The Cap Raise Crucible: Big books, broker options and mixed fortunes

The capital-raising conveyor belt kept rolling over the past fortnight, though one monster transaction did most of the heavy lifting.

More than $700 million was chased down across the raising universe, with L1 Global Long Short Fund’s $482.7 million entitlement offer accounting for the lion’s share.

And if the money was concentrated, the broking action wasn’t.

Canaccord Genuity, E&P Capital and Taylor Collison landed the plum roles as joint lead arrangers and joint lead managers to the L1 Global offer, while Ord Minnett, Morgans, Shaw and Partners, CommSec, Bell Potter, MST Financial Services and NAB piled in as joint lead managers.

Further down the food chain, Euroz Hartleys, Petra Capital, GBA Capital, Yelverton Capital, Blue Ocean Equities, 62 Capital, CPS Capital, Discovery Capital, Prenzler and Peak Asset Management all found their way onto tickets.

Some brokers picked up healthy cash fees. Others scored millions of options. Meanwhile, AIC Mines and Kalamazoo Resources showed the broking fraternity wasn’t necessary, pulling in $70 million and $10 million respectively without a broker in sight.

As a corporate hound, getting your name on the tombstone is only half the test. The other is what happened afterwards and whether punters ended up drinking champagne or reaching for the Panadol.

By the October 8 close, results ranged from double-digit losses to spectacular wins, including one placement that briefly more than doubled the new money.

L1 GLOBAL LONG SHORT FUND

Raised: Up to $482.7 million
Structure: Accelerated one-for-two non-renounceable entitlement offer plus shortfall
Price: $1.76
Discount to previous close: 5.9 per cent
Current price: $1.875
Share price versus offer: +6.5 per cent

L1 Global Long Short Fund provided the standout transaction, launching an accelerated one-for-two non-renounceable entitlement and shortfall offer to raise up to $482.7 million.

The $1.76 offer price represented a 5.9 per cent discount to the previous $1.87 close.

But the real eye-catcher was the broking bench. Canaccord, E&P Capital and Taylor Collison sat at the top as joint lead arrangers and joint lead managers, backed by another seven joint lead managers – that’s right – 10 firms around one capital-raising table. Umpire!

The offer was not underwritten and L1 Global wasn’t raising almost half a billion dollars to build a mine or buy an asset. It just wanted fresh ammunition for the fund’s strategy.

Its investment manager argued geopolitical tensions, higher bond yields and AI-driven volatility had thrown up opportunities across sectors, with plenty of stocks trading below its assessment of fair value.

In other words, L1 reckoned the market’s latest bout of turbulence had thrown up a golden opportunity and wanted another $482.7 million in its war chest to take a swing at it. Or perhaps the punters just fancied beefing up their short positions as a hedge against the stratospheric gains chalked up by the hyperscaler heavyweights.

The market gave the monster offer an early tick too, with L1’s offering closing at $1.875 on October 8, leaving placement punters sitting on a tidy 6.5 per cent paper profit straight out of the blocks.

After the soccer team assembled for L1 Global Long Short Fund, the next heavyweight needed only two brokers.

UNICO SILVER

Raised: $60 million
Price: 76c
Discount to previous close: 10.1 per cent
Current price: 67.5c
Share price versus placement: -11.2 per cent

When Unico Silver went hunting for $60 million, brokers Canaccord and Euroz Hartleys duly came back with the full swag.

The placement was struck at 76 cents, a 10.1 per cent discount to the previous close and 10.4 per cent below the five-day VWAP.

Unico now has a pro-forma cash pile of $110 million in pro-forma cash to fund 20,000 metres of drilling across its Joaquin and Cerro Leon silver-gold projects in Argentina, with an updated resource and Joaquin’s maiden prefeasibility study set to land by January 2027.

A definitive feasibility study is pencilled in for completion by the end of 2027, with metallurgical drilling, engineering work and environmental studies set to help pave Joaquin’s path towards a final investment decision.

While the brokers quietly banked $3 million for putting the $60 million away, the market was considerably less enthusiastic.

By October 8, Unico was changing hands at 67.5 cents, leaving punters 11.2 per cent underwater and turning one of the biggest brokered deals of the two weeks into a double-digit aftermarket loser.

And Unico wasn’t alone.

MEEKA METALS

Raised: $42.4 million
Price: 10c
Current price: 8.6c
Share price versus placement: -14 per cent

Meeka Metals rattled the tin at 10 cents a share and punters came charging in, snapping up 424 million shares to deliver a hefty $42.4M payday.

Petra acted as sole lead manager and bookrunner for a six per cent fee on gross proceeds, pocketing an eye-catching $2.5 million.

The cash was earmarked for development of the higher-grade Turnberry underground gold mine at Meeka’s Murchison gold operation, growth drilling, deferred consideration on its Mt Holland gold acquisition and working capital.

The market was far less generous, marking Meeka down to 8.6 cents by October 8 and leaving the new money 14 per cent underwater.

Away from the headline three, AIC Mines and Kalamazoo Resources posted very different results.

AIC raised $70 million at 79.5 cents through a direct strategic placement to Hawke’s Point Resource Finance to help fund its acquisition of Materra Metals’ Mt Cuthbert copper operations in Queensland.

There was no conventional brokered book and no discount. By close of business on Thursday, AIC was trading at 89 cents, putting the eagle-eyed Hawke’s Point 11.9 per cent ahead on paper. Well spotted!

