ASX Escrow Watch: Lithium companies dominate in releasing shares

Heavily shorted lithium stock Pilbara Minerals to release under its NED fee sacrifice offer
Winsome Resources to release more than 8 million fully paid ordinary shares and 4 million unlisted options
Cosmos Exploration and Australian Critical Minerals will also release shares from escrow

Escrow Watch is Stockhead’s recap of the ASX companies that are releasing shares currently in escrow (also known as restricted securities) over the coming weeks.

ASX shares in escrow are “locked away” and not listed on the bourse so owners can’t sell them – until they’re released.

This is intended to depict to would-be investors when raising capital that the management and previous investors are still backing the venture and aren’t raising capital just so they can “sell out”.

While there’s no guarantee holders of escrowed shares will sell at that point, the mere fact that they will be able to is worth knowing – particularly if shares have substantially moved one way or the other.

Click here for a more detailed description of the ASX rules surrounding escrow arrangements. There is certainly no shortage of companies releasing shares at the end of the year.

November 30 – Biome Australia

Microbiome health company Biome Australia (ASX:BIO) will release 39,359,545 fully paid ordinary shares, 2,131,404 unlisted options exercisable at 30 cents on or before November 24, 2024 and 2,131,404 unlisted options exercisable at 40 cents on or before November 24, 2025.

BIO says 38,534,545 or 98% of the 39,359,545 fully paid ordinary shares coming out of escrow are held by the board, senior management and a supportive shareholder, all of whom intend to hold their shares once released from escrow.

November 30 – Leeuwin Metals

March-listed lithium play Leeuwin Metals (ASX:LM1) says it will release 1,230,631 fully paid ordinary shares and 2.5 million unquoted options with an exercise price of 50 cents each, expiring on May 31, 2027.

LM1 says the shares being released from escrow are held by cornerstone investor Glencore Australia Holdings Pty Ltd, a wholly owned subsidiary of Swiss multinational commodity trading and mining company Glencore PLC.

November 30 – Winsome Resources

Lithium explorer and developer Winsome Resources (ASX:WR1) will release 8,240,007 fully paid ordinary shares and 4 million unlisted options expiring November 18, 2025 with exercise price of 30 cents along with 2,050,000 performance rights.

WR1 says there are no further securities subject to either ASX imposed mandatory escrow arrangements or voluntary escrow arrangements.

The company will be applying for quotation of the escrowed securities upon their date of release and there will be no change to the issued capital as a result of release of the escrowed Securities.

December 1 – Pilbara Minerals

Heavily shorted lithium stock Pilbara Minerals (ASX:PLS) will release 14,191 ordinary shares previously issued to non-executive directors (NED) under the company’s NED fee sacrifice offer approved by shareholders at 2020 AGM.

The ASX 200 lithium company has 19% of its stock currently shorted. Lithium prices have dropped substantially in 2023 from 2022 prices.

Analysts say short-sellers are factoring in a decline in profit due to lower spodumene prices, a capital expenditure program bringing PLS’s cash on hand down, and in the short term a growth profile unfavourable to the market.

The PLS share price is down 5.47% YTD and ~10% in the past month.

December 1 – Cosmos Exploration

Lithium, nickel-copper-PGE and gold-copper explorer Cosmos Exploration (ASX:C1X) will release 13 million fully paid ordinary shares from escrow.

C1X recently provided positive updates on its exploration activities at its prospective Corvette Far East Lithium project and Lasalle project, in the prolific James Bay district in Quebec, Canada.

The explorer says it will apply for quotation of the shares.

December 1 – QANTM Intellectual Property

QANTM Intellectual Property (ASX:QIP) will release 887,192 fully paid ordinary shares.

QIP is the owner of a group of leading intellectual property (IP) services businesses operating in Australia, New Zealand, Singapore, Malaysia and Hong Kong.

At QIP’s recent AGM chair Sonia Petering said despite high inflationary environment, the company reported strong FY23 results including total revenue of $137 million, up 7.6% from FY22.

“Importantly, we reported that service charge revenues rose by 7.4% to $103.8 million, reflecting our ability to drive top-line growth across each of our businesses,” she said.

December 2 – Australian Critical Minerals

Australian Critical Minerals (ASX:ACM) will release 2,345,000 escrowed shares and 5,456,250 escrowed options with an exercise price of 30 cents on June 29, 2026.

ACM says the following securities remain subject to escrow:

3,250,000 shares escrowed until March 27, 2024
8,205,010 shares escrowed until July 3, 2025
625,000 options escrowed until May 1, 2024
12,450,000 options escrowed until July 3, 2025

ACM recently announced trace elements and spectral analysis confirms a LCT pegmatite system and has generated 10 priority targets in the untested goldilocks zone at its Cooletha Lithium Project in the Pilbara lithium district of WA.

December 3 – Cluey

Edtech and online tutoring company Cluey (ASX:CLU) has announced it will release 14,994 ordinary shares from escrow.

During his recent AGM address chairman Robert Gavshon said the past year had been demanding “given market conditions generally, and specifically given inflationary and cost of living pressures”.

In FY23 CLU achieved revenue of $39.4 million an increase of 15% on FY22, delivering 599,474 student sessions, an increase of 11% on FY22.

The company achieved a 20% improvement in Underlying EBITDA loss of $14.2 million compared to $17.7 million in FY22 and an 8% improvement in gross profit margin in FY23, to 57.3%.

“The market conditions in play during FY23 has led Cluey to reset its immediate strategic goals and most importantly focus on achieving profitability,” Gavshon said.