C79 - Chrysos Corporation

[System]

Chrysos Corporation Limited is an Australian based provider of novel assay services to the global mining industry through its proprietary Chrysos PhotonAssay™ technology. Assaying involves the analysis of material such as ore to determine the presence, absence or quantity of various elements. While PhotonAssay can be used to detect a wide range of elements, the technology has proven particularly effective for gold and is currently being rolled-out across the gold mining industry. Assaying is a non-discretionary operating cost in the mining industry and has a wide array of applications across all stages of the value chain, from early-stage exploration drilling to later-stage production activities.

Chrysos PhotonAssay units are deployed to mine sites and independent laboratories which provide assay services.

Chrysos is headquartered in Adelaide, with operations spanning Perth, Canada and Tanzania.

It is anticipated that C79 will list on the ASX during May 2022.

Home | Chrysos Corporation

chrysos.com.au

 

[Dona Ferentes]

Listing date	06 May 2022 ; 11:30 AM AEST ##
Contact details	Home | Chrysos Corporation www.chrysos.com.au Ph: +61 8 8338 5384
Principal Activities	Provision of assay technologies and services
GICS industry group	TBA
Issue Price	AUD 6.50
Issue Type	Ordinary Fully Paid Shares
Security code	C79
Capital to be Raised	$183,500,000
Expected offer close date	29 April 2022
Underwriter	Barrenjoey Markets Pty Limited (Underwriter & Lead Manager).

 

[Dona Ferentes]

backgrounder/ puff piece on the upcoming float


James Tickner is a self-confessed ‘lab nerd’ who made the jump from particle physics research at the esteemed Oxford University to become one of the key players in a $637 million company due to list on the ASX on Friday.

Dr Tickner is chief technology officer at Chrysos Corporation, which believes it is revolutionising and modernising the way samples are tested in the gold industry with its giant PhotonAssay machines. The company was set up in 2016 to acquire technology developed by the physics expert when he was at the CSIRO.

The “Eureka” moment came soon after he arrived from the United Kingdom with his Australian wife more than two decades ago. His team at the CSIRO delved deeply into how high-powered X-rays made the nuclei of gold atoms move fast, enabling them to be detected and counted.
After 15 years of further work and serious commercialisation, it evolved into a quick, precise and environmentally friendly way of measuring the amount of gold in gold samples.

The industry had traditionally relied on a fire assay technique for hundreds of years, where samples are sent to a laboratory and heated to 1200 degrees in a much more time-consuming and cumbersome method.

A humble Dr Tickner plays down his role, but after prodding, reveals that it is essentially his discovery.

“My name is on the patent,” he says.

Eight of the PhotonAssay machines, which are the size of about three shipping containers side-by-side, are already installed in Australia and Africa. A further 25 are contracted out to 2024 for installation and deployment at mine sites or testing laboratories.

The company has pumped 2 million gold samples through its machines, but is still forecast to be making a bottomline loss of $4.7 million in 2022-23, as the rollout starts to gather pace.

The company is also working on a new range of smaller machines known as the “Atom”, about one third the size of the originals. “It’s still big,” he says.

The company’s chief executive, Dirk Treasure, who studied metallurgy at Perth’s Murdoch University, says Chrysos is playing the long game, and is in a strong position to potentially convert the entire gold mining industry away from fire assay.

“It’s a marathon not a sprint,” he says.

Raising $183 million at $6.50 a share, C79 will begin trading on the ASX on Friday. At the issue price it has an indicative sharemarket capitalisation of $637 million.The CSIRO is trimming its stake from 22.6 per cent to 20.4 per cent.

 

[Dona Ferentes]

“It’s a marathon not a sprint,” he says.

Interesting, but perhaps hopelessly optimistic? On a day when the ASX is down nearly 200pts, C79 listed at $4.32 and well below the raise price of $6.50. And even that low number, after the initial flurry, was about as good as it got. Now just below $4.00

 

[levin123]

Huge valuation, only $60m ish of the $183m raise going to the company, the rest is paying out existing shareholders. A lot of red flags

Also if I read the prospectus correctly, funds raised are being used to supply photoassay machines for contracts already agreed and forecast. So none of that capital is being used to pursue growth beyond what they have forecast in the prospectus which is NPAT of ($5m) in FY23

That's a worry for a listing with market cap of $650m. Idk, not feeling this one

 

[Dona Ferentes]

Chief executive Dirk Treasure said the total addressable market for Chrysos around the world is 610 machines. The Chrysos prospectus outlined that the company had total contracted value of $448 million under its 33 existing contracts for machines.

