Highlights
- American West Metals has witnessed a lacklustre ASX debut.
- The stock closed first day of trade at AU$0.145 apiece.
- The stock kicked off trading under the code AW1 at 2 PM AEDT.
- The miner raised AU$12 million at an offer price of 20 cents per share
American West Metals (ASX: AW1), an Australian base metals explorer, had a forgettable debut on the Australian Securities Exchange (ASX) on Monday, as the highly anticipated initial public offering (IPO) failed to please investors.
The mining company settled the first day of trade 27% below the listing price, in an otherwise positive broader market sentiment amid easing concerns about the Omicron variant of COVID-19. The ASX 200 benchmark index ended 25.80 points or 0.35% higher at 7,379.30, led by property, energy and mining stocks.
American West Metals nosedives 27% on IPO debut
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The mining stock received a weak response from investors, with shares falling as much as 27.5% to hit an intraday low of AU$0.145, against the offer price of AU$0.20.
The stock began trading at around 2:00 PM AEST, opening lower at AU$0.165 apiece on the ASX. It hit an intraday high and low of AU$0.175 and AU$0.145, respectively.
On the volume front, American West shares saw a spurt in trade as 2.28 million shares worth AU$373.2K changed hands over the counter.
The fall in share price was in contrast with the performance of sectoral subindex – materials, which ended 1.55% higher. Sectoral leaders BHP (ASX: BHP), Rio Tinto (ASX: RIO), and Fortescue Metals Group (ASX: FMG) were among top gainers, rising between 2-3%, despite a correction in commodity prices.
Miner raises AU$12M via IPO
Image source: DenPhotos, Shutterstock.com
Shares of American West Metals were listed on the ASX after successfully raising AU$12 million via its IPO by issuing 60 million shares at an offer price of 20 cents apiece. The offer received strong support from both domestic and international institutional and mining investors.
The company, focused on the discovery and development of high-grade copper and zinc projects across the US and Canada, intends to use the IPO proceeds to execute its exploration strategy.
Commenting on the development, Managing Director Dave O’Neill, said, “We are excited to commence trading on the ASX following a strongly supported IPO. We are wasting no time getting started with exploration activities at our stable of high-quality North American base metals projects already underway.”
“I am grateful to be working alongside an extremely experienced board and management team which includes John Prineas (Chairman) and Michael Anderson (Non-Executive Director),” O’Neill added.
Bottom Line
With Christmas just around the corner, there is a long list of IPOs lined up to join the ASX board. More than 30 companies have filed document to list their shares in the final month of the year, including mining businesses 8 Au (ASX: 8AU) and Armada Metals (ASX: AMM), gold explorer Haranga Resources (ASX: HAR), and Australian traffic management operating company AVADA Group (ASX: AVD).
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