Alliance Mineral Assets (IPO)

Alliance Mineral Assets: Australian miner Alliance Mineral Assets is offering 67.7m placement shares (43.5m new, 24.2m vendor) at $0.23 each, as it seeks to list on the Catalist board. The net proceeds of $7.7m will be used for exploration & drilling, internal scoping study, development of mining deposits and working capital. Post-IPO, Alliance will have a free float of 16.3%. Alliance primarily engages in the business of developing and exploiting of Tantalite Mineral Resource in Australia. The group owns the Bald Hill Tantalite Mine, the various surrounding Tenements, the Project Intellectual Property and the Bald Hill Treatment Plant. The group has also entered into a non-exclusive distribution agreement with Mitsubishi Corporation RtM Japan for two years, appointing Mitsubishi as a non-exclusive distributor of its processed Tantalite concentrate in Asia. As a guide, Tantalite a tantalum mineral and is used in alloys for strength and higher melting points, in glass to increase the index of refraction, and in surgical steel, as it is non-reactive and non-irritating to body tissues Alliance achieved a net loss of $0.5m in FY13, narrowing the net loss of $1.1m from the previous year, with interest income coming in at $6.4m (-15.9%). The group currently has no revenue as it has not commenced production, and the Bald Hill Project is in the process of being refurbished; with plans to commence trial mining and processing of Tantalite concentrate at the Bald Hill Tantalite Mine site in 2H14. Production and sale of Tantalite concentrate is expected to commence in FY15. On its prospects, Alliance expects prices of Tantalum to trend upwards in the near-term due to resurgence in demand for consumer electronics, especially from China, where the scale of China’s Tantalum market has reached Rmb1.95b. Based on the IPO price of $0.23, Alliance trades at 3.0x P/B with a total market capitalization of $90.6m. While there are no direct peers listed on SGX, closest Australian peers, Galaxy Resources trades at ~0.53x P/B and Pilbara Minerals at ~1.91x P/B. The IPO placement offer closes on 23 Jul ’14 at 12.00 pm, with trading expected to commence on 25 Jul ’14 at 9.00 am. Prime Partners is the sole sponsor, issue manager and underwriter for the IPO.