Monday, 21 July 2014

Alliance Mineral Assets Limited



Alliance Mineral Assets Limited ("AMAL" or the "Company") is placing out 67.669m shares at $0.23 each. 43.479m will be new shares with the balance being vendor shares. The offer will close on 23 July 12pm and list on 25 July 2014. The Company will have a market cap of $90.6m post IPO.

The Company is a mining company headquartered in Perth, Western Australia and is primarily developing and exploiting the Tantalite Mineral Resources in Australia. After going through the prospectus and the so-called Expert report, i am none the wiser with regards to how to value this Company.

Tantalum

The Company is mining what is commonly know as "red earth". There are many uses for Tantalum and you may find this article interesting that it is one of the most important element you have never heard of, with South America and Australia accounting for 2/3 of the world's supply.


Use of Proceeds



You can see that listing expense continue to dominate the use of proceeds, which is extremely unhealthy.

Shareholders

Husband and wife team of Suen Sze Man and Tjandra Pramoko will hold about 49.8% of the Company with the balance held by several investors, including Alan Wang. Alan Wang is also one of the convertible loan holders and his effective cost per share is around $0.14 (versus the IPO price of $0.23)


What i like about the Company
  • For once, not the usual coal mining companies from Indonesia or some funny Phosphate mine from China :-P
  • The resources is pretty unique and has many commercial uses.
  • Business strategies and future plans clearly outlined.
  • Alan Wang is investing... and subscribing for > 5% of the placement shares. I believe it is the same Alan that is behind QT Vascular and Starbust IPOs in recent times.

My concerns
  • Save the earth please!
  • Loss making for the last 3 years
  • IPO price is at a huge premium over the NAV per share by more than 200%
  • Currency risks
  • Small cap company
Ratings

Given there is no public tranche and the company is pretty unique, i will not give it any target price as i am not privy to other information. However, I understand the IPO is very hot and probably i can understand why given Alan Wang's involvement. I will give it a 2 Chilli rating for this ipo debut and good luck to those who are lucky enough to get some shares.

Happy IPOing.


11 comments:

Anonymous said...

Hi Boss, how about iReit? im being offered placement and need to express interest by 29. looking forward for your review.

Mr. IPO said...

Hi i have not reviewed it la. Just a German REIT with focus on European properties but majority owned by Chinese business man Mr S REIT. Yield is around 8-8.5%. Buy if u like lor. Not for flippers

lust for love said...

Don't like those Trusts, prefer this if the deal is structured in REIT form which guarantees dividend payments, so this is riskier, if interest rates goes up, definitely price or value of the Trust will go down. Take into account the oversea exposure and forex exposure, personally I would need a higher compensation yield of close to 10% to cover my risks which are much higher than a normal REIT.

I look upon suspiciously at those TRUST listings because most of them are just trying to cash in when prices of assets are high and interest rates are low.

Mr. IPO said...

There was an article in the edge last weekend Saying how this deal is more investors friendly because it's fees is based on distribution and not AUM... But I have yet to analyze it though.

Anonymous said...

How abt the japan golf clubs ipo and the marble ipo

Anonymous said...

What do hou think of alliance now? Vested but it doesnt seem good..

Mr. IPO said...

You have it from placement or you bought from market ? My views and ratings are for the IPO price and don't usually comment on post market price movements as I won't chase them.

Anonymous said...

Bought from market sir. Sure. Just wanted to hear some opinions from you if you.

Mr. IPO said...

I would set a cut loss level and stick to it.

Anonymous said...

too much to cut nw

Mr. IPO said...

never stick to your original cut loss level?

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