The Forrestania Resources Ltd (ASX: FRS) share price is taking off on the company's ASX debut.
Forrestania is in the business of mineral exploration and development. It's focused on gold, lithium and nickel in Western Australia.
It owns 3 projects: the Forrestania Lithium, Gold, and Nickel Project; the Southern Cross Gold Project, and the Leonora Gold Project.
Forrestania's stock debuted on the ASX at 1 pm this afternoon.
At the time of writing, the Forrestania share price is 29 cents, 45% higher than its prospectus' offer price.
However, today's intraday high saw it trading at 39 cents, representing a 95% increase on its offer price.
Let's take a closer look at Forrestania Resources and its first day on the ASX.
Forrestania share price soars on ASX debut
The Forrestania share price is performing well on its first day on the ASX.
Under the company's prospectus, 25 million Forrestania shares were offered for 20 cents apiece. Thus, Forrestania's Initial Public Offering (IPO) earned it around $5 million.
The company now has 51 million shares on offer. It also has an enterprise value of around $5 million.
Under its prospectus' offer, Forrestania had an expected market capitalisation of around $10.2 million. At its current share price, the company's market capitalisation is $14.7 million.
The company will be putting the cash from its IPO towards exploration and development at its projects. It will also put some towards repaying its debt and paying its vendors.
The company bought the Forrestania Project from Firefly Resources Ltd (ASX: FFR).
Following its IPO, Forrestania will conduct an exploration program for known specialised lithium-caesium-tantalum pegmatites at the project.
Previous drilling at the Forrestania Project returned assay results including:
- 33 metres grading 3.2% lithium oxide from 69 metres, including 13 metres at 4% lithium oxide from 81 metres
The purchase cost Forrestania $50,000, as well as 12% of its shares. That places Firefly as Forrestania's largest shareholder.
Another major shareholder is investment company Citycorp Nominees, which has a 9.2% holding in Forrestania.
