Halo Minerals shares sank on its AIM debut today, after raising £4 million at 18p per share to advance a copper extraction project targeting legacy mining waste in northern Chile.
The company began trading under the ticker HALO with a market cap of around £20 million before shares sank around 26% to trade at 13.25p,
The company’s core asset is the Playa Verde Project in the Atacama Region, comprising six mining concessions covering 13.57 square kilometres of copper-bearing tailings near the coastal town of Chañaral.
The project carries a JORC-compliant mineral resource of 53 million tonnes at 0.24% copper, with ore reserves of 32.2 million tonnes at 0.25% copper, containing around 79,000 tonnes of fine copper.
Based on those reserves, and using a copper price of $5.30 per pound, the project carries a post-tax NPV of $154 million and an IRR of 50.9%. These are attractive numbers, but not ones that have inspired confidence in the company as trading began on Monday.
The IPO is intended to take Playa Verde to a final investment decision or to a point at which alternative project funding can be secured.
Beyond Chile, Halo says it will also pursue additional growth opportunities in other jurisdictions. Investors in the IPO will hope the £4 million war chest can be put to work to progress these before long after the poor start to life on AIM.
Cairn Financial Advisers is acting as nominated adviser with Global Investment Strategy UK as broker.