ASX Mining Capital Raisings Hit $687.5M as Canaccord Leads With 9 Deals
Synopsis
ASX Mining Capital Raisings Hit $687.5M as Canaccord Genuity Leads Nine Deals While FireFly Metals Grabs Biggest Single Raise
Key Highlights
- 35 companies raised a total of $687.5 million in late August and early September.
- FireFly Metals raised the highest single amount of $190 million,
- Eureka Group Holdings priced its raise above market price but still received solid demand,
- New arrivals, 3 new companies listed on the ASX during this period all opened well.
In late August and early September, Australia’s mining and resources companies raised $ 687.5 million from 35 separate deals. Of the transactions, Canaccord Genuity was the most active bank with approximately $380 million in an advisory capacity on nine of them. The funds are earmarked for mine development and drilling, acquisition of other companies and day-to-day operational expenses.
Despite some parts of the market struggling, the rush for cash shows that investors are still keen to support mining and resources projects.
Key Numbers
- $687.5 million - total capital raised
- 35 - number of deals
- 9 - Canaccord Genuity-led deals
- $380 million - Amount Canaccord’s deals are valued at
- $190m - biggest single raise, by FireFly Metals
The Big Raises
FireFly Metals topped the period with $190 million pulled in. Which includes A$150 million in a placement to institutional investors in Australia, around A$30 million from Canada and a further A$10 million offer to small shareholders which is still being processed. Funds raised will go toward FireFly’s Green Bay copper and gold project in Canada. Although shares were offered at only a 6.3% discount, the stock has climbed slightly since then.
PC Gold raised A$77 million, largely from institutional types and A$75m institutional placement through its own directors. And it will have some funds for drilling and underground activities at its Spring Hill project in the Northern Territory. The stock has remained just a tick above the price it sold shares at.
Eureka Group launched an A$80.2 million entitlement offer at A$0.615 a share, only slightly above its previous market price. Institutional shareholders took up 95.1% of their entitlements. The funds will be used to buy a New South Wales portfolio of properties for the company. Eureka’s shares have also risen above the offer price since then.
Combined, these three raises constituted over 50% of all capital raised across the full period.
Winners and Losers
Not every raise went smoothly.
- Broken Hill Mines raised A$90 million at a 10.1% discount to its previous closing price, but its shares subsequently traded below the placement price.
- Discounts of about 12–14% helped Andean Silver and Falcon Metals from dropping below what investors had paid for their stock, but the lower rates were not enough to get stocks above their offering prices.
- The up side of those things is that some smaller raises performed impressively. Sierra Nevada Gold’s shares also traded above the A$0.10 placement price, reaching A$0.13 by September 2 Investors also saw gains of better than 30% in Mount Ridley Mines and Critical Resources.
- Almasar Minerals also enjoyed a strong debut, closing its first day around 28% above its A$0.20 IPO price, while Powerhaus Uranium finished its first session 15% above its A$0.20 issue price.
Why It Matters
The amount of money flowing into mining in such a short space has investors undeterred from the sector, despite a somewhat choppy period for some commodities. Cash raised by companies is generally being spent on growing their projects themselves, through additional drilling, further development and, in some instances, acquisitions of other assets.
Also, the mixed results illustrate that the market does not treat every raise equally. Larger, more established companies such as Broken Hill Mines and Andean Silver also had to provide bigger discounts with their subsequent public offerings yet suffered falls in share price. While smaller and newer names, including those in their initial public offering (IPO) phase, attracted strong demand and rapid appreciation. This tells you that investors are getting picky, chasing suitable stories they have belief in, rather than putting cash at anything with a mining ticket.
Source: The West
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
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