Chrysos is forecasting revenues of $13.6 million in 2021-22, rising to $26.6 million in 2022-23. It is forecasting bottom-line losses for both of those years, with the loss expected to be $2.94 million in 2021-22 and $4.74 million the following year.

 

[greggles]

The only winners from this IPO so far are those existing shareholders who pocketed a handy $118 million from the float proceeds.

 

[dyna]

The company raised $ 50 Mill last year at $4.50 so that's probably what it's still worth. Not the $ 6.50 in the float. CSIRO must have been dreaming.
Those assay machines are pretty big things. About the size of three shipping containers.

 

[Dona Ferentes]

The only winners from this IPO so far are those existing shareholders who pocketed a handy $118 million from the float proceeds.

 

[greggles]

View attachment 141399

From the Prospectus:

 

[Dona Ferentes]

now $3.62. ... as some wag said, should have been named C82

 

[levin123]

Managed to short this one so let's see how it pans out

 

[Dona Ferentes]

heading back up? $4.30 this morning, from a low of $3.33 last week

Highlights
• Five new PhotonAssay lease agreements signed, increasing Chrysos’ Total Contract Value by A$108.6m to A$559.8m
• Total number of deployed or contractually-committed PhotonAssay units rises from 33 to 38
• Three new PhotonAssay leases signed with new customers Alfred H Knight and Britannia Life Sciences, and an additional two PhotonAssay leases signed with existing customer, Intertek
• Two new PhotonAssay units deployed with existing customers MSALABS and ALS, taking the company’s deployed unit base to 10.

what did they say? an addressable market of 661? so 5% of the way there.

 

[Dona Ferentes]

photoshop opportunity (or the halo effect?)

 

[Dona Ferentes]

Someone is a true believer:
Mirrabooka participated in two smaller company IPOs; ...... Chrysos Corporation [] has seen a meaningful share price fall since IPO. We believe both remain interesting companies for the long term, that fit with our investment process as small, earlier stage investments.

- well underwater. now $3.71., been as low as $3.31

 

[Dona Ferentes]

“Our first Quarterly Activities Report as a listed company highlights strong Q4 FY22 Total Revenue growth of 236% year-on-year and reflects the accelerating demand for Chrysos PhotonAssay technology.

Despite recent challenges across the global macro-environment and some minor delays in our deployment schedule, we further embedded ourselves with customers across Australia, Canada and Africa, and remain well-positioned to meet the strategic, operational and financial objectives outlined in our April 2022 Prospectus.”

picking itself up off the floor (low point $3.31) .... $3.92 close today

 

[Dona Ferentes]

• Scalable business model with annuity-style revenue and significant potential upside based on increasing utilisation and decreasing unit costs
• Sample volume growth of 84%, with 651K samples processed by deployed PhotonAssay units
• Utilisation rate of 64% across deployed units, above minimum contracted utilisation and in line with Prospectus forecast
• 38 contracted units including 11 units currently deployed and generating revenue

$92m Cash in bank as at 30 June 2022, following Initial Public Offering (IPO) which raised $65m in new funds

 

[Dona Ferentes]

down 19% in the month. First set of financials were underwhelming, and the market responded.

Are we there yet? Have the disappointed early birds found their planarians unappetising? And sold. I noticed ARG took up 1 million shares, (in the IPO?) . Ouch

Now $3.01. My pick for the Sept comp,

 

[Dona Ferentes]

Things are settling down. A boring tech annuity biz. Just costs heaps to get set up.

"To become the world’s leading provider of innovative assay services and technologies"

Market Challenge:
Traditional assay techniques are slow, labour intensive, complex, destructive to the assay sample, and involve dangerously high temperatures and toxic chemicals that are hazardous to both operators and the environment.

The Solution:
Chrysos PhotonAssayTM

• Provides faster and more accurate assaying
• Allows real-time delivery of information to support agile decision making
• Rapid decision making helps to improve operational efficiency, recovery and profitability
• Removes hazardous chemicals from the assay process protecting operators and reducing emissions
• Is non-destructive allowing for repeat testing and comparative analysis
• The process is largely automated, reducing labour requirements and the chance of human error

Since listing:

 

[Dona Ferentes]

The company raised $ 50 Mill last year at $4.50 so that's probably what it's still worth. Not the $ 6.50 in the float.
Those assay machines are pretty big things. About the size of three shipping containers.

C79 is back up, quietly. Now a market cap of $300 million

And their tech seems to be gaining popularity