Strictly Boardroom took time out over the festive season to collate the commodity and geography focus of new ASX minerals listings during the 2013 calendar year – and also to count up the IPO funds raised for exploration. This year of course, the paucity of minerals-focused IPOs in 2013 has made the job far quicker than usual.
That is, while 2010 and 2011 saw 66 and 78 new minerals companies reach the ASX respectively – more than one new listing per week – the pace has slowed markedly.
In 2012, 33 exploration-focused IPOs (excluding oil/gas and mining service companies) were added to the bourse – while in 2013 the number of new listings in the minerals space was a meagre 12 companies.
Strictly speaking, not all these new listings were IPOs either – but the inclusion of new listings achieved via a spin-out and accompanying in-specie distribution (Santana Minerals), by scheme of arrangement (Zeta Resources) and dual-listing (Laramide Resources) does not materially change the overall numbers.
The ‘lucky’ few that made it to market in 2013 were:
- Classic Minerals (CLZ)
- Dome Gold Mines (DME)
- Elsmore Resources (ELR)
- Fertoz (FTZ)
- Kin Mining (KIN)
- Laramide Resources (LAM)
- Malabar Coal (MBC)
- MGT Resources (MGS)
- Perpetual Resources (PEC)
- Santana Minerals (SMI)
- Zeta Resources (ZER)
- Zeus Resources (ZEU)
Now to some other statistics of the ‘Class of 2013’
1. Most sought-after IPO commodity? The answer for 2013 – as it was in previous years - was gold. By Strictly Boardroom’ estimate, four of the twelve companies have gold as the principal commodity of interest. .
2. The next most sought-after commodity behind gold? Any guesses? Tin punched well above its weight, with both MGT Resources and Elsmore Resources targeting the LME’s highest priced metal. Uranium, perhaps surprisingly, also made a comeback – with Laramide Resources and Zeus Resources targeting the energy metal. Phosphate rock gets a look-in too, courtesy of Fertoz.
3. Preferred IPO exploration location? Australia is the clear winner – with eight of the 12 listings having principal projects domestically. Of the different states, Western Australia tops the list (5 companies’ principal focus) ahead of New South Wales (2) and Queensland (1).
4. The next most preferred exploration location? That’s a far tougher question. Aside Australia, the United States, Fiji, Mexico, Indonesia and Canada are represented within the project portfolio of the various companies. The complete absence of Africa is a major turnaround from past years.
5. The total amount of funds raised? Only $56 million in 2013 in total – down from around $175 million in 2012 and over $600 million in 2011.
6. The average capital-raising per IPO? The average comes in below $5 million for 2013 (at $4.7 million). Previous years had seen higher averages at $5.3 million in 2012 and $7.8 million as the average new raising in 2011.
7. The largest 2013 IPO raisings? Here the prizes go to Malabar Coal at $20 million, followed by Zeus Resources at $13.5 million.
8. And the 2013 IPO winner by shareholder return? Phosphate hopeful Fertoz (FTZ) takes out the gong for 2013 – rising to 40 cents by year-end from a 20 cents listing price in September.
Here’s hoping for greater activity on the IPO front for mineral explorers in 2014.
Good Hunting
Allan Trench is a professor at Curtin Graduate School of Business and professor (value and risk) at the Centre for Exploration Targeting, University of Western Australia. He is a non-executive director of several resource sector companies and the Perth representative for CRU Strategies, a division of independent metals and mining advisory CRU Group (allan.trench@crugroup.com).
John Sykes is a PhD researcher for the Department of Mineral & Energy Economics at Curtin Graduate School of Business and an Adjunct Research Fellow at the Centre for Exploration Targeting, University of Western Australia. He is also managing director of Greenfields Research, a consultancy focused on exploration and mine project development economics (john.sykes@greenfieldsresearch.com).
