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MLG Oz (ASX:MLG) shares rocket 36% on ASX IPO

man holding hard hat and giving thumbs up representing rising mining asx share price
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The MLG Oz Limited (ASX: MLG) share price has made a dramatic ASX debut this morning. MLG shares had their initial public offering (IPO) this morning with a listing price of $1 per share. But in early trading, this brand new ASX share has rocketed 36% to $1.36 at the time of writing after reaching levels as high as $1.40 earlier in the day.

Not a bad way to make an entrance on the ASX as the new kid on the block!

So what is this new ASX share?

Even though it’s only gracing the ASX for the first time today, MLG Oz has been around for almost two decades. It was founded by former truck driver Murray Leahy back in 2002, and today is one of the largest contractors of ‘supply-chain solutions’ for mining companies, particularly in the Pilbara region of Western Australia.

These ‘solutions’ range from quarry products, export logistics and bulk transport and haulage services to crushing and screening of ore. According to a report in the Australian Financial Review (AFR) today, MLG also supplies bulk materials like sand, aggregate, cement and lime from a series of quarries the company owns. It also has a fleet of 925 heavy vehicles.

MLG Oz hits the ASX brick road

MLG works with other ASX businesses like BHP Group Ltd (ASX: BHP), Northern Star Resources Ltd (ASX: NST) and Fortescue Metals Group Limited (ASX: FMG).

According to the AFR, Mr Leahy will retain approximately half of the shares on issue for MLG and will stay at the helm of the business as it transitions into a public company. The report also tells us that MLG has forecast revenues of $241 million for 2020-21,  as well as pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) of $41 million.

Around 82% of the company’s revenues come from the gold mining sector, with another 14% from iron ore industries and the rest from various other base metals.

MLG has also received interest from some high-profile investors. Chris Ellison, of Mineral Resources Limited (ASX: MIN), has reportedly secured a 0.69% stake in the company. Bill Beament of Northern Star also has a position.

At a listing price of $1 per share, MLG Oz had an approximate market capitalisation of $146 million. Going off of the share price the company has climbed to upon debut, however, I estimate its market cap is now sitting at around $196 million.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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