24/01/2020 - 11:08

Junior explorers seeking $25m IPOs

24/01/2020 - 11:08

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Perth-based Castile Resources and Kaiser Reef are set to raise up to $25 million ahead of stock market listings next month, despite tough market conditions affecting a number of ASX aspirants.

Junior explorers seeking $25m IPOs
Peter Cook says Castile's assets include a number of polymetallic discoveries, such as gold.

Perth-based Castile Resources and Kaiser Reef are set to raise up to $25 million ahead of stock market listings next month, despite tough market conditions affecting a number of ASX aspirants.

Though some companies have had success, such as Godolphin Resources which listed on the ASX in December, junior explorers Nemex Resources and Metal Hawk are now past their scheduled listing dates, while Virgo Resources has withdrawn its offer.

Castile Resources, a demerger from Westgold Resources, is seeking funds from its initial public offering to unlock the full value of its Rover and Warumpi copper-gold tenements in the Northern Territory.

The projects were previously sidelined by lower commodity prices and competition with Westgold’s other assets, Castile said in its prospectus.

Castile acquired the projects in 2007, the same year it was established.

It demerged from Westgold Resources last month through an in-specie distribution of shares on a one-for-four basis, after gaining 99.9 per cent in shareholder approval.

Castile is led by managing director Mark Hepburn, previously the chief executive of Mali Lithium (formerly Birimian Gold), and Castile chairman Peter Cook, also the Westgold chairman.

Mr Cook said the move to demerge the business from Westgold promoted the potential for the Rover and Warumpi projects to receive closer attention.

“The company’s assets … include a number of exciting polymetallic discoveries and prospects ranging from grassroots to being ready for feasibility assessment,” he said.

The Rover project is located about 80 kilometres south-west of Tennant Creek and the grassroots Warumpi project is situated 300km west of Alice Springs.

Castile is seeking to raise $20 million from its IPO, with an underwritten $11 million minimum subscription, at 20 cents per share.

The float is partially underwritten by Canaccord Genuity.

Mr Cook, through his entity Ajava Holdings, will act as sub-underwriter to the offer for up to $5 million.

The offer, which had been extended from January 10, closed today.

Castile said it was now targeting an ASX listing in mid-late February (previously January 29).

Meanwhile, Kaiser Reef is planning to raise a maximum of $4.5 million from its IPO, through the issue of 22.5 million shares at 20 cents per share, with NSW-based Peloton Capital acting as lead manager.

The offer, which is not underwritten, is due to close on February 12.

Kaiser Reef said the proceeds raised would help fund an exploration program at its gold project in Stuart Town, NSW, located between Newcrest Mining and Alkane Resources’ copper-gold projects.

Kaiser Reef chairman Adrian Byass said the company’s project covered a significant historic goldfield that had limited exploration.

“The board considers that one of the best indicators for a large-scale gold deposit is below a significant historic goldfield that remains largely unexplained,” he said.

The Kaiser Reef board includes: Mr Byass, who is the chairman of Galena Mining and Kingwest Resources; director Jonathan Downes, also a director at Galena Mining, Kingwest Resources and Corazon Mining; and non-executive director David Palumbo, who is the company secretary of QEM, Krakatoa Resources, Rumble Resources and Torrens Mining.

Kaiser Reef is planning an ASX listing for February 27.

In December, West Perth-based Godolphin Resources successfully raised $7.5 million through its IPO, capped at $8 million, with NSW-based Panthea Capital having acted as lead manager to the offer.

Godolphin said the proceeds raised were to fund exploration programs at its gold and copper tenements in south-eastern Australia.

The company began trading on the ASX on December 18.

Meanwhile, Virgo Resources withdrew its IPO and is now seeking a takeover offer to fund its South African copper-gold tenements.

Junior explorers Nemex Resources and Metal Hawk were both due to list on the ASX in December.

Nemex, which was seeking to raise $5 million through its IPO, has recently extended the offer closing date to January 31.

It has not yet appointed a lead manager to the offer.

Metal Hawk, which was planning to raise $5.5 million, was due to list on the ASX on December 12.

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