Westar ready for ASX debut after closing $5m IPO

Special Report: Investor appetite for new Australian gold stories is showing no signs of waning, with Westar Resources the latest ASX hopeful to comfortably complete an initial public offering.

Westar, which owns a portfolio of exploration assets in some of Western Australia’s best known goldfields, closed the book for its IPO on Friday last week after reaching the $5 million in subscriptions it was seeking.

The offering – 25 million shares at $0.20 each – opened only two weeks prior.

According to Discovery Capital Partners, which acted as lead manager for the IPO, the book had strong support from sophisticated investors including a number of institutions.

Given the typical reluctance of institutions to back early-stage exploration plays, this outcome was a strong endorsement of the prospectivity of Westar’s projects.

Westar is expected to start trading on the ASX in early to mid-December and will have a market capitalisation of just over $10 million.

This translates to a modest enterprise value of around $5 million, meaning the company will be highly leveraged to exploration success at any of its projects.

In the lead-up to listing, Westar is continuing to refine and prioritise exploration targets in preparation for kicking off multiple field campaigns early in 2021.

Assets all have potential

The immediate focus is likely to be the Gidgee South project in the Sandstone district, which was acquired from ASX-listed Rafaella Resources in an all-scrip deal earlier this year.

Westar managing director Karl Jupp describes Gidgee South as being “a geologist’s dream”.

“We’re directly along strike from the historical Birrigrin Mining Centre and the project has historical workings, dryblower heaps and a whopping big soil anomaly that has never been drilled,” he said.

The company also owns two projects at Mt Magnet, Winjangoo and Coolaloo, both of which have been subject to minimal drilling and are in close proximity to several operating gold mines.

Winjangoo is the most advanced of the two projects and will be the focus of geophysics, soil sampling and mapping before drilling gets underway in the first quarter of 2021.

Westar’s projects in the Southern Cross district, Mt Finnerty and Parker Dome, are the subject of a farm-in agreement with established gold miner Ramelius Resources.

Under the agreement, Ramelius can earn a 75% interest in each project by spending $2 million on exploration across both, with Westar free carried on its 25% interest to a decision to mine.

Drilling is expected to start at Mt Finnerty in the coming months.

Ramelius’ Edna May mill looms as a potential destination for any discovery at either project.

The final asset in the Westar portfolio is Opaline Well in the Pilbara Craton, where historic rock chip samples returned assays of up to 200 g/t gold but again only limited drilling has been conducted.

AIM-listed Greatland Gold holds three surrounding leases and has been very active in the area.

Jupp and fellow founders, geologists Nathan Cammerman, Nat Cull and Andrew Jones, began assembling the Westar portfolio four years ago with a focus on identifying the “right rocks in the right locations”.

This story was developed in collaboration with Westar 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.