Cobre to list on ASX after heavily oversubscribed IPO

Cobre ASX IPO CBE base metals mining resources
Cobre has raised $10 million to list on the ASX and advance exploration at its Perrinvale base metals project in Western Australia.

Base metal explorer Cobre is preparing to join the ASX after raising $10 million through a heavily oversubscribed initial public offering in a bid to advance exploration at its Perrinvale project in Western Australia.

The Sydney-based company will issue 50 million shares at $0.20 each to investors, indicating a market capitalisation of about $19.36 million on completion of the offer.

Cobre plans to use the majority of the raised funds for the continued exploration of volcanogenic massive sulphide (VMS) deposits at Perrinvale.

Speaking with Small Caps, Cobre company secretary Justin Clyne confirmed the heavily oversubscribed IPO and said the company is now in the “stages of meeting final requirements with the ASX’s pre-quotation disclosure”.

He said Cobre is yet to be notified of the precise listing date but the company is “confident” its listing will be “sometime this month”.

Upon listing, the company will trade under the ticker ‘CBE’.

Perrinvale exploration plans

Cobre holds an 80% stake in Toucan Gold, which owns the Perrinvale project in WA’s goldfields region.

A maiden 1,000m reverse circulation (RC) drilling program conducted in June 2019 intersected very high-grade VMS base metal and gold mineralisation at shallow depth, including 5m at 9.8% copper, 3.2 grams per tonne gold, 34g/t silver and 3.1% zinc.

Toucan has outlined a two-year exploration budget to include geological studies, surface geochemical sampling, rotary air blast and aircore drilling, RC drilling and diamond core drilling, as well as geophysical surveys.

In Cobre’s prospectus, it said more than 60% of this two-year budget is allocated to RC and diamond core drilling to test targets including the conductor on the north side of the Ponchiera prospect and to confirm historic results at the Zinco Lago prospect.

Cobre executive chairman and managing director Martin Holland said the company planned to apply the majority of the IPO funds “primarily to drilling, geophysics and geological studies to progress the Perrinvale project”.

In its prospectus, Cobre has earmarked over 70%, or close to $7.5 million, of its total funds for exploration, with another 22% allocated to working capital and the remaining 7% covering expenses of the offer.

“With drill targets interpreted and modelled by geophysicists, the Cobre team is poised to implement its ‘money in the ground’ strategy at the Perrinvale project and is looking forward to executing its exploration programs expeditiously across both the Perrinvale and Sandiman projects,” he said.

Mr Holland has also tweeted that diamond drilling at Perrinvale will commence “straight after listing”.

Sandiman farm-in

In addition, Cobre has secured an earn-in joint venture in the Sandiman tenement, located in WA’s Upper Gascoyne region.

The company believes this project may have the potential for sediment-hosted base metal mineralisation and plans to confirm this through systematic exploration including detailed surface mapping, sampling and mineralogical studies.

Under Cobre’s proposed two-year exploration budget, $610,000 of the near $7.5 million has been allocated for the Sandiman project.

Major investor

In mid-2019, Cobre secured a cornerstone investment from UK metals investor Metal Tiger (LON: MTR) for a minimum of $2 million.

Under a binding term sheet, Metal Tiger committed to an initial $500,000 investment with plans to invest a further $2 million in 2020, taking its total holding in Cobre to almost 20%.

In a statement released by Cobre at the time, Metal Tiger chief executive officer Michael McNeilly said his company was “delighted” to see “rapid progress being achieved at the world-class Perrinvale copper project”.

Metal Tiger also holds strategic investments in other copper explorers including Botswana-focused MOD Resources, which was acquired by Sandfire Resources (ASX: SFR) in October, and Thor Mining (ASX: THR), which holds tungsten and copper projects in Australia and the US.

Holland International Pty Ltd, as trustee for the chairman’s Holland Family Trust, is also expected to hold 11.39% of Cobre shares upon ASX admission.