Kaiser Reef Limited IPO Watch: Things you must know

  • Feb 03, 2020 AEDT
  • Team Kalkine
Kaiser Reef Limited IPO Watch: Things you must know

The start of the new decade marks the listing of a junior gold mining explorer, Kaiser Reef Limited (ASX:KAU), the Perth based company which holds an opportunity to acquire the Stuart Town Gold project in New South Wales. This is an exciting project with over 80 recorded historic gold mines and very limited modern exploration. The project is located in a district of New South Wales currently undergoing a renaissance with regional multi-million ounce mines in production or being developed.

The directors, Mr Jonathan Downes and Mr Adrian Byass, from Galena Mining Limited, have taken up this new venture to explore and develop the highly prospective and exciting Stuart Town gold project. The duo has an impressive track record of 6 IPOs with an exceptional return after listing.

IPO Details

The Initial Public Offering (IPO) plans to issue a total of 22,500,000 shares of Kaiser Reef at price of $0.20 per share to raise a total of $4.5 Million. The IPO of Kaiser Reef has closed early and heavily over-subscribed with the tentative listing date of 27 February 2020. The ASX ticker for the company after the listing will be KAU and there will only be a total of approximately 33,500,000 shares on issue making a modest market capitalisation of $6,690,000. This value flow through for tight company is expected to enhance the upside leverage.

Source: Company Source

KAU has appointed Peloton Capital as lead manager to the offer. No brokerage, commission or duty is payable by applicants on the acquisition of Shares whereas the Company would pay the lead manager a fee of 6% for total funds raised in an IPO other than for the funds raised under Chairman’s list, for which Peloton would receive a fee of 1% as coordination fee. PKF Perth has been appointed as the investing accountant and auditor to Kaiser. Steinepreis Paganin is the solicitor to the Company concerning the offer.

Must Read: Kaiser Reef & the Stuart Town Gold Project

The last venture by Mr. Jonathan Downes and Mr. Adrian Byass was Galena Mining which listed on ASX in September 2017 at a price of $0.20 per share and closed the first day with a gain of 20% at a price $0.24 per share. G1A closed at $0.30 a share with an impressive return of 525% as of 16 January 2020. Galena owns significant stakes in Abra base metals project which is approaching its maiden production in 2021.

Galena stock ran so high that the company did a 1 for 5 shares split shortly after listing.

Source: ASX

The Stuart Town Gold property lies between the Newcrest Mining owned Cadia gold operations, Australia's largest gold mine and the Alkane's Northern Molong Belt Porphyry Project which is currently exploring near the recent Boda drill discovery. The proximity to the low-cost Cadia gold-copper operations increases the confidence in the potential for intrusive related gold mineralisation at the Stuart Town property and is among the most prospective areas that need to be explored on the Lachlan Fold Belt.

Capital Structure after the IPO

Following the closure of the offer, the total outstanding shares of the Company shall be 33,450,001(22,500,000 to be issued under IPO, 6,000,000 to be issued as an acquisition compensation, and 4,950,001 already in issue as at the date of the prospectus). The Company shall submit a list of top 20 shareholders to the ASX on completion, with two substantial shareholders, holding either 5% or more shares in the company, likely to be Valiant Equity Management Pty Ltd and Kiandra Nominees Pty Ltd.

Exploration Program

The Stuart Town project area produced gold until the early 20th century and the gap of almost a century present an opportunity for Kaiser to explore and develop the mining property. Sufficient existing geological evidence supports the current understanding of possible gold intrusive mineralisation. Kaiser Reef appointed the Snowden Mining Industry Consultants to present an independent opinion on the historical drilling and geochemical results. The competent person also observed the similarity of the mineralisation with the Resolute's recently sold Ravenswood project. The project is located in a mining-friendly region and enjoys the presence of considerable infrastructure.

Source: Company Source

The company intends to start with the geophysical surveys, which will include detailed, magnetic, gravity and Induced Polarisation techniques. Extensive mapping and scheduled drilling would be carried out at the identified priority targets.

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