In a bid to bolster its position as one of Australia’s leading South Sea pearlers, Subiaco-based Arafura Pearls Holdings Ltd has made a $3 million acquisition of a pearl farm close to its existing Northern Territory operations after closing its $4 million initial public offer.
The company bought 60 extra units of pearl quota and associated pearl farm about 30 kilometres from its Arnhem Land operations, expanding its quota from 160,000 shells to 220,000 shells, making it the second largest quota holder in Australia behind the Paspaley and MG Kailis alliance.
Arafura Pearls expects to list on the ASX on December 21 – the first Australian South Sea pearl producer to do so – with a post-listing market capitalisation at the issue price of about $30 million.
The company expects to harvest 21,000 commercial pearls this year, up from 7,300 in 2004.
Arafura Pearls CEO Andrew Hewitt said the strong response from investors meant the offer was fully subscribed.
“Pearling has high barriers of entry, with strict quotas to ensure sustainability and investors have recognised that this is not just a sound investment, but a rare opportunity to participate in the iconic Australian pearling industry,” he said.
Arafura was established in 1998 by Mr Hewitt with the development of its pearl hatchery and farming operation around the English Company Islands, north-east Arnhem Land in the Northern Territory.
In a bid to increase the company’s profile, Arafura Pearls appointed Fortescue Metals Group Ltd CEO Andrew Forrest as non-executive chairman in November.
In the year to June 2006, Arafura posted its maiden net profit of $2 million, with most of its operating revenue of $4.4 million coming from managed investment scheme management fees.
Arafura’s profit was also boosted by a $5.6 million gain in the market value of shells and pearls.
The company was looking towards an ASX listing in 2005, however damage inflicted by cyclone activity halted any plans of listing that year.
Meanwhile, Balcatta-based gold and uranium explorer Burey Gold Ltd, formerly Mamba Resources Ltd, closed its IPO oversubscribed by $1.5 million, or 30 per cent, on its $5 million maximum allowable target.
The funds raised will be used for exploration, with $3 million to be spent over two years on its Mansounia gold project in West African nation of Guinea.
Burey is expected to list mid December with 45.2 million shares on issue, with a market capitalisation of $9.4 million.
