It is official. After years of a subdued if not empty IPO pipeline, new floats are proving more popular than a holiday caravan spot in Shark Bay in WA’s North.
And dish up a dollop of exploration quality like ASX newcomer Coda Minerals (ASX: COD) has done, and investors are voting with their feet – by marching in.
Having listed on Wednesday following a quickly oversubscribed IPO priced at 30c a share, Coda ended its first day as a listed company at 44¢, then soared as high as 51¢ before ending the week at 43¢.
A bit like its seasoned ASX peer VRX Silica (ASX: VRX), which has enjoyed a rerating over the past week on the back of its own successes, Coda appeals for its exploration focus on copper in a part of South Australia that is home to industry giants BHP and OZ Minerals.
More on Coda in a minute but sharing some of the market thunder this week was VRX, which in the space of eight days was able to tell investors that native title arrangements over its Arrowsmith silica sand project 300km north of Perth had been sorted and then followed up with news of the grant of a mining lease for the Muchea silica sand project, on Perth’s north-eastern outskirts.
VRX shares were trading at 12.5¢ on the eve of the Arrowsmith announcement but by last night had jumped to 19¢ on these milestone advances.
The focus for VRX now is to step up talks with silica sand customers and project financiers and progress other approvals.
Coda was formerly a subsidiary of Gindalbie Metals before being demerged in July last year when Gindalbie agreed to be taken over by its Karara magnetite joint venture partner Ansteel.
Coda was set up as a special purpose vehicle to farm in and acquire up to 75% of the Elizabeth Creek copper project in South Australia. To date, Coda has spent more than $5.6 million on drilling, metallurgy and geotechnical work to significantly de-risk the project and take its ownership to 51%.
Elizabeth Creek covers 739sqkm in the Olympic Dam Copper Province, Australia’s most productive copper belt. It is located 135km north-west of Port Augusta, just 15km south-west of BHP’s exciting Oak Dam West copper discovery and 50km west of OZ’s Carrapateena copper-gold project.
After raising $8.5 million in an IPO managed by CPS Capital, Coda had close to $13 million in cash as it kicked off the latest drilling Elizabeth Creek campaign focused on the Emmie Bluff prospect.
“We were delighted to receive so much support in our heavily oversubscribed IPO,” Coda chief executive Chris Stevens said.
“The funds raised will allow us to undertake an ambitious exploration program at Elizabeth Creek and we have hit the ground running. Drill rigs arrived on site ahead of schedule in mid-October.
“Drilling has commenced at our priority target – the Emmie Bluff deposit in the north of the Elizabeth Creek copper project area.”
Emmie Bluff is an underground target, with the top of mineralisation sitting at a depth of about 400m.
Mr Stevens said Emmie Bluff was defined as a priority in late 2019 following extensive reinterpretation through two forms of geophysical surveys. Although already of potentially significant scale, geophysical interpretation shows the potential for massive extensions to the south and also to the east and west of the existing drill-backed mineralisation.
Coda has identified other Zambian-style mineralisation targets including Hannibal, which is a potential repeat of Emmie Bluff, and Powerline as well as iron oxide copper gold targets Chianti, Elaine, and Elizabeth North. It intends to drill all of these prospects over the next 18 months.
As well as the exciting potential of Elizabeth Creek, investors were no doubt buoyed by the positive sentiment enjoyed by the broader copper sector.
In 2021 and 2022, a gradual lift in economic activity is expected to support copper usage. World copper consumption is forecast to reach 25 million tonnes in 2022, up an average 2.9% annually.
