02/07/2021 - 12:00

Copper producer joins the ASX

02/07/2021 - 12:00


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A mining company with a major copper-zinc asset in Western Australia has listed on the ASX after raising $528 million.

29Metals owns and operates the Golden Grove copper-zinc mine in the Mid West. Photo: 29Metals

A mining company with a major copper-zinc asset in Western Australia has listed on the ASX after raising $528 million.

Based in Melbourne, 29Metals owns and operates the Golden Grove mine in WA’s Mid West region and the Capricorn copper mine in Queensland.

The company was owned by private equity manager EMR Capital, which retains a 45 per cent stake in 29Metals.

It issued almost 264 million shares through an initial public offering, which was priced at $2 per share and led by Credit Suisse and Morgan Stanley Wealth Management.

29Metals began trading on Friday, with its share price closing up slightly to $2.03 per share.

That implies a market capitalisation of about $975 million.

In its prospectus, 29Metals chairman Owen Hegarty - who co-founded EMR Capital - said the miner was planning to become a leading ASX-listed copper producer, developer and explorer.

“We are at the dawn of a new era for copper demand and, through its use in a wide range of applications, we believe copper is well-placed to capitalise on global growth, urbanisation and continued expansion in consumer demand,” he said.

“Copper will also play a pivotal role in the electrification and decarbonisation, and the global shift to a greener economy.”

Mr Hegarty said the company planned on boosting its total production by more than 50 per cent within the next five years, noting a pipeline of organic growth opportunities, including productivity and operational improvements, in-mine and near-mine growth, and continued exploration.

These are also expected to drive down unit operating costs, Mr Hegarty said.

29Metals has invested more than $400 million in its producing assets since they were acquired by EMR Capital, with throughput up 44 per cent and 36 per cent at Golden Grove and Capricorn, respectively, since 2017 and 2018.

Both assets have a mine life of more than 10 years.

29Metals, which has combined reserves of 901,000 tonnes (copper equivalent), also produces zinc, gold, and silver.

They contributed 20 per cent, 22 per cent and 7 per cent, respectively, to the company’s $625 million in revenue reported for the 2020 financial year.

29Metals' underlying earnings were $176 million for FY20 and net profit after tax $33 million.

The company has predicted an even stronger result in FY21, with revenue expected to be $665 million; earnings $221 million; and NPAT $37 million.

Mr Hegarty is a former director of ASX-listed companies OZ Minerals and Toro Energy. He was also a director and the vice chair of iron ore giant Fortescue Metals Group between 2008 and 2016.

The 29Metals board also includes managing director Peter Albert, who is the present chief executive of EMR Capital's copper assets.

Messrs Albert and Hegarty were also former colleagues at ASX-listed Highfield Resources.

Mr Albert led the company as managing director between 2016 and 2020, while Mr Hegarty was a non-executive director between 2013 and 2020.


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