IPO Watch: Mitre Mining joins the ASX boards with a 'multi-commodity' approach to exploration

A new junior explorer will join the ASX boards this morning, with Mitre Mining (ASX:MMC) set to list at 11:30am AEST.

The NSW-based company has raised $5m from investors at 20c per share, which it will use to fund exploration at its Mitre Project in the Lachlan Fold Belt.

Speaking with Stockhead ahead of the listing, managing director Clinton Carey said the company is taking a “multi-commodity” approach, as it explores existing gold targets and prospective lithium/rare earth pegmatites at the site.

Hitting the ground

While Mitre’s exploration area lies adjacent to some well-known gold formations and older mine sites, Mitre is also focused on lithium/REE targets after carrying out early stage geomagnetic and aeromagnetic surveys.

Carey said results from those surveys indicate MMC’s exploration block has “plenty of potential”, and the company will deploy some of its IPO capital to further explore what it hopes will be mineral-rich pegmatite formations.

“The next step will be to carry out a lot more soil sampling and rock chip sampling looking for pegmatites,” Carey said.

“We’ve got a site that covers 134sqkm so we’ve split that into separate divisions, and we’ve laid them over the top of the most prospective areas from the geomagnetic and aeromagnetic surveys.”

Mitre has also secured an XRF (x-ray field) machine, and will commence running tests as part of its first stage of development.

“We expect to have those XRF results very soon and from there, we’ll start developing the drill program to test any serious areas of interest,” Carey said.

Capital structure

As an exploration play, Carey said his goal was to establish a tightly-held capital structure for Mitre Mining that represented good value for shareholders.

Ahead of its $5m IPO round, MMC raised $350,000 from investors at 16c per share to get its exploration efforts underway — a discount of only 20% from the listing price.

“A lot of companies come to market where there’s already a lot of shares on issue and there’s pre-IPO funds that have been issued at heavily discounted rates,” Carey said.

“I deliberately did it that way (with a low discount) because I believe in my project, and I’m happy to set the right value for it and build that value for shareholders.”

As a result, MMC will list with a market capitalisation of $6.84m with $5m in the bank, which gives it one of the lower Enterprise Value (shares on issue less net cash) ratios on the market.

Looking at the project more broadly, Carey said the prospective gold credentials of the Lachlan Fold Bet area have been well-documented.

“What’s never been tested is the evidence and availability of rare earths — tungsten, lithium and those type of battery elements,” he said.

“No one’s carried out the assay work or actually looked closely. And given we know they’re in our exploration licence, we’re going to have a look and see if there’s anything worth developing.”

While it’s doing that, Mitre “will also assess the nature of those silver/gold deposits”, Carey said.

“Another way of putting it is we’re taking multi-commodity style approach to the exploration program of work. And we’ve got a multi-disciplinary team committed to giving us the best chance of exploration success,” he said.

“So it’s a very tightly held and well-constructed gold and rare earths explorer. And we’ve got a team in place that’s ready to go on the ground and start getting results for us straight away.”