Kalamazoo, meanwhile, pulled off a $10 million raising at 18 cents a share, a whopping 29 per cent premium to its last close. Saudi-led Muqasab SPV Holdings tipped in $7.84 million for a 9.9 per cent stake, while cornerstone investor YT International added $2.16 million. The cash will fund drilling, studies and exploration at its Ashburton gold project. Better still, Kalamazoo also stitched up the deal itself, leaving brokers empty-handed and saving a tidy sum in fees. And with the share price still sitting 20 per cent above the pre-deal close, existing shareholders have plenty to smile about too.

If AIC and Kalamazoo showed you didn’t always need a broker, Mamba Exploration showed what happened when a small-cap book catches fire.

Mamba raised $6 million at 3.8 cents through Canaccord and Yelverton, a 15.6 per cent discount to its previous close but notably a 9.7 per cent premium to its 15-day VWAP.

The pair were entitled to a six per cent fee, while Yelverton is also in line to bag 25 million corporate adviser options exercisable at six cents.

The money backed a near-term 6000-metre reverse circulation program and fresh targeting across its 70 per cent-owned Meeka East copper project, where the Copper Hills and Lady Alma prospects bookend a three-kilometre corridor of historical copper mineralisation.

Mamba emerged from its trading halt with a bang, trading as high as 8.2 cents, a spectacular 116 per cent above the placement price. But you had to be quick. By the October 8 close, it had retreated to 5.3 cents, still leaving thrill seekers sitting on a handsome 39.5 per cent paper gain.

OD6 Metals brought GBA, Petra and Euroz to its $6.92 million placement party to accelerate its Quinn fluorspar project in the US, with Petra also running the book.

The 9.5 cent issue price was a 13.6 per cent discount to the previous close, while the brokers shared fees of up to six per cent on broker-sourced funds and a sweet 12 million 13.3 cent options.

OD6 finished at 9.6 cents, leaving the new money with its nose just 1.1 per cent above water.

Felix Group provided one of the stranger pricing stories, raising $5.54 million and launching a $1 million SPP to bankroll its AI ambitions, fire up its vendor network and give its platform a further polish.

Canaccord ran the book at 3.8 cents– an eye-watering 18.75 per cent premium to Felix’s previous close but a 6.5 per cent discount to its 10-day VWAP… looks like somebody had a sniff but got it wrong.

By October 8 the shares were back at 3.4 cents, putting placement punters 10.5 per cent underwater and turning its unusual premium-to-last-close raising into another double-digit loser.

Then came some serious options firepower.

DorsaVi raised $3 million at 2.2 cents to accelerate its RRAM and sensor technologies alongside a bigger push into humanoid robotics, movement data and physical-AI applications.

62 Capital picked up a six per cent fee plus a hefty 24 million broker options exercisable at 4.5 cents to grease the transaction wheels. The shares finished at 2.3 cents, leaving punters 4.5 per cent ahead.

CPS raised cash for Surefire Resources even more aggressively.

The company’s $2.61-million placement at 1.8 cents will fund work at its Victory Bore vanadium-titanium-iron project in WA, and provide project development and working capital.

CPS collected a two per cent management fee and four per cent placement fee, with a massive 31 million broker options thrown into the mix to ease the burden of getting the money into the till.

For a $2.61 million raise, that was some pretty serious optionality. Surefire’s 1.9 cent close fortunately left subscribers 5.6 per cent ahead.

Peregrine Gold’s $2.25 million placement at 13.5 cents was aimed squarely at putting the drill bit into the ground across its Pilbara portfolio.

The program includes maiden drilling at the Coopers and Carneys iron-ore prospects, follow-up drilling and bulk sampling at its Newman gold project and first-pass drill targeting at its Mallina gold project.

Impressively, Mark Creasy’s Yandal Investments and Lion Selection Group cornerstoned the book, while Discovery collected a six per cent fee plus 2.5 million broker options exercisable at 20.25 cents.

Peregrine finished exactly where the new money came in at 13.5 cents – no champagne, no Panadol and no gain.

EcoGraf returned to the big casino with a fresh $1.175 million placement at 22.2 cents, with Canaccord in the lead-manager’s chair. The money was principally aimed at pushing the company’s Epanko graphite project in Tanzania towards financing. The new stock closed at 24 cents, leaving punters a respectable 8.1 per cent ahead.

The IPO market produced just one new listing, but it gave investors plenty to smile about.

Normandy Minerals hit the ASX boards on October 5 after raising $12 million at 20 cents, with Euroz as lead manager. Euroz collected a six per cent fee plus four million lead-manager options – two million exercisable at 40 cents and another two million at 60 cents.

The company’s projects include the Halleys gold project, which has four mineralised systems and a big 10-kilometre soil anomaly. The company also has its foot on the Halleys District gold project, which hosts multiple high-grade gold prospects and a three-kilometre-long mineralised trend. Both have seen little systematic drilling and sit roughly 130km north of Southern Cross in the WA’s Yilgarn Craton.

Normandy closed at 30 cents on October 8, putting those who placed IPO bets 50 per cent ahead and giving Euroz two very different scorecards for the period: Unico investors reached for the smelling salts while Normandy punters sat pretty.

At the other end of the IPO spectrum, the massive $8 billion Firmus AI data-centre float has reportedly hit the scrap heap after institutional investors baulked at its eye-watering $44 billion valuation. With established data-centre heavyweight NextDC sporting a market capitalisation of just $8 billion, Firmus appears to have pushed the valuation envelope a bridge too far. A timely reminder that even when the cheque books are wide open, investors still know when to snap them shut.

Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au