- The global IPO market is shrinking, but there are still pockets raising funds
- There were only 9 IPOs on the ASX this year
- What are the best and worst IPOs in 2023?
The global IPO market has shrunk in 2023 amidst turbulent market conditions and economic headwinds triggered by higher interest rates and a banking crisis.
Certain sectors like energy and mining are still doing better than others, but experts believe the recent Silicon Valley Bank debacle will do so further freeze an already closed IPO market.
The lack of IPOs could create too another headwind for an economy that may already be headed for recession, as the IPO funds raised are typically used to create new jobs.
In the US, IPOs raised just $2.4 billion in 2023, according to data compiled by Bloomberg — a 43% drop from 2022 and a 95% wipe-out from the heady IPO market days of 2021.
On the ASX, there were 87 ASX IPOs in 2022, far fewer than 191 in 2021, but we’ve only seen nine in the first three months of 2023 so far.
| code | Surname | IPO price | current price | To return | market capitalization | IPO dates |
|---|---|---|---|---|---|---|
| PL3 | Patagonia Lithium | $0.20 | $0.20 | 0.00% | $9.8 million | 03/31/2023 |
| LM1 | lioness metals | $0.25 | $0.25 | 0.00% | $9.88 million | 03/29/2023 |
| HTM | high-tech metals | $0.20 | $0.20 | -2.50% | $4.81 million | 01/23/2023 |
| SMOKE | Dynamic Metals | $0.20 | $0.18 | -10.00% | $6.13 million | 01/16/2023 |
| AS | accuse | $4.00 | $3.45 | -13.75% | $86.00M | 12/01/2023 |
| GHY | gold hydrogen | $0.50 | $0.38 | -24.00% | $19.63 million | 01/13/2023 |
| SQX | SQX Resources | $0.20 | $0.14 | -30.00% | $3.25 million | 02/20/2023 |
| solid carbide | solid carbide | $1.35 | $0.79 | -41.48% | $116.86 million | 09/01/2023 |
| ADC | ACDC metals | $0.20 | $0.12 | -42.50% | $5.38 million | 01/17/2023 |
New IPOs in March
It’s worth nothing that two lithium exploration companies made their debuts last week.
LION METALS (ASX:LM1)
Listed March 29, 2023
IPO: $8.0M at $0.25 per share
After an oversubscribed IPO raising $8 million at $0.25 per share, Leeuwin Metals went public on March 29, notably attracting the attention of one of the world’s largest globally diversified resource companies, Glencore.
Drawn by the company’s attractive investment, Glencore has made a cornerstone investment of 9.97% of shares outstanding.
These assets include Leeuwin’s flagship William Lake nickel sulphide project in the world-renowned Thompson Nickel Belt in Manitoba, Canada, with Glencore and Leeuwin establishing a technical committee to leverage the mining giant’s expertise on Canadian nickel.
PATAGONIA LITHIUM (ASX:PL3)
Listed March 31
IPO: $8M and $0.20
We’ve all heard of the Lithium Triangle, the famous salars in Argentina and Chile, where brines provide around 40% of the world’s lithium materials.
Patagonia comes to market with a suite of projects spanning 23km2 in Argentina’s Salta and Jujuy provinces in close proximity to established producers and developers such as Ganfeng, Allkem (ASX:AKE), Lake Resources (ASX:LKE) , Power Minerals (ASX:PNN) and Lithium Energy (ASX:LEL).
The Company plans to conduct follow-up exploration of the properties, raising funds to pay vendor costs, provide working capital and IPO expenses, and approximately $1.725 million. $ to cover exploration expenses including drilling at Tomas III.
best and worst Conducting IPOs in 2023
Nothing special here as every listing this year has either gone down or stayed at the listing price.
The worst-performing stock was ACDC Metals (ASX:ADC), which is down 42% since listing despite completing the discovery drilling component of its aircore drilling program at its Goschen Central Heavy Mineral Sand and Rare Earth Element project in Victoria.
The Company said it would drill 56 holes for 3,162m to deliver a JORC compliant resource in the second half of this year.
“Our initial post-IPO drill program is progressing well on our West Victoria properties as we work toward our first JORC resource,” said CEO Tom Davidson.
“In addition, mineral process testwork in progress at Mineral Technologies confirms that the HMS mineralization at Goschen Central is similar to that of peer companies. We are encouraged that a similar, well-tested process plant design will be suitable.”
VHM (ASX:VHM) is now down 42% from list price.
As reported by Stockhead’s Josh Chiat, VHM’s (ASX:VHM) Goschen Project is special, a shallow multi-commodity project carved for the modern world by geological processes that began millions of years ago.
The Company already has a supply agreement with Chinese giant Shenghe Resources and has total resources of 413,107 tonnes of rare earth oxides.
At a capital expenditure of $500 million, the project could produce 9,428 tonnes of rare earth mineral concentrate or 8,568 tonnes of mixed rare earth carbonate and 134,500 tonnes of zirconium-titania heavy mineral concentrate annually over 20 years at a processing rate of 5 Mtpa.
The mine would cost US$500 million to build but would only be US$57 at an average first decade yield of US$118/t with an NPV of US$1.5 billion and a pre-tax IRR of 44% -dollars per ton are operated.
Listing expected in April
According to ASX, only one company is expected to make its IPO debut in April.
EVERGREEN LITHIUM (ASX:EG1)
Estimated listing: April 11th
IPO: $7M at $0.20
Evergreen’s flagship Bynoe lithium project is adjacent to Core Lithium (ASX:CXO) and its producing Finniss mine in the Northern Territory.
To date, the Company has completed an Ambient Noise Topography (ANT) survey and commenced phase 2 field mapping, soil, rock chip and termite mound sampling at the Bynoe Project and says the soil sampling confirms its view of strong anomalous lithium in soil anomalies along have strike from Finniss.
The Company has also completed an extensive auger program and drilled 1,731 holes at the Kenny Lithium Project with results expected shortly after listing.
EG1 also holds the Fortune Project – also in the NT.
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