The Winsome Resources Limited (ASX: WR1) share price is soaring after the company's initial public offering (IPO).
The lithium explorer and developer's stock hit the ASX at 12.30pm AEDT today.
At the time of writing, the Winsome Resources share price is 29 cents, 45% higher than its prospectus' offer price of 20 cents.
However, shortly after debuting, the company's stock was trading for 30 cents apiece, representing a 50% gain.
Here are all the details market watchers need to know about the ASX's newest member.
Image source: Getty Images
What does the company do?
Winsome Resources is a spin-out of ASX favourite Metalstech Ltd (ASX: MTC). The newly formed company has taken over its parent company's Canadian lithium assets.
That sees it exploring and developing 3 lithium projects in the Quebec Province. These are:
- The Cancet Project, comprising 395 claims. It's the most advanced of Winsome's projects.
- The Adina Project, which comprises 57 claims.
- The Sirmac-Clapier Project, made up of 77 claims.
Winsome Resources intends to sell spodumene concentrate from the projects to North America's battery market.
The company claims lithium is essential for Canada's financial security, transition to a low-carbon economy, and its electric vehicle sector.
Winsome Resources' IPO
Winsome Resources raised $18 million through its oversubscribed IPO, issuing 90 million shares for 20 cents apiece.
The funds raised will allow the company to operate as a stand-alone listed entity.
As part of the spin-off, Metalstech shareholders will retain 45 million shares in Winsome Resources. The holding is to be distributed in-specie to Metalstech shareholders.
Another 1.45 million shares will go to the company's directors.
The offer price and high level of demand for Winsome Resources' shares leave the company with an expected market capitalisation of around $28.4 million and approximately 141.9 million shares outstanding.
However, at its current share price, Winsome Resources has a valuation of around $40 million.
On Winsome Resources' future, the company's managing director Chris Evans commented:
Current trends show up to 10 times more lithium is required in the next decade to meet the demand and it is going to require a huge investment to get there.
With more than 99% of the world's lithium reserves located in Australia, Argentina, Chile, and China, our projects offer jurisdictional diversity and opportunity to contribute to the expanding North American battery industry.
