The Offering

Company Overview

Aeramentum Resources Limited (ASX: AEN) is an Australian Public Company incorporated on 03 June 2021 to acquire, explore, and develop its initial investment being the ‘Treasure’ (Black Pine) Project, in the Republic of Cyprus, European Union. The Company’s first acquisition was the Treasure Project in Cyprus through the purchase of PR Ploutonic Resources Ltd.

Corporate Structure of the company

Source: IPO Prospectus

Key Highlights

• Purpose of the Offer: The principal goal of the Offer is to raise money, which would enable the Company in carrying out the planned exploratory operations on the tenements held by its subsidiary in Cyprus.

• Primary offering: The Company intends to issue a minimum of 25,000,000 Shares and a maximum of 35,000,000 Shares at a price of AU$ 0.20 per Share to raise a minimum of AU$ 5,000,000 and a maximum of AU$ 7,000,000. (Before costs).

• Conditions of the Offer: If the Minimum Subscription is not raised within four months of the Prospectus filing date, which was May 9, 2022 (or such later date as ASIC may allow), all Applications will be dealt with in line with Section 724 of the Corporations Act. Such action might include the return of application fees (without interest) or the distribution of a supplementary or alternative prospectus.

• Use of Proceeds: The company intends to use proceeds from the offering for the following purposes:

Source: IPO Prospectus

• No Revenue Recognition: The company is in the early stages of mining and has not yet recognized any revenue; moreover, it has declared net losses due to higher operational expenditures.
  

• Dividend Policy: The company does not intend to declare or pay cash dividends shortly. Its current strategy is to utilize cash available and future earnings to support its business operations and expansions.

Financial Highlights (expressed in AU$)

Source: IPO Prospectus

• No Revenue Recognition: The company has not recognized any revenues as on 31 December 2021.
• Incurring Expenses: The Company’s administration expenses, and evaluation and exploration expenses stood at AU$ 201,362 and AU$ 156,190 respectively as on 31 December 2021.
• Reported net loss: As on 31 December 2021, the company reported net loss of AU$ 357,552, as it incurred only expenses.

Key Management Highlights

Source: IPO Prospectus

Risks Associated (High)

Investment in the IPO of "AEN" is exposed to a variety of risks such as:

• Limited History: The company was founded on June 3, 2021, and it has limited operating history and limited financial performance. Moreover, the company has not generated any revenue till date.

• Exploration and Development Risk: The tenements are often filled with historic workings with limited recent exploration. There is no guarantee that exploration of the permits, or any other tenements acquired in the future, will result in the finding of an economically viable mining deposit.

• Commodity Market: Global supply and demand variations affect the gold, copper, and other metal markets. These supply and demand changes may result in volatility in commodity prices, which will have an influence on the Company's finances as well as the probable profitability of the projects.

Conclusion

The Company is currently in the primary stage of mining and has acquired a portfolio of exploration and development assets in central Cyprus that are prospective for gold and base metals such as copper, nickel, and cobalt. Furthermore, the Company is well positioned to leverage on Europe's expanding interest in copper, nickel, and cobalt mining due to anticipated demand from electric vehicles and renewable energy/storage. Additionally, the firm has a limited history of operations, and has not yet recognized any revenue; moreover, it has declared net losses due to higher operational expenditures incurred in operational activities.

Therefore, based on the above rationales, we have assigned the IPO of Aeramentum Resources Limited, with a “Neutral” rating. This IPO is only suitable for investors with a high-risk appetite given the associated risks and the current market scenario [basis further evaluation].