A series of gold-sector capital raisings has left investors nursing losses while brokers secured lucrative mandates, with eight of the ten stocks examined trading below their issue prices on Friday morning.
Argonaut Securities was involved in two of the largest transactions, helping to raise $180 million for Wiluna Mining and a further $45 million for Ballard Mining. Other brokers, including Canaccord Genuity, Barrenjoey Markets, Taylor Collison and Euroz Hartleys, also secured roles in a busy fortnight for Australian-listed companies.
The deals highlighted the sharply different outcomes that can follow a discounted placement or initial public offering. While some shareholders recorded substantial early gains, several companies fell below their offer prices soon after the money was raised.
Gold-sector capital raisings leave investors below issue price
Wiluna Mining’s $180 million return to the Australian Securities Exchange was the largest transaction under review. Barrenjoey and Argonaut acted as joint lead managers, with CommSec as co-manager.
The company issued shares at 65 cents to support its next phase of development. By Friday morning, however, the stock was trading at 50.5 cents, 22.3 per cent below the issue price, after closing its first session at 56 cents.
The transaction included a budget of $8.5 million for joint lead-manager fees, including third-party advisers, as well as 5.24 million three-year broker options exercisable at 84.5 cents.
Argonaut also worked with Canaccord Genuity on Ballard Mining’s $45 million placement, with CommSec again acting as co-manager. The companies placed 68.2 million shares at 66 cents, a 7.7 per cent discount to the previous closing price.
Ballard said the proceeds would fund studies, early works and infrastructure planning at its Mt Ida gold project in Western Australia. A share purchase plan was intended to raise another $5 million, with capacity for a further $5 million in oversubscriptions.
Its shares were changing hands at 60.5 cents on Friday morning, leaving investors 8.3 per cent below the placement price.
Torque Metals raised $25 million through a placement managed by Canaccord and Euroz Hartleys, with Morgans as co-manager. The shares were issued at 19 cents to support the Ritz gold project south-east of Kalgoorlie, but had fallen to 16.5 cents, a decline of 13.2 per cent.
Taylor Collison led Maronan Metals’ $20 million placement at 40 cents, with the proceeds earmarked for drilling, engineering and permitting at its Cloncurry silver-lead-copper-gold project in Queensland.
The deal still required shareholder approval on November 4. Maronan was trading at 38.5 cents, below the proposed issue price, making the fundraising a conditional commitment rather than a completed transaction.
Broker fees rise sharply in smaller floats
The most substantial fee packages relative to the money raised appeared in smaller initial public offerings and placements, where brokers received combinations of cash, shares and options.
Identifai Genetics raised $10 million at 20 cents for its October listing, appointing Aesir Corporate as lead manager. Aesir received a six per cent cash fee worth $600,000, alongside 10,154,970 options exercisable at 25 cents and expiring in April 2029.
The options were valued at about $899,000 in the prospectus, taking the estimated cash and options package close to $1.5 million, or roughly 15 per cent of the funds raised. Identifai was trading at 49 cents on Friday morning, 145 per cent above the issue price.
Europa Metals raised $4 million at 20 cents ahead of its October 16 listing, with GBA Capital acting as lead manager. The broker received a $240,000 cash fee and five million options exercisable at 30 cents until October 2028.
The options were valued at about $561,000 in the prospectus, putting the combined package at approximately $801,000, equivalent to about 20 per cent of the funds raised. Europa’s shares were trading at 19.5 cents, leaving investors 2.5 per cent below the issue price and the options out of the money.
Cooper Metals agreed fees and securities for two smaller fundraising transactions. Veritas Securities and Prenzler Group jointly managed a $2.15 million placement, receiving a six per cent fee and four million broker options.
Veritas also fully underwrote a $2.7 million entitlement issue, attracting another six per cent fee, six million options and six million facilitation shares valued at $450,000 at the 7.5-cent issue price.
Using the issue price, the cash fees and facilitation shares were worth more than $741,000 before assigning a value to the options. The securities package required shareholder approval. Cooper was trading at 7.2 cents on Friday morning, four per cent below the issue price.
Amaero investors move into profit
Amaero International was one of the two stocks in the review trading above its offer price. The company raised US$20 million, equivalent to A$28.7 million, through a US public offering led by Baird, with Lake Street Capital Markets as additional bookrunner.
Underwriting discounts and commissions totalled US$1.4 million, or seven per cent of gross proceeds. The underwriters also received a 30-day option to buy a further 705,882 shares, potentially raising another US$3 million before expenses.
Amaero issued 4.71 million US common shares at US$4.25 each, equivalent to 15.22 Australian cents per ASX CDI. The funds were intended for manufacturing equipment, working capital and research.
Its CDIs were trading at 19 cents on Friday morning, putting investors 24.8 per cent above the offer price.
The remaining transactions produced more modest or negative results. Azzuro Resources raised $3.06 million through a strategic placement to Hong Kong-based Kerry Resources Logistics at 1.5 cents per CDI, a seven per cent premium to the previous close.
Kerry was expected to hold about 19.9 per cent of Azzuro and could nominate a director. The company’s shares were trading at 1.4 cents, 6.7 per cent below the placement price, although no broker fee was attached to the deal.
Recharge Metals raised $4.13 million through a placement jointly managed by Canaccord and Ord Minnett. Broker fees of up to five per cent applied, while the funds were intended for the Sunset Well gold and Brandy Hill South copper-tungsten projects.
Recharge’s shares had fallen to 3.2 cents, 11.1 per cent below the 3.6-cent issue price.
The transactions also included the $20 million placement for Maronan Metals and the smaller Cooper Metals fundraising, leaving the period marked by sizeable broker remuneration, extensive use of options and a generally weak immediate aftermarket for investors.
