Vancouver-based Resouro Strategic Metals (TSX-V:RSM) is gearing up to list on the Australian Securities Exchange later this week after expanding its horizons beyond the TSX Venture Exchange.
The company, which has rare earths and gold projects in Brazil, closed an $8 million initial public offering at $0.50 per share, giving the company a market capitalisation of $46.1 million on its ASX debut, which is anticipated to be 14 June.
According to Resouro, the IPO closed oversubscribed with support from Regal Funds Management – which manages around $12.2 billion in funds and is a major investor in the resources space, Terra Capital and the billionaire Flannery family.
Speaking to Mining.com.au during a roadshow in Perth this week, CEO Chris Eager says these three big investors, plus a couple of other family offices, hold about 43% of the share register.
However, Eager is still the explorer’s largest shareholder with just over 20% on a fully diluted basis.
Resouro’s rationale for diversifying its listings was the lack of liquidity and the level of arbitrage on the TSX Venture Exchange.
South America-based Eager says he came back to Australia in April 2023 and raised money through Regal Funds Management, Terra Capital and the Flannery Family Office.
“I spoke to a lot of brokers here and during those pre-IPO capital raisings, all the analysts and brokers saw the huge value arbitrage between the TSX and the ASX,” he explains.
“We have a huge range of brokers who are supporting the stock and also the main issue on the TSX is that there was no liquidity whatsoever.”
Eager says Resouro now only has a few Canadian shareholders left after larger investors exited the stock.
“So we expect to take the arbitrage out of the market as soon as we’re trading [on the ASX],” he says.
On the TSX Venture Exchange, Resouro is currently trading around $0.79 (C$0.72), which is a 58% premium over the ASX IPO issue price of $0.50.
“We’re feeling very positive about what will happen after we list,” Eager says.
Eager has previously led listings on London’s secondary AIM market, including Asia Energy which did its IPO at £0.75 ($1.44) and reached £9.10 and Monterrico Minerals, which priced its IPO at £0.52 and peaked at £6 before eventually being taken out by China’s Zijin Mining Group for £94.6 million, or £3.50 per share.
Resouro’s main focus is its 90% owned Tiros Rare Earths and Titanium Project in the Minas Gerais region of Brazil.
The company’s first order of business post-listing will be to complete a JORC-compliant resource for the Tiros Project.
Eager says the maiden resource is expected to be “very large” and the rare earths grade “very substantial”.
Resouro last week released drill results including 13m at 5,512 parts per million (ppm) total rare earth oxides, 1,158 neodymium-praseodymium (NdPr) and 16.73% titanium dioxide from 19m; and 20m at 6,789ppm TREO, 1,570 NdPr and 16.11% TiO2 from 44m.
“The big advantage that we have over other projects is that we have extremely high-grade titanium dioxide with it, around 12.5%,” Eager says.
“We’re just in the final stages of doing the estimation right now. So it could be within weeks.”
Following the closure of the IPO, Resouro is also now funded to complete a preliminary economic assessment.
“So we’re not looking at going back to the market in a hurry and we’ve done enough resource definition drilling to do the work,” Eager says.
“We’ve just mobilised another drill rig just to do some infill drilling for mine planning, but we’re not doing a lot more drilling.”
Resouro, which is also listed on the Frankfurt Stock Exchange, will trade on the ASX under the ticker ‘RAU’.
Write to Angela East at Mining.com.au
Images: Resouro Strategic Metals
