Investors who got in on the ground floor at Valiant Gold Ltd (ASX: VAL) are already sitting on impressive gains with the company's shares changing hands more than 20% up on their initial public offer (IPO) price on their first day of trade.
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Strong public offer support
Valiant Gold raised $75 million in an oversubscribed IPO, allocating $20 million to Westgold Resources Ltd (ASX: WGX) shareholders.
Westgold itself retains a 44% equity interest in Valiant, which is subject to a two-year escrow period.
Valiant Gold was incorporated initially as a subsidiary of Westgold, for the purpose of demerging the latter company's Reedy Project and Comet Project in Western Australia.
Together, those two projects already have a mineral resource of 1.2 million ounces of gold made up of 15.6 million tonnes of ore at a grade of 2.4 grams of gold per tonne.
In the Valiant prospectus, Chair Derek La Ferla said the assets would get more attention than they would have had they stayed within Westgold.
The demerger of the Projects into Valiant presents an opportunity to bring forward value from these assets by establishing an independent team dedicated to recommencing mining, drilling and resource expansion, as well as leveraging off Westgold's nearby processing infrastructure to accelerate the restart of mining from the projects.
He said there was also the opportunity to grow the projects.
Given that the Comet and South Emu–Triton underground mines were in operation as recently as FY2023, Valiant has identified a number of opportunities to accelerate exploration works that are required to inform a potential future decision to recommence mining operations. These activities relate to the potential commencement of dewatering of the Comet mine to provide access to underground drilling positions, along with resource extension drilling from surface at South Emu-Triton. Valiant has also identified the historic Boomerang-Kurara mine as a priority for investigation of an open pit cut back opportunity given the current high gold prices.
Shares performing well
Shortly following the commencement of trade at 1pm, more than 21 million Valiant Gold shares had changed hands.
The shares hit a high of 31 cents before settling back to be 21.9% higher than the 25-cent IPO price at 30.5 cents.
Westgold shares were 2.9% lower at $5.37.
At the offer price of 25 cents, the company was expected to have a market capitalisation of $135 million.
The top 20 shareholders in Valiant accounted for 81.2% of the shares on issue, with Westgold owning 44.4%, with the remainder largely held by large broking houses, including Citicorp, HSBC, and JP Morgan.
