Weekly Small Cap and IPO Wrap: Chookless heads, China lockdowns and tech stocks you’d like to shoot

ByJosephine J. Romero

May 15, 2022 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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When I say the ASX200 has closed the week about 2% lower, it feel like the cut and thrust of volatility is poorly represented.

Global markets behaved badly in the face of a little monetary tightening, some toppy inflation and a touch of the China-lockdowns. The plunge in global respect for American markets also dragged down the all-too easily led Australian indices.

Across China COVID-19 curbs have placed hundreds of millions of people in all kinds of strange and unusual forms of restriction, whacking consumption and manufacturing, and disrupting trade and global supply chains.

But even the ASX Emerging Companies (XEC) index closing some 6% the worse also fails to really capture what a headless chook of a week it has been for market-dwelling lifeforms.

It’s been emotional.

Be it crypto-things, global bond yields (yeah, they pulled back from their short-lived highs, the energy things like gas and oil, all the metal stuff (save for gold) and of course iron ore – it was as Shakespeare’s brilliant Cassius in JC Act 1, Scene 2 puts it – a whole lot of falling down.

Cassius
But, soft, I pray you; what, did Caesar swoon?

Casca
He fell down in the market-place, and foamed at
mouth, and was speechless.

Brutus
‘Tis very like; he hath the falling sickness.

Cassius
No, Caesar hath it not; but you and I,
And honest Casca, we have the falling sickness.

Tis certain prices fell. And the general sense of doom dragged down that all-too-easily led Aussie dollaerbuck back to the dark place we know as under $US0.69.

Aussie tech stocks, did I mention them?

That sector is the fiscal equivalent of a nightmarish romance I once had at University.  They were going great guns, then they were crashing. Down 8% yesterday, 11% for the week, until today’s market leading return.

In the insensible broad global sell-off of equity markets, tech stocks have been hit fulsomely.

The Nasdaq composite is down ~13.36% in the past year, while the S&P/ASX 200 info tech sector is down ~21% for the same period.

At home the REIT’s, materials, industrials and property all took a backward step this week, with only the health sector rising in a puff of irony.

Chinese data is dropping as I write. It’s going to be more Macbeth than Alls Well that End’s Well, I fear.

A fitting edition to a week stuck with Prospero in The Tempest.

 

These are the companies listing next week, according to the ASX:

Southern Cross Gold (ASX:SXG)

Listing: 16 May

IPO: $10m at $0.20

This gold explorer is focused on revitalising the Victorian goldfields, which host Fosterville and Costerfield, two of the highest-grade underground deposits in the world.

The company is a spin-out from Toronto Stock Exchange listed Mawson Gold – which is now a Nordic focused gold exploration company who hold the Rajapalot gold-cobalt project in northern Finland.

SXG operates the Sunday Creek, Redcastle and Whroo projects in Victoria, along with the Mt Isa polymetallic project in Queensland.

 

Demetallica (ASX:DRM)

Listing 16 May

IPO: $15m at $0.25

Another explorer, this one is a spin-out from Minotaur Exploration (ASX:MEP) targeting gold, gypsum and base metals at its projects across Queensland and SA.

The company holds the Pyramid Gold project, Windsor copper-zinc-lead-gold-silver project and Chimera copper-gold-lead-silver-zinc projects in Queensland.

DRM also has the Peake and Denision copper-gold, zinc-lead-silver JV and the Lake Purdilla gypsum project in SA.

“The company benefits from the past decade of intensive minerals exploration and resource definition work carried out by Minotaur,” chairman Dr Roger Higgins said.

“Demetallica will continue on that pathway, focused primarily on copper-gold exploration within Australia.”

 

Aurora Energy (ASX:1AE)

Listing: 18 May

IPO: $8m at $0.20

This company is focused on the exploration and development of its Aurora Project in Oregon, USA.

The project hosts a defined uranium resource and is prospective for lithium. The company will conduct exploration and evaluation programs to assess the potential of both these minerals.

