Welcome to the Market Herald Deal Room’s review of the week’s capital raising activity and this week the biggest raise of $360 million was by Kerry Stokes’-backed BCI Minerals (BCI).
Combined with a $740 million debt facility, BCI’s raise is set to fully fund the $1.2 billion Mardie Salt and Potash Project on the Pilbara Coast of Western Australia.
Kerry Stokes’ private company Wroxby has contributed $110 million and BCI’s also attracted the attention of AustralianSuper which comes onto the register as a new investor with a $75 million contribution.
BCI’s Managing Director Alwyn Vorster said it would be a long-term project with returns still some time away. So why are the big names getting involved?
“Mardie is the first new large-scale salt project in Australia in 25 years,” Mr Vorster said.
“It will be the largest salt project in Australia, it will be the third largest in the world and it will be the first one to produce soil-friendly fertiliser at the site using the waste from the salt circuit.
“So it ticks many of the environmental and ESG-type boxes for investors who are focussed on that for the future.”
The company plans to start harvesting and selling salt in 2024 and sulphate of potash in 2026.
BCI Minerals has a market cap of $288 million and share trade opened this morning at 46 cents.
The $20 million share purchase plan (SPP) opens on November the 26th with shares issued at 43 cents.
Also attracting the attention of ESG Funds this week was Latrobe Magnesium (LMG) which has been working for 20 years towards recycling the brown coal ‘fly ash’ waste produced by Victorian power stations.
The waste will be used to produce magnesium and cement through a process over which it has a worldwide patent.
To fund construction of its initial processing plant in the Latrobe Valley, the company’s raised $11.5 million through a placement.
Latrobe’s CEO David Paterson said there was enormous amounts of brown coal waste to recycle and the next step was constructing a 1000-tonne processing plant.
“From Yallourn (Power Station) alone we estimate we could produce 30,000 tonnes just from that one source for 20 years, so there’s plenty to keep us going,” he said.
“We are running pretty quickly, we have 25 engineers in Melbourne.
“We said we were going to bring jobs to the (Latrobe) valley and we’ve issued four tenders, only for about $1 million worth of work, but they’re all local people so that’s great.”
Latrobe Magnesium has a market cap above $195 million and share trade opened at 12.5 cents today.
An early mover in the hydrogen industry, Global Energy Ventures (GEV) is developing an upstream green energy project on the Tiwi Islands, whilst it continues to pioneer compression shipping technologies for hydrogen.
The company raised $10 million through a placement and its $2 million SPP opens next week.
Managing Director and CEO Martin Carolan said the company hoped to produce hydrogen by 2026.
“GEV’s been known as a midstream transport solution company,” he said.
“We’ve pivoted away from that being our sole business and we’re fully integrated now with production of our own molecules which really controls our own destiny for the monetisation of our export product.”
Global Energy Ventures’ SPP opens on Monday with shares issued at 12.5 cents, just below the opening price on market today of 13 cents. The company has a market cap above $67 million.
There were eight IPOs on the ASX this week, mostly resources companies.
The Deal Room explored a company which is preparing to debut early next month and is in the thick of its IPO raise, Infinity Metals.
Infinity will have the ticker code IMI and is a spin out of the base metals assets of up-coming iron ore company Macarthur Minerals (MIO).
Macarthur Minerals will be the majority shareholder and CEO Andrew Bruton said the new company would have its own technical and geological team.
“The focus for Infinity is really going to be a program of works in the central Goldfields region and the objective of that is to generate cash flows to fund longer term gold and battery minerals exploration and development there and also in the Pilbara region where Macarthur’s assets are located,” he said.
“Gold is doing well, copper’s up 38 per cent year-on-year and lithium’s close to 400 per cent year-on-year, so there’s a lot of potential there.”
To debut, Infinity Metals is raising $10 million with shares at 20 cents.
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