IPO Watch: Record prices and M&A potential present golden opportunity for 'Genesis 2.0'

New ASX IPO chases gold in WA’s Murchison, where M&A activity has been hot
Friday debut came just two days after gold hit record highs, with Ordell Minerals to explore the Barimaia project previously held by major shareholder Genesis Minerals
‘Genesis 2.0’ label comes with former GMD MD Michael Fowler and chair Tommy McKeith at the helm

What could be better? You’ve just completed a gold IPO and listed on the ASX the week the precious metal clipped new record prices.

Maybe if you’re next door to a $2 billion producer which is hot for new deposits and flexing its muscle in the face of a mid-life crisis.

That’s the ‘perfect storm’ new float Ordell Minerals (ASX:ORD), which raised $6 million at the customary 20c per share, enjoyed on its debut to the ASX on Friday.

Ordell closed up 5% on its first trading day at 21c. While gold’s record run should be bullish for most junior explorers, the secret sauce and point of difference is probably Ordell’s location.

Led by the former Genesis Minerals (ASX:GMD) managing director Michael Fowler and non-exec chair Tommy McKeith, its aim is to put the laser-eyed focus on the Barimaia JV near Mt Magnet in WA’s Mid West.

The project never got the spotlight under GMD, which prioritised the Ulysses deposit further south near Leonora and then, under new MD Raleigh Finlayson, turned into a voracious M&A monster branded ‘Saracen 2.0’ seeking to consolidate the Leonora gold district around the underperforming Gwalia gold mine.

Barimaia, acquired by Fowler’s Genesis in 2017 and now owned 80% by Ordell, has some decent shallow gold hits already – think 15m at 11.4/gt from 74m – and sits near Ramelius Resources’ (ASX:RMS) Mt Magnet Mill.

The mid-tier gold miner is hungry for ounces, spending $208m on Spectrum Metals in 2020 and $201m on Musgrave Minerals in 2023 in a bid to improve the quality and life of its flagship asset.

And there’s competitive tension. Barimaia is just 70km from Spartan Resources’ (ASX:SPR) Dalgaranga mill and market-moving Never Never discovery, itself seeing RMS hop to 18% of its register in a $180m on-market purchase, while RMS’ regular M&A sparring partner Westgold Resources (ASX:WGX) boasts the Tuckabianna Mill just 80km away.

“That whole Murchison gold belt has really been a hive of activity for the last five years and there’s been a couple of really good success stories with Musgrave and their Cue project just up the road from Mt Magnet,” Fowler told Stockhead after the explorer branded ‘Genesis 2.0’ listed Friday.

“Spartan have turned Dalgaranga around.

“It’s a great place to operate, and there’s still plenty of infrastructure in the area and there’s plenty of hungry mills.

“Every mid-sized, mid-tier gold company, they want to grow and continue to grow, and they need to do that by either finding it themselves or M&A – purchasing resources. So I think we’re in a great spot with Barimaia from that point of view.”

Gold run brings joy for explorers

Ordell is one of at least gold explorers close to existing infrastructure emerging on the ASX, with African gold hunter Siguiri Gold also planning to open an IPO to float exploration ground near AngloGold Ashanti’s 220,000ozpa Siguiri mine in Guinea this month.

READ: IPO Watch: The exploration IPO market begins to tick. Ever. So. Slightly.

While the IPO market has been, for want of a better word, dead for the past couple years, gold’s run to record levels could present an opportunity for small companies sitting on undercapitalised projects to hit the market.

According to the London Bullion Market Association, the close of trade price for bullion hit a record US$2480.25/oz last Wednesday on July 17.

Shaw and Partners analysts responded by immediately lifting their price forecasts for 2025 and 2026 to US$3000/oz, calling on investors to be overweight bullion and buy Ordell’s neighbour Ramelius.

“Gold, as you know, it’s been strong since 2004 and besides a little dip in 2014-15, in Aussie dollar terms it’s just been up,” Fowler said.

“Obviously things like lithium and rare earths have been up and down quite a bit. Nickel up and down.

“At least you know what you’re getting with gold.”

With project vendor Genesis sitting at 8% of its register, Ordell is targeting 2.5km of strike containing shallow gold hits across the site.

It has around 5000m of reverse circulation drilling planned to follow up successful hits and aircore drilling in new locations which ended in mineralisation, suggesting richer accumulations of gold could be found beneath the shallow cover that overlays the project.

Around $2m was spent while it was a secondary focus for GMD, which had its hands full in Leonora, with Fowler saying the ground is historically underexplored.

The aim is to have enough data to consider a maiden resource after follow up drilling in the first half of 2025.

The size is yet to be determined, but the Musgrave and Spectrum stories certainly show there’s a premium to be placed on high-grade or large scale ounces in the region.

“If we’re looking at $100-200 per resource ounce (for transactions in the Murchison region), there’s significant upside there to our current market cap,” Fowler said.

Ordell also owns the Goodia lithium project near Norseman and Fisher South project east of Wiluna.