 

Bindi Metals (ASX:BIM)

Listing: 19 May

IPO: $4.8m at $0.20

This explorer is planning to acquire the Biloela project in Queensland which is prospective for gold and copper.

The company plans to compile data and geophysical surveys at the Flanagans and Great Blackall prospects, followed by a drilling program at both prospects.

 

TG Metals (ASX:TG6)
Listing: 20 May

IPO: $6m

This explorer is focussed on assets prospective for nickel, lithium and gold in the Goldfields-Esperance region of WA.

It actually holds the largest land package ever held by one company in the history of exploration within the Lake Johnston Greenstone Belt and says the region has been historically overlooked and underexplored – with the Lake Johnston project never the main focus for nickel majors that previously held the ground.

 

ASX SMALL CAP WINNERS:

Here are the best performing ASX small cap stocks for May 9 – 13:

Swipe or scroll to reveal full table. Click headings to sort:

It’s a week to remember for the team at GAL – up about 165%.

After taking a breather yesterday,Galileo Mining (ASX:GAL)is again flying on the back of a major palladium-platinum discovery announced Wednesday at the ‘Norseman’ project in WA.

The discovery hole at the ‘Callisto’ prospect returned a 33m-long intersection grading 2g/t 3E (1.64g/t palladium, 0.28g/t platinum, 0.09g/t gold), 0.32% copper & 0.30% nickel from 144m.

This 33m assayed intersection occurs within a wider 55m disseminated sulphide zone (126–181m) “indicating the potential for a large mineralised system”, GAL says.

Assays from a further five drill holes are pending, but GAL has already flagged strong geological continuity “with all drill holes intersecting disseminated sulphides”.

Envirosuite (ASX:EVS) has swum bravely against the tide this week which has seen its share price rally 5% in the past five days amidst a brutal heavy sell-off.

In the broad global sell-off of equity markets, tech stocks have been hit hard.  The tech heavy Nasdaq has fallen heavily, while ASX tech stocks have been also feeling the pain.

The Nasdaq composite is down ~13.36% in the past year, while the S&P/ASX 200 info tech sector is down ~21% for the same period.

But there is one tech stock defying the odds. Environmental technology company has seen its share price rally ~40% in the past year to 15 cents.

And while there have been days it has been down during the recent selloff, Envirosuite has kept its head above water. In the past five days amidst heavy selling its shares have climbed 5%.

Look while we’re praising tech stocks – Xref (ASX:XF1) has gained strongly this week, after the HR tech software firm was picked out by by Coles (ASX:COL) to do its identity and working rights employee checks.

The three year contract is  worth at least  $300,000 but it’s a decent signal of quality.

With over 130,000 employees across Australia, XF1 will be busy for a bit.

The Polynovo (ASX:PNV)  share price surged 17% today amid more news of insider buying.

The wound care specialist has seen its share price rally ~28% to $1.20 in the past five days.

Polynovo has had a cracking run sparked by some inside buying led by chair David Williams, who via an entity bought some $228,000 worth of Polynovo stock.

The purchase saw the entity taking home 250,000 shares at a cost of 91 cents a pop. And considering the consequent share price strength that’s already been a wise move.

Alongside the hefty 1.5 million shares Williams snapped up last week , his piece of the company now stand at over 20 million shares.

Polynovo has reported solid Q3 FY22 results and recently put out an announcement saying several candidates are being considered for the CEO role.

The company’s search for a CEO has been slower than expected and it is hoping to make an appointment by the end of the current financial year.

 

ASX SMALL CAP LOSERS

Here are the worst performing ASX small cap stocks for May 9 – 13:

Swipe or scroll to reveal full table. Click headings to sort:

Metals X (ASX:MLX) shares are down almost 25% this week, but this is more a sign of previous strength than future failings. MLX is Australia’s largest Tin producer and holds a portfolio of assets from exploration to development including the world class Wingellina project. Shares are up well over 100% in the last 12 months.

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