Morgan Stanley has landed a gold-plated initial public offering mandate for the new year.
Street Talk can reveal Australian gold mining technology play Chrysos Corporation has mandated the US investment bank to ready it for an ASX-listing, in a sharemarket float that could value it at about $500 million.
Chrysos is sparkly and new and sure to grab fund managers’ attention. The company is a rare mining sector technology play, which is seeking to change the way explorers and miners assess ore samples.
It’s expected to be pitched as an industry disrupter – and a company that could change the exploration industry forever.
Adelaide-based Chrysos bought its “PhotonAssay” technology in 2016 from Australia’s CSIRO, which spent 15 years working it up to the point where it was ready for a party like Chrysos to help commercialise it.
The technology would replace the fire assay test – which is the traditional way explorers burn ore to discover how much gold is in it – and replace it with a scan-based model that uses x-rays to accurately assess a sample.
The pitch to miners is that PhotonAssay can help them do more on-site testing, more quickly and for a lower cost, than traditional fire assay tests which require samples to be sent away.
It’ll be interesting to see how the fund managers look at the company – and how they value it. While it’s exposed to the gold sector, we’re tipping there will be very few gold mining or exploration plays in the pre-deal investor education reports, and instead analysts will point to technology companies. That means revenue multiples, big addressable markets and the like.
Funds raised in the IPO would be expected to be used to develop the technology, and make sure that Chrysos capitalises on the potential market opportunity. It’s costly for Chrysos to produce and roll out the PhotonAssay machines.
Float proceeds to fund roll-out
It is understood the IPO is slated for next year, although sources said Chrysos’ board was yet to formally sign off on any plans. The company is chaired by Rob Adamson, who is executive chairman at resources sector investment house RFC Ambrian.
The mooted sharemarket listing comes one year after Chrysos raised $30 million in a pre-IPO funding round, also handled by Morgan Stanley.
It’s another solid win for Morgan Stanley’s team, which is fresh from listing Macquarie Group forensic software play Nuix and also heads into the new year with a mandate to float or sell a multi-billion dollar logistics portfolio owned by Blackstone’s real estate unit.