Special Report: The first resources IPO completed in 2020, precious metals play Manuka Resources, stormed on to the ASX on Tuesday, gaining as much 42.5% during the day.

Manuka Resources (ASX:MKR), which owns the Mt Boppy gold project and the Wonawinta silver project in the Cobar Basin in New South Wales, was inundated with demand when it opened its IPO in early June and within less than 48 hours had taken applications for the maximum $7 million it was seeking.

The rapid closure of the IPO – along with the continued strength of Australian dollar gold and silver prices since then – suggested the stock would do well on debut and it didn’t disappoint, rising to an intra-day high of 28.5c before settling back to close at 25.5c.

Shares in the IPO were issued at 20c each.

“We are extremely proud to have attracted the support of our IPO investors, including several institutional investors who possess a strong understanding of the precious metals industry and the potential of the Cobar Basin,” Manuka executive chairman Dennis Karp said.

“The capital they have provided the company will enable it to exploit its tenement package and hopefully deliver more ounces into our refurbished and upgraded mill at Wonawinta.”

Manuka produced first gold in April, processing stockpiled Mt Boppy ore treated through the 850,000 tonne per annum Wonawinta plant.

The company anticipates recovering 22,000-24,000 ounces of gold from stockpiles and mined Mt Boppy ore over the next 12 months.

Proceeds from the sale of this gold is expected to allow the retirement of $24.5 million in debt.

On Tuesday, Manuka provided an update saying it had processed 63,499 tonnes of stockpiled ore grading 2.63 g/t Au from late April to the end of June in line with expectations.

This yielded 3,600 ounces that was sold at an average price of $2,555 an ounce.

Mining of the Mt Boppy pit began in late June.

Much like Mt Boppy, Wonawinta contains a significant amount of silver in stockpiles that the company intends to start processing in the June quarter of next year.

The third phase of activity, planned to start in the March quarter 2022, would be mining and processing of the shallow (<60m) oxide resource at Wonawinta.

Including the stockpiles and shallow oxide material, total JORC compliant resources at Wonawinta amount to 38.8 million tonnes at 42 g/t silver for 52.4 million ounces.

Within this is a higher grade component of 4.5 million tonnes at 97 g/t silver for 14 million ounces.

Manuka also holds a tenement package of more than 1,126kmin the Cobar Basin that contains significant exploration potential.

Within the first six months of listing, the company intends to drill a number of high conviction targets not only at and around Mt Boppy and Wonawinta but within the broader tenement package.

Manuka , which was formed by resources industry financier ResCap Investments, will have a market capitalisation of almost $50 million upon listing.

ResCap has seen its interest in the company reduce to 36.2% through the IPO process, while all the convertible note holders have converted to ordinary Manuka shares.

There have been six IPOs completed in other sectors this year, but the only other new mining company to list has been Cobre Limited, which completed its IPO last year and listed in January.


This story was developed in collaboration with Manuka Resources, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.