IPO

Upcoming IPOs for the week: Silica, cobalt and gold explorers

Mon 02 May 22, 9:54am (AEST)
IPO 12 - Businessman hand holding IPO (Initial Public Offering) word with wooden cube block
Source: iStock

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Key Points

  • 7 IPOs this week
  • Several gold explorers will debut throughout the week
  • Non-exploration listings include Equity Story (financial services) and Chrysos Corp (gold assay machines)

Every Monday, Market Index reviews the upcoming IPOs for the week.

All time is quoted in Australian Eastern Standard Time. The * indicates an indicative listing date.

Monday

Allup Silica

  • Silica sand explorer

  • Raised $5m at 20 cents per share

  • Lists at 11:30 am

Allup Silica (ASX: APS) holds twelve licences located in WA. The region has a history of silica exploration, some of which falls within the project tenement area.

Interestingly, silica sand exploration differs from typical metals exploration as silica sand is generally found at or near surface to depths no greater than 20-30m.

Most tenements are early-stage exploration targets, meaning near-term catalysts will include activities such as field reconnaissance, sampling, geochemistry surveys and studying historical exploration data. 

There could be some hype coming into this IPO as silica has applications for industries including construction materials and battery storage.

Sarama Resources

  • Gold exploration

  • Raised $8m at 20 cents per share

  • Lists at 12:30 pm

Sarama (Resources (ASX: SRR) is a gold explorer with two projects located in one of West Africa’s most prospective and prolific gold belts.

The company's Sanutura Project is considered highly prospective, with an already high-grade component to its resource.

  • 0.5m ounces at 2.5g/t (indicated)

  • 1.8m ounces at 1.9g/t (inferred).

The company said its key focus is to: 

  • Determine how large the project can get

  • Identify additional regional greenfield targets 

  • +50,000m drill program to commence post IPO

2022-04-28 16 24 17-PowerPoint Presentation
Source: Sarama Company Presentation (March 2022)

Solstice Minerals

  • Predominately gold exploration

  • Raised $5m at 20 cents per share

  • Lists at 11:00 am

Solstice Minerals (ASX: SLS) is a spinoff of OreCorp's (ASX: ORR) WA exploration assets.

These WA assets comprise four projects: Yarri, Kalgoorlie, Yundamindra and Ponton. The assets are prospective for gold, with the Kalgoorlie Project also prospective for nickel.

The company believes the historically intercepted nickel sulphide mineralisation at Kalgoorlie has not been adequately tested, with significant gaps in drill coverage.

Tuesday

Equity story*

  • Financial services

  • Raising $4.5m at 20 cents per share

  • Lists at 11:00 am

Equity Story (ASX: EQS) provides stock market trading advice, research and investor education services. The company currently has around 1,200 subscribers and a broader database of 40,000 investors. The Group generated roughly $1.3m revenue in FY21.

Sierra Nevada Gold*

  • US-based gold explorer

  • Raising $10m at 50 cents per share

  • Lists at 11:30 am

Sierra Nevada Gold (ASX: SNX) operates 5 gold projects in Nevada, US.

Nevada is the fourth largest mineral producing jurisdiction in the world and the largest gold producing state in the US.

Sierra said that its Blackhawk Project had previously returned "bonanza grade" precious and base metal rock chips from an epithermal vein system.

The Blackhawk Project is viewed to have all the potential to host a world-class sized gold deposit. The company has plans for an aggressive drilling program to commence upon listing.

The prospectus stated that Sierra "is proposing an aggressive program of drilling, geophysics and geochemistry leveraging off its already developed target pipeline. In the first twelve months after listing Sierra Nevada proposes to drill test its highest ranked epithermal targets and its six highest ranked porphyry targets."

2022-05-02 09 10 20-Window
Blackhawk Project location (Source: Sierra Nevada Gold Prospectus)

Note: Lead manager for the IPO - Bell Potter - will be granted 1.78m options

Wednesday

Koba Resources*

  • Cobalt, copper and gold explorer

  • Raising $8m at 20 cents

  • Lists at 11:00 am

Koba Resources (ASX: KOB) will operate five US-based projects with a focus on cobalt.

Project summary:

  • Blackpine Cobalt-Copper Project, Idaho, US

  • Colson Cobalt-Copper Project, Idaho, US

    • Also seen historic mining in the 60s and 70s

    • "All permits are in place to undertake a drilling program"

  • Panther Cobalt-Copper Project, Idaho, US

    • Actively explored area between 2017-18

    • Project areas returned high-grade assays from rock chip sampling

    • Company plans to undertake additional sampling and mapping to further define targets for geophysics and drilling, if warranted

  • Elkhorn Cobalt Project, Idaho US

    • Early stage

  • The Goodsprings Copper-Cobalt Project, Nevada, US

    • Early stage

This could be another hype IPO given the recent performance of cobalt names like Cobalt Blue (ASX: COB).

Note: Joint lead managers - Euroz Hartleys and Peloton Capital - will be entitled to receive 3m options

Thursday

None

Friday

Chrysos Corporation*

  • Gold exploration machines

  • Raising $183.5m at $6.50

  • Lists at 11:30 am

Chrysos Corporation (ASX: C79) is a gold mining analytics company, manufacturing assay machines and leasing them to miners under long-term contracts.

You can read more about the company here.

Do broker options matter?

Put yourself in the shoes of a broker.

They're typically paid a % fee based on the size of the IPO and responsible for issuing the offer document, allocating shares to institutional investors/clients and the broader distribution of shares.

If the broker is receiving some skin in the game - in the form of options - they have an incentive to make sure the IPO doesn't just float, it swims. This could include additional support like marketing, promoting the IPO to clients to attract more funds/an oversubscribed raise, research coverage etc.

That isn't to say the IPO will be a guaranteed success. But its good to know that the lead managers are aligned with delivering shareholder value.

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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