From de Bernales to Bondy – Twigger’s Tales has seen it all
I first came across the name Claude de Bernales when I saw it on an old share certificate.
It had his actual signature on it and was one of the more valuable pieces of share script that Robert Holmes a Court had in his collection. One of my many jobs as a treasury assistant in the office of the Bell Group was bidding for and collecting these rare old certificates – that was when I wasn’t recording investments from the latest BHP raid or picking up the chairman from the helipad in his coveted Rolls Royce.
Claude was among the first in what would become a long line of West Australian mining entrepreneurs. He raised money in London and accumulated vast wealth through complex and elaborate schemes that saw him acquire many and varied mining companies in the 1920s and 30s. Like many other initially celebrated WA mining entrepreneurs however, de Bernales ended up in financial difficulties – and ultimately died a recluse in the UK in 1963, but not before leaving a lasting legacy on an industry that would become synonymous with the State.
My work with Bell Group marked