligence firm Roskill estimates that by 2026 the transportation market for lithium ion batteries will have grown 40 per cent on 2016 levels.

“We have a focus on commodities where we believe there is likely to be ongoing strong demand,” Thor executive chairman Mick Billing told Stockhead.

Thor also has investments in copper and gold. Mr Billing said Thor believes there is a “strong growth story associated with lithium.

“If we can get some exposure to a decent lithium project or two without having to spend an enormous amount of shareholders’ money, well then that’s a good thing to do,” he said.

Thor does not plan to increase its stake in US Lithium prior to its listing on the ASX. “We have a relative aggressive spend on a whole bunch of other things at the moment,” Mr Billing said.

US Lithium has applied for additional claims to the south of its Big Sandy project in Arizona, which is expected to double the project’s footprint.

The company is aiming to make its debut on the ASX in the first half of this year.

Thor’s shares closed up 9.5 per cent at 4.6c on Tuesday.