Welcome to The Market Herald Deal Room’s Friday review of this week’s capital raising activity.
On Thursday, West African Resources (WAF) announced it had secured $126 million through a placement at $1.25 per share — a discount of about 10 per cent. A separate Share Purchase Plan will open on November 8 as the company looks for another $10 million.
WAF, which has a market capitalisation in excess of $1.1 billion, wants to pay down debt and acquire a gold deposit in Burkina Faso.
Executive chairman Richard Hyde said the company planned to produce 400,000 ounces of gold annually from 2025.
“With the addition of Kiaka to existing operations, WAF aims to be a plus-400,000ozpa gold producer by 2025,” Mr Hyde said.
The company’s shares were trading this morning below $1.30 each.
Mighty Craft (MCL) is a company which has been building a portfolio of premium craft beer and spirit brands.
Also on Thursday, Mighty Craft raised $5.8 million in a placement of 20 million shares at 29 cents apiece.
The company plans to use the funds to build its whisky business, but Managing Director Mark Haysman also admitted COVID-19 lockdowns had been difficult and it needed to bolster its bank balance.
“COVID obviously has been a real challenge over the last 18 months, the on-premise and venues is sort of 35-40% of our revenue and we’re only just starting to come out of that COVID impact now,” he said.
“This placement has really been about giving us the flexibility to go forward and really accelerate our whisky strategy now, but also to just give us a bit of cover as we recover from COVID to make sure that we can trade strongly through the summer period and protect ourselves from any aftershocks that may occur at short notice.”
The full interview with Mr Haysman will be uploaded here at The Deal Room early next week.
Mighty Craft has a market cap of $96 million, with its shares opening at 32 cents this morning.
In the wake of announcing some high grade results from drilling for gold at its El Zorro project in Chile, Tesoro Resources (TSO) raised $4.3 million through a placement on Wednesday and has its sights set on another $3 million through a share purchase plan.
Tesoro’s Managing Director, geologist Zeff Reeves, said the financing brings the company’s cash reserves to $14.8 million.
“We’ve got over 70,000m of drill holes into this deposit,” he said.
“This funding will really enable us to push on with all that work and keep that exploration momentum up.”
Tesoro’s share purchase plan opens on November 8, with shares to be issued at 8.5 cents each. The company has a market cap nearing $52 million and opened below the issue price at 8.4 cents this morning.
Identitii (ID8) provides software to help banks and financiers meet complex regulatory compliance obligations.
As it looks to widen its customer base, it’s raised $6 million through a placement and will launch a rights issue on Thursday next week in a bid for another $3 million.
CEO John Rayment said the funds would boost sales and marketing activities to increase the company’s flow of recurring revenue.
“That’s the beauty of a software business, particularly in the financial services industry, you make one handshake, or you get one connection, you get one contract with a large financial services business and then you are, in some cases, embedded into their technology and then you have a long-term relationship with annualised recurring revenue,” Mr Rayment said.
“The job for us in this business is to secure more of those relationships, and then once we have those relationships, grow that revenue per customer by adding more products and more features to our platforms.”
The rights issue will offer shares at 16 cents each. The company has a market cap above $27 million and its shares opened at 18 cents this morning.
There were three IPOs this week, including Eastern Metals (EMS), which listed on Monday after raising $6 million.
The company has three projects in New South Wales and the Northern Territory which were established by Kidman Resources (now owned by Wesfarmers) covering copper-gold, zinc-silver and lithium.
The IPO saw shares issued at 20 cents each, which opened on the ASX today at 23 cents.
The Deal Room also looked at Alvo Minerals (ALV) which had a strong debut on the market, trading above the IPO issue price of 25 cents. The company was straight into drilling in central brazil, where it’s hunting copper and zinc.
Managing Director Rob Smakman said the asset in Brazil had attracted significant interest.
“It’s a project that was discovered in the 70s and it hasn’t been touched for nearly forty years,” he said.
“It’s quite rare to get hold of an asset with so much exploration potential, a known resource, and I think all those factors together are really the ones that are really driving the potential for the project and the company.”
Alvo has a market cap of $31 million and opened today with shares at 34 cents.
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