Azzet reports on three ASX stocks with market-moving updates to share today.
Syrah Resources slumps after raising $70m via shares
Shares in Syrah Resources (ASX: SYR) were down around 26% at the open ($0.275) after the supplier of natural graphite and active anode material told the market it had raised $42 million through a placement and the institutional component of its accelerated non-renounceable entitlement offer.
The offer was structured on a one-for-5.42 basis, with both tranches priced at $0.26 per share.
What may have unnerved the market today was that a) the major new shares were issued at a discount (163.4 million) – which will rank equally with existing shares - which can lead to ownership dilution and b) there was no specific disclosure on what the funding would be used for.
However, true believers in the stock appear willing to ‘buy the dip’ with buyers far outweighing sellers in late morning trading.
The retail component of the Entitlement Offer (“Retail Entitlement Offer”), which is fully underwritten, is expected to raise around $28 million.
In total, the Placement and Entitlement Offer is expected to raise approximately $70 million.
Strong participation was evident, with 86% of available entitlements being taken up by eligible institutional investors.
The fully underwritten retail entitlement offer is set to open on 6 August and will remain open until 5pm AEST on 20 August.
Today’s share price fall unravels the 26% gain the stock made on 21 July following revelations in the U.S. that the Trump administration is set to introduce a major tariff on a battery material that plays a key role in the production of electric vehicles (EVs).
What excited investors was the U.S. Commerce Department’s 93.5% tariff on Chinese graphite.
It’s understood that China accounts for more than 40% of graphite imports into the U.S. which bodes well for Syrah which is now recognised as a globally significant supplier of natural graphite and active anode material.
Syrah’s flagship operation is the Balama graphite mine in Mozambique - estimated to hold enough graphite for 50 years of production – and it has also established a downstream processing facility in the U.S. state of Louisiana to complement its mining operations.
However, as investors in the stock are all too aware, mining in Mozambique has its own unique set of challenges.
Late last year, the company declared force majeure due to civil unrest following a contested election, which halted mining operations and led to a default on the company's U.S. government-backed loans.
Last week Jarden upgraded Syrah Resources to Overweight from Neutral and lifted its target price to 40c from 28c.
These changes follow the imposition of minimum 105% anti-dumping and countervailing duties on Chinese active anode material (AAM) imports into the U.S.
The broker expects these durable trade measures, which also apply to AAM within imported battery components, to significantly enhance the competitiveness of Syrah’s US-based Vidalia facility.
The facility produces AAM at unit costs of circa US$5,000–6,000/t versus Chinese landed AAM now priced at over US$8,300/t.
With the duties immediately effective and a final determination due by December 2025, Jarden expects the development to rapidly accelerate Vidalia’s commercial momentum. It's also expected to eliminate Syrah’s pricing disadvantage versus Chinese supply.
The broker also sees strategic value in Vidalia’s scalable 45ktpa capacity and latent supply potential from Balama.
It's anticipated that North American battery manufacturers will shift procurement away from China in response to cost and new tariff pressures.
Syrah Resources has a market cap of $286 million; the stock is down 1.76% over one year and up 34% year to date.
The stock appears to be in a strong bullish trend confirmed by multiple indicators.
Consensus is Moderate Buy.
Locksley Resources flies after raising funds to refocus on REE
Shares in Locksley Resources (ASX: LKY) were up around 24% at noon after the ASX small cap raised $5.3 million in an oversubscribed placement with Tribeca Investment as a cornerstone investor.
What clearly excited the market this morning were revelations that the miner was turning its attention to high-grade antimony and rare earths at its Californian asset, the Mojave project.
Locksley chair Nathan Lude said the company was extremely pleased with the level of demand and quality of institutional participation in the placement.
“… we welcome more than a dozen new institutions to the Locksley register, providing us with a robust group of investors capable of supporting our forward-looking growth strategy,” said Lude.
“This funding places us in a strong position to execute our exploration and downstream plans across the Mojave project and unlock the full value of our US-based critical minerals portfolio.”
It’s understood that funding from the latest raise will be earmarked for exploration, permitting and downstream development for the Mojave project which comprises over 250 claims across two contiguous prospect areas, namely the North Block/Northeast Block and the El Campo Prospect.
Added to investor excitement is its proximity to MP Materials’ Mountain Pass rare earths mine which recently received two hefty investments from the US Department of Defense and U.S. tech giant Apple.
Beyond the Mojave Project in California, Locksley's other key asset is its Tottenham Copper-Gold Project in New South Wales.
Locksley had a cash position of around $2.26 million at the end of the June quarter.
Locksley Resources has a market cap of $23 million; the share price is up 519% in one year and up 91% in the last month.
Star Entertainment falls following collapsed sale of Queens Wharf
Shares in embattled Star Entertainment Group (ASX: SGR) were trading 4.5% lower at lunch time after revelations that following the failed Queens Wharf deal with Hong Kong partners it now has a week to repay $10 million of the $45 million already received.
Another $31 million needs to be paid by 5 September.
As a result of the deal being terminated, the company will retain its 50% equity interest in Destination Brisbane Consortium (DBC) and its third equity interest in Destination Gold Coast Consortium (DGCC) and other assets.
The company will also retain the Treasury Brisbane hotel and car park and its 50% equity interest in Charlotte Street Car Park (Festival).
Assuming the amounts referred to above are not repaid, the company must transfer its third interest in Tower 1 Hotel at the Gold Coast (Dorsett) to the Joint Venture Partners.
The Joint Venture Partners are also required to reimburse the company for their share of equity contributions that have been made (by the company) to DGCC since 7 March 2025.
This amount is currently expected to be around $1 million based on amounts paid to date.
The company will also continue to be responsible for its share of future equity contributions to DBC, estimated to be around $200 million.
However, the $35 million prepayment to the company of its share of the net sale proceeds for apartments in the Tower 2 development on the Gold Coast survives termination of the deal.
The company expects to be able to manage those repayments courtesy of a $300 million cash injection received earlier this year from U.S. company Bally's and major shareholder Bruce Mathieson.
However, the current cash burn of around $27 million a quarter (operationally) suggests the stock is by no means out of the woods.
The Star Entertainment Group has a market cap of $301 million; the share price is down 81% in the last year and down 44% year to date.
The stock’s shares appear to be in a long-term bearish trend confirmed by multiple indicators. Long-term, the 200-day moving average is falling and shows that demand for this stock is low.
Consensus is Moderate Sell.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
