THE launch of Australia's largest initial public offering this year, by copper mining and exploration company Q Copper, has highlighted the growing investor appetite for mining developments.
THE launch of Australia's largest initial public offering this year, by copper mining and exploration company Q Copper, has highlighted the growing investor appetite for mining developments.
THE launch of Australia’s largest initial public offering this year, by copper mining and exploration company Q Copper, has highlighted the growing investor appetite for mining developments.
In the past month, WA companies and projects have launched capital raisings collectively worth almost $800 million.
Q Copper has launched a prospectus to raise $214 million, which it will use in an attempt to acquire a 100 per cent interest in Queensland’s Lady Annie project from Cape Lambert Iron Ore.
The precious metals market has been particularly active, with Perth-based gold miner Allied Gold recently launching a $158 million initial public offering.
Apex Mining, Perilya and Perseus Mining are other miners to have launched major capital raisings in the past month.
Patersons Securities head of corporate finance Aaron Constantine said the raisings are a positive sign after a difficult 12 months.
“From our perspective, there are a lot of capital raisings out there which is a function of companies both continuing to recapitalise and companies that are getting on the front foot and making acquisitions and doing things,” he said.
DJ Carmichael managing director Ian Dorrington said with the outlook improving for companies, capital raisings are now being made to fund major projects.
“What you’re seeing up until a couple of months ago was a vast majority of companies raising capital almost solely to survive and it wasn’t necessarily project specific; it was more to do with repairing the balance sheet and putting the company back on an even keel from where they can then proceed with project development,” he said.
“What you’re starting to see now is companies are back on an even keel, they’re now going out and they’ve got projects.”
Mr Dorrington said the number of raisings may fall in favour of larger amounts being sought by companies to undertake larger projects.
“The number of raisings is diminishing but the amount of money is still fairly significant because a lot of these resource companies are going to provide handsome returns to shareholders over the next 10 years, you do need fairly large sums of cash to get those projects up and running,” he said.