Inflation, inflation: What’s your direction - 180 Markets Weekly Wrap
Certainly, one of the biggest market thematic is a return of inflation. We are seeing the spike in housing prices, wage growth, and commodity prices - not to mention the trillions of dollars of debt printed these past 12 months! Interest rates have moved up a quick 50 basis points and investors are taking notice. Over the past decade, investors have become so accustomed to lower (and lower) bond yields that any sharp move is greeted with swift market repercussions.
This trend is now flowing through to capital markets with the likes of this year’s potentially largest IPO, commodity producer 29Metals. The company is offering between A$525.6mn – A$609.1mn and attracting heavy interest due to its diverse portfolio including the base metal juggernaut, copper. In the precious metal department, gold exploration has become rampant as the commodity price is hovering around U.S.$1,900 per ounce. Companies such as Mt. Monger Resources as well as Pacgold Limited are conducting their smaller IPO and will use proceeds to explore their tenement packages in the Mt. Monger region of Western Australia and the Northern Territory, respectively. Despite their differences in market capitalisations, the common factor of these businesses is a hedge against further inflation.
Of course, two other larger trends are technology and gaming as we witnessed large demand for the upcoming mobile online bookmaker IPO, Bluebeat Holdings. The company has shown strong growth via its mobile-led technology platform. Additional news in the wagering space is clearly front and centre with all the news surrounding the potential takeover of BetMakers (ASX: BET) from Tabcorp (ASX: TAH). It remains to be seen the final outcome; however, M&A activity in this space is sure to continue as old-guard companies wish to protect their franchises via modern technology solutions.
Placements of the week
180 Markets raised $4m for Bryah Resources (ASX: BYH) at a price of 7.5c per share. All investors received a free attaching 9c option that will expire in 2023. The raise was many times oversubscribed which is not surprising given the current investor confidence in the copper, gold and manganese sectors. Funds raised will be applied for its extremely busy drilling at the company's Bryah Basin and Gabanintha projects, for sample analyses, technological staff & contractors, remote sensing and metallurgical testwork. Bryah Resources has successfully been granted an allocation of up to $585,000 in JMEI tax credits for the 2020/2021 income tax year. It has been a long time coming since Bryah Reousrces has been fully funded and now they are able to be fully capitalised on their drilling projects. Drill Drill Drill. Previous raises have fallen short and we at 180 Markets were extremely proud to be so heavily oversubscribed.
Wisr Limited (ASX: WZR) raised $50m through Goldman Sachs at a price of 25c per share. In what was another oversubscribed placement, shareholders will receive the opportunity to participate in the raise through a Share Purchase Plan (SPP).
Wisr CEO said “We are very pleased with the incredible demand we have received; the placement results acknowledge the track record of execution we have delivered, and significant support for the Wisr business model and forward outlook. We are delivering a clear competitive advantage through Wisr’s unique position in the consumer finance market and investors are confident in our strategy to redefine what a consumer lending company can be.” "The proceeds of this capital raising will allow Wisr to build a company of significant size, scale and impact in the Australian market. We are very excited for what's ahead in FY22 and beyond."
CZR Resources Limited (ASX: CZR) is raising $7 million at an offer price of 1.15c per new share via a two-tranche placement. This represents a 17.86% discount to the last closing price and a 20.98% discount to the 30-day VWAP. The company also intends to undertake a Share Purchase Plan (SPP) to raise an additional $500,000 at the same price as the placement. Funds will primarily be used for DFS and development planning for the company’s Robe Mesa project.
Artemis Resources (ASX: ARV) raised $7m at 6c per share through Taylor Collison. The oversubscribed placement was done at no discount to the last trade and 5-day VWAP. The company now has $10m in cash, that will be applied to its 2021 drilling campaign at the Paterson Central Gold and Copper project which is adjacent to the Newcrest world class havieron discovery and development in Western Australia. While this is a big discount to the last raise price just one month ago, the company is now fully funded.
Castillo Copper (ASX: CCZ) raised $11.7m through CPS Capital in a 2-tranche placement with 1 for 2 free attaching options. The placement was priced at 4.2c a share and the options can be exercisable at 8c expiring in July 2024. Funds will be used to commence drilling at the ‘Big One Deposit’ and finalise test drill targets for the Arya and Sansa prospects.
Castillo Copper’s Managing Director Simon Paull commented: “Due to strong demand from current and new institutional investors in Australia and the UK, we now have ample funds to ramp up our exploration efforts. Over the next few months, we will test-drill multiple copper targets across the Big One Deposit, Arya and Sansa Prospects within our core Mt Oxide Project."
R3D Resources Limited (ASX: R3D) launched a $4.25 million raise to acquire Tartana Resources, a company that has a portfolio of copper-gold exploration and mining assets in the Chillagoe Region in north Queensland. The acquisition aligns with R3D Resources’ aspiration to become a significant copper-zinc producer through exploring and developing these assets. The offer price is $0.20 per new share with an attaching option on a 1 for 5 basis, exercisable at $0.40 within 5 years from the date of issue. The company intends to relist on the ASX on July the 7th, 2021.
THINKING ABOUT TAKING THE LEAP TO AN IPO? HERE'S WHAT WE KNOW
There are approximately 40 Companies trying to list in the next few months. Clearly, investors have a large variety of companies to pick from. It seems like an overcrowded IPO market is making it very hard for investors to support the continuous line of newly listed companies on market. On a usual day, 180 Markets Investors can get access to 1-2 new IPOs as well as pre-IPOs which are also taking advantage of Investor demand.
In what was a disappointing listing, Keypath education (ASX: KED), which was offered at $3.71, closed its first day trading on the ASX at a price of $3.55. It has since drifted down to $3.35 (as of midday Friday).
It was pleasing to see a company re-list at a massive premium, Cervantes Corporation Limited (ASX: CVS) raised money at 0.3c which came with free options in an extremely successful RTO. The company will now be cashed up and will focus on its Primrose Gold project in Western Australia. This confirms the large amount of demand for blue sky projects and forward-looking RTOs.
Butn Limited is raising money for a listing through Canaccord
Genuity at a price of $0.50 per share. The company is looking to raise $20m
and is fully underwritten by the lead manager. The proceeds of the offer will
be used to fund an investment in Butn’s core business model, access new markets
and produces as well as repayment of related party loans. Butn is an Australian
Fintech company and focuses on B2B working capital. The company has financed
over $500m worth of transactions since 2015. They usually take a fixed funding
fee of between 2-5%. Butn has recently launched its fintech solution digitising
and automating the whole B2B funding transaction process.
180 Markets, for investors by investors
10 stocks mentioned
Greg is Co-founder of 180 Markets which gives access to Australia's hottest IPOs and Placements. Previously Greg has spent over 20 years as a professional hedge fund investor, including with P Schoenfeld Asset Management and Credit Suisse, in...