Battery minerals companies are among the best performing IPOs of 2021-2022. At the Paydirt Battery Minerals Conference in Perth, 12 of the 52 presenters have listed on the ASX since January 2021, reflecting the outstanding growth and investment opportunities in the sector.
Global Lithium (ASX: GL1) was the second-best performing float of 2021. The company raised an initial $10 million through its IPO and traded at 28¢ per share on its debut. Today it is worth about $500 million, and shares are trading at $2.50 per share at time of writing – up 793% since listing.
The company is developing two lithium projects, its flagship Marble Bar project in the Pilbara and the Manna project in the Goldfields. The company has a combined maiden Inferred Mineral Resource of 18.4Mt at 1.04% lithium on a 100% basis.
Mineral Resources (ASX: MIN) recently took a 5% stake in the company, injecting $30 million and bringing its industry-leading experience in the development of lithium projects in WA, and lithium giant TA&A has already secured 30% of the offtake from the Marble Bar project.
Global Lithium executive director Ron Mitchell told delegates the company had an outstanding performance in its IPO and had continued that momentum into the first quarter.
“The share price is performing really, really well,” he said.
“We’re cashed up to start our drilling campaigns and additional study work, we have almost $40 million in the bank.”
Mr Mitchell said that the demand for lithium spodumene was unlike anything he had seen in the last decade.
“This market is tight, tighter than I have ever seen it. We need more and spodumene and we can do it,” he said.
“We can get first tonnes to market, post FID, in two years… Industry prefers the chemicals made from spodumene concentrate.”
Cannon Resources (ASX: CNR) was spun out of Rox Resources (ASX: RXL) mid-2021 to develop its flagship Fisher East nickel project and the Collurabbie project in the northeast goldfields of WA.
The company began trading at 30¢ per share with a $15m market cap. At the time of writing the company was trading at 40.5¢ per share and worth $35 million – about 40% more since its debut.
Company chief executive Stephen Lynn said that while the share price was strong, there is still plenty of upside for investors.
“We were in the top 10 IPO’s for last year,” he said.
“We were very lucky we came to the ASX with Resources in the ground. Real nickel in the ground that is expandable in our view.”
This week, the company announced a maiden nickel Resource at the Sabre deposit that bumped up the overall Fisher East Resource to 116Kt tonnes of nickel across the four deposits.
Mr Lynn said that Fisher East has four deposits across an 8km section.
“They’re all on the same contact, all completely open at depth, open laterally and open internally,” he said.
“We only have market cap of $35 million… this is a very good and attractive investment opportunity.”
Fellow WA nickel play, Lunnon Metals (ASX: LM8) also listed mid-2021. The raised $15 million in its IPO and listed at 42¢ per share. At the time of writing, the share price was trading up 126% at 95¢ per share.
Lunnon owns the Foster and Jan nickel mines in Kambalda – about 50km from Kalgoorlie – that are sitting on a 39kt @3.2% nickel JORC Resource.
Company managing director Ed Ainscough said that the Foster and Jan mines, and the belt they sit within, were locked up for years within the tenure of South African gold giant Gold Fields’ St Ives gold mine.
“The value proposition they missed in the last nickel boom is what we took to the IPO,” he said.
“We have three firms already covering us and just last week Foster Stockbroking covered us and recommended us at $1.50 per share.”
The exploration program has delivered some unexpected wins at the Baker deposit.
Mr Ainscough said that recent results showed high grade, near surface nickel at Baker that had potential portal access 350 metres away though the existing open pit.
“The geology gods are smiling on us,” he said.
“We’ve drilled 21,000 meters since IPO, we were targeting 28,000m for the first year. The reason we have overachieved is because of the Baker discovery and where it sits.”
ASX newcomer ChemX (ASX: CMX) listed on 17 January 2022 after a $7 million IPO at 20¢ per share. At time of writing, the company was trading at 26.5¢ per share, up 28% in the short time since it made its debut.
ChemX is developing a unique High Purity Alumina (HPA) technology, and exploring the Kimba kaolin-halloysite and Jamieson Tank manganese projects in the Aire Peninsula in South Australia.
Company managing director David Leavy said that manganese was the unsung hero of battery metals, and HPA – which was recently added to the Federal Government’s critical minerals list – followed closely behind it.
“The share price has held up very well and we had a strong institutional and strategic backing,” Mr Leavy said.
The company is currently building a micro plant using its unique HiPur technology to process HPA. It expects the micro plant to be complete in April which will allow the company to begin the qualification process with buyers, and a pilot plant to be built in 2023.
“Critical minerals is a very exciting space to be in. The technology developments that are happening and the changes in supply chain are all opening up opportunities. Our strategy is to take advantage of those opportunities on top of the opportunities we already have,” he said.
Conference presenters that listed on the ASX since January 2021 included:
- Evolution Energy Minerals – ASX: EV1
- Winsome Resources – ASX: WR1
- Green Technology Metals – ASX: GT1
- Leo Lithium – Prospectus lodged
- Lunnon Metals – ASX: LM8
- Cannon Resources – ASX: CRN
- Global Lithium Resources – ASX: GL1
- ChemX Materials – ASX: CMX
- Lithium Energy – ASX: LEL
- Firebird Metals – ASX: FRB
- NickelSearch – ASX: NIS
- Charger Metals – ASX: CHR