Can Cloudbreak’s share price rediscover former highs?

The Vancouver-based, natural resource project generator’s latest equity drawdown, which saw 15 million new shares issued, comes with Cloudbreak Discovery’s share price 40% lower over the last 12 months. Cloudbreak will use the funds to acquire energy royalties, lithium assets, and bauxite projects, as it continues to focus on the commodities driving the clean energy transition.

Cloudbreak Discovery’s [CDL] share price remains 40% lower over the last 12 months, with the stock unchanged over the course of last week, following the Canada-based, natural resource project generator’s latest equity drawdown, following its agreement earlier this year with investment group Crescita Capital.

With its core focus on the commodities which are key in driving the clean energy transition, Cloudbreak’s £177,000 December equity drawdown – part of its £10m equity drawdown agreement with Crescita Capital – saw 15 million new shares issued, at 1.18p per share.  Cloudbreak said the funds raised will be used for its “acquisitions of energy royalties, lithium assets, and bauxite projects globally”.

Cloudbreak Discovery sources and transacts on mineral properties, a model that’s well-known in Canada, but remains less established in the UK. Listed on the London stock exchange on 3 June 2021, CDL stock raised £2m at 3.00p a share, in what proved to be a heavily oversubscribed fundraising process.

What’s happening with Cloudbreak Discovery share price?

The Cloudbreak share price has been on a rollercoaster ride over the last 12 months, climbing to an all-time high at 13.50p on 1 March. Since then however, the CDL share price has spent most of its time on the slide, plunging to an all-time low at 1.08p on 8 October. The shares have risen slightly since then, closing out last week at 1.23p – 13.11% above the October low, and 94.38% below March’s high.

How’s Cloudbreak performed since its IPO?

In the first full year since Cloudbreak Discovery stock went public, the group announced a net loss of £5.57m, a much deeper deficit than the previous year’s £902,060. The company put the significant increase down to “administrative expenses and fair value loss on investments … the fair value loss of £2.83m on both listed and unlisted investments held in the Canadian subsidiary is an unrealised loss but has contributed negatively to the Company’s 2022 year.” Losses per share came in at £0.01.

Chairman and CEO, Kyler Hardy, remains bullish on the company’s prospects, following a series of developments in the last financial year, and since then. He said: “The year ended 30 June 2022 was active for the group, having hit a number of operational milestones. We further diversified our portfolio with projects in the energy sector and in new jurisdictions, as well as acquiring our first royalty, bringing near-term cashflow.

Looking ahead, Hardy offered investors a positive outlook, saying: "We are starting to see some projects reach a point where we could potentially begin receiving royalty payments, further underpinning the benefit of our business model.”

What’s next for Cloudbreak?

In July, the group raised £585,625 through the issue of new ordinary shares, with the company continuing to review and acquire mineral and energy projects, and generate revenue through optioning these assets to exploration partners. Cloudbreak plans to continue buying and selling or optioning its projects, as it builds a new, growth-focused and diversified project generator.

Hardy’s aim is for the group to secure at least one deal per month, with a focus on North America, and  building on a small existing presence in West Africa, report Proactive Investors. Hardy – majority shareholder with a 20.6% stake, as well as CEO and chairman – said: “We look forward to keeping investors updated over the next year and beyond as we generate and pursue new ideas, including lithium assets and bauxite projects, while continuing to diversify into energy royalties and attracting new partnerships.”

While there are currently no broker ratings or forecasts on the Cloudbreak share price, the company has just announced Oberon Capital as its sole broker, so we can expect this to change in the near future. Having suffered heavy falls for most of the year and lying well under its IPO level, the CDL share price has consolidated over the past few weeks, and investors will be hoping that continued progress on both current and new projects, coupled with a realisation of earnings potential, will begin to be reflected in an upturn in the share price as we head into 2023.