Money is flowing into ASX companies, explorers pick up their share
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Despite the uncertainty brought about by the COVID-19 pandemic, the ASX has reported total capital raised for the year to date to June 2020 has increased by 13 per cent over the previous corresponding period to $97.19bn.
More than a quarter of this amount, or $25.96bn, was raised during the month of June, a 256 per cent increase over the capital raised in June 2019.
The 2020 financial year also saw a drop in new listings with the total number of initial public offerings falling from 111 in the 2019 financial year to 83 in FY2020, while initial capital raised dropped 28 per cent to $26.96bn.
Oddly though, initial capital raised in June 2020 rocketed 815 per cent to $16.54bn over June 2019.
Meanwhile, secondary capital raised jumped 44 per cent to $65.03bn in FY2020.
Secondary capital covers funds raised through tools such as share placements and share purchase plans.
At least part of this might have been due to temporary changes put in place by the ASX and ASIC in March to make it easier to raise capital.
Gold-focused players are still attracting the lion’s share of interest, with a number of small cap gold companies kicking off the new financial year with notable capital raisings.
Bardoc Gold (ASX:BDC) has received firm commitments for a $24m share placement that it says is strongly supported by tier 1 Australian and global institutions.
The placement of 7.8c per share, a 9.1 per cent discount to its five-day trading volume weighted average price (VWAP), will increase the company’s cash reserves to over $35m.
Proceeds will be used to advance its North Kalgoorlie gold development strategy and de-risk its development pathway, which includes the completion and delivery of a definitive feasibility study and front-end engineering and design work.
DevEx Resources (ASX:DEV) is raising up to $5.5m to fund exploration programs at its projects in the Lachlan Fold Belt, New South Wales, and Julimar Region, Western Australia.
The first $4.7m in the share placement priced at 10c per share will be made to sophisticated and institutional investors, while the remaining $810,000 placement to the company’s directors will be subject to shareholder approval.
Meanwhile, Matador Mining (ASX:MZZ) has joined the rare club raising funds through a share placement priced at a premium to its share price.
The company has completed an $8.7m placement priced at 40.5c per share, a 44.5 per cent premium to its 15-day VWAP.
This was possible as the shares were issued as Canadian charity flow-through shares that provide tax incentives to investors for expenditures that qualify as flow through mining expenditures.
Proceeds from the placement will be used to fund exploration at the Cape Ray gold project in Newfoundland, Canada, where a 12,000m drill campaign and a major greenfield exploration program will begin shortly.
Mithril Resources (ASX:MTH) is now planning an expanded diamond drill core program at its Copalquin gold-silver project in Mexico after raising $3.5m through a share placement priced at 1.8c.
The drill program will test the primary targets of La Soledad-El Refugio-El Cometa as well as additional testing at other important target areas including La Constancia and San Manuel.
Earlier this month, Auteco Minerals (ASX:AUT) received firm commitments for a $30.4m share placement to fund exploration at its flagship Pickle Crow project.
Pickle Crow has a current resource of 830,000 ounces of gold at an average grade of 11.6 grams per tonne gold.
Emmerson Resources (ASX:ERM) has secured commitments to raise up to $3.5m in an oversubscribed placement to institutional and sophisticated investors.
This includes $2m from new strategic investor Palisades Goldcorp, which will provide visibility to the important North American market for Emmerson.
A further $1m will be sought from existing shareholders under a share purchase plan.
This new funding places Emmerson in a strong position to advance its NSW projects to the next phase while momentum builds in the emerging gold royalty business at Tennant Creek.
Non-gold capital raisings are certainly rarer but that hasn’t stopped Galena Mining (ASX:G1A) from adding $12m to its war chest through an oversubscribed placement of shares priced at 21c each.
This was supported by existing and new investors including the company’s largest holder and strategic investor Timothy Roberts, who subscribed for 11.15 million shares to maintain his shareholding of about 20 per cent.
Proceeds will be used to undertake optimisation drilling and works at its Abra base metals project in WA’s Gascoyne region along with drilling the newly interpreted gold and copper zone at the project.