Upcoming ASX IPOs: A much needed large cap copper play is coming

Capstone Copper – 2 February

At a glance – Capstone Copper is an established copper producer and developer with a portfolio of long-life operations in the Americas (US, Mexico and Chile). The company is currently listed on the Toronto Stock Exchange with a market cap of C$4.6bn.

Key details:

• In 2022 (the latest full-year result), the company delivered US$1.29 billion in revenue and US$85.6 million in net income

• Capstone achieved its 2023 full-year production guidance with group copper production of 164,353 tonnes at C1 cash costs of approximately US$2.85-2.90 a pound

• CEO John Mackenzie said “The fourth quarter was our best of the year, with consolidated production up 10% and cash costs down approximately 7% quarter-over-quarter, setting us up well for a strong 2024."

What makes this IPO interesting

• Capstone is in the midst of a transformative expansion via the Mantoverde Development Project in Chile. The US$870 million project is in the final stages of construction and seeks to raise production from the current 49,000 tonnes of copper run-rate to 120,000 tonnes of copper in 2024

• The ASX is lacking large cap copper opportunities after BHP's acquisition of Oz Minerals. When it comes to large cap pure-play copper exposure, there's only Sandfire Resources. Towards the smaller end of town, names like 29Metals and Aeris Resources have been battered amid persistent operational challenges

Golden Globe Resources – 19 February

At a glance – Golden Globe has acquired four projects (Dooloo Creek & Alma in Queensland, Crossways in Western Australia and Neila Creek in NSW) prospective for gold and copper.

Key details:

• The IPO seeks to raise between $4-6 million at 20 cents per share for an indicative market cap between $40-41 million

• The company holds three projects in important geological terrains that are host to copper and gold mineralisation, including Dacian's Mt Morgan and Newcrest's Cadia

• Flagship Dooloo Creek Project has already been subject to extensive drilling and sampling

• K S Capital were appointed as lead managers. The broker has not led many IPOs. You can check out their recent corporate transactions here

What makes this IPO interesting

• Gold prices are consolidating after rallying to a brief all-time high of US$2,146 an ounce in December 2023. Factors such as peak Fed, disinflation momentum and a falling US dollar are all accommodative for gold prices

• When it comes to gold explorers, its all about exploration momentum. The company says its growing database of geochemistry, geophysics, and drilling has indicated the presence of significant gold and copper mineralisation at numerous targets at Dooloo Creek