Chrysos Corporation share price plummets 40% on ASX debut

The ASX newbie offers a fresh way to analyse gold assays.

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Key points

  • Chrysos shares listed on the ASX on Friday following a $183.5 million IPO
  • Sadly, the provider of gold analysing technology's stock quickly dropped 40% to trade at $3.90 before regaining some ground
  • The company plans to use the funds raised through its IPO to manufacture and deploy more gold analysing units

After much anticipation, Chrysos Corporation Limited (ASX: C79) shares hit the ASX this morning, tumbling to trade 34.9% lower than the company's initial public offering (IPO) asking price.

The mining technology company provides PhotonAssay, a gold assay solution. The tech is said to deliver faster, safer, and more accurate gold analysis.

At the time of writing, the Chrysos share price is $4.23, down from its IPO asking price of $6.50. However, earlier today it plunged to $3.90, representing a 40% tumble.

Let's take a closer look at the mining technology company's journey to the ASX and what it's planning to do moving forward.

Chrysos share price sinks on ASX float

All eyes are on the Chrysos share price as the company hits the ASX following its $183.5 million IPO.

Some 28.2 million Chrysos shares were offered for $6.50 apiece under the company's prospectus.

Funds raised through its IPO will help the company manufacture and deploy more PhotoAssay units. PhotonAssay works by exciting gold atoms with X-rays.

The company makes its money by leasing PhotonAssay units to customers under long-term contracts. Those customers pay the company per assay they process using the technology.

Chrysos already has contracts signed for 33 units, reflecting a total contract value of $448 million.

It also has sales commitments extending to 2024, a 5.4% market penetration, and an addressable market of 610 PhotoAssay units.

Its customers include two of the world's biggest producing gold miners and three of the world's largest testing, inspection, and certification companies.

The CSIRO – which originally conceived the technology – remains a major Chrysos shareholder.

Commenting before the company's float, Chrysos CEO and managing director Dirk Treasure said:

PhotonAssay represents the first major advancement in gold assaying in centuries and aims to displace the existing fire assay method. It offers a unique solution to a range of operational, economic and ESG challenges currently facing mining and exploration companies.

We have already made significant headway in the acceptance of PhotonAssay within the gold sector … yet there is so much potential ahead of us for growth within our addressable market, and further expansion into the analysis of other elements such as silver and copper.

The company expected to list with a market capitalisation of around $637 million and 98 million outstanding shares. However, at its current share price, Chrysos has a valuation of approximately $401 million.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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