Pacific State Metals' small-scale IPO falls over as drought conditions linger


Drought-like conditions defining the ASX IPO market look well entrenched, with an IPO from private Pacific State falling over this week.

Seeking to raise a paltry $5.5M at 20cps for an Australian listing, the company couldn’t find enough buyers – despite boasting “potential large copper [and] base metal and gold deposits.”

While it’s true there’s already enough copper and gold projects to throw money at, the failure to list does point to a worrying environment. Especially given this is Australia, and that both metals are sufficiently vogue through 2024.

Usually, hype is enough to garner funding. But – based on a fairly limited and abrupt update – it appears that investors aren’t feeling risk-on.

ASX-listed proposed partner on the deal, S2 Resources (ASX:S2R), announced the news about Pacific State on Monday. It had previously been gearing up for an asset transaction with Pacific State once listed.

That, of course, is now dead in the water. The culprit? “Adverse market conditions.”

(This sounds a lot like Telix’s excuse for ditching its NASDAQ listing just last week, despite market conditions in the US being pretty fantastic right now.)

“Pacific State has been unable to complete an Initial Public Offering by the agreed date of 30 June 2024,” S2R wrote on Monday.

“As a result of this, Pacific State and S2 have agreed to terminate the agreement entered into in August 2023.”

That agreement saw S2R intending to pawn off its Fraser Range and West Murchison projects to Pacific State. No longer is that the case.

S2R has sold off its stake in Pacific State and is now “reviewing exploration plans to unlock … intrinsic value” in the projects.

The question is, of course, why it wanted to sell them in the first place.

S2R last traded at 11cps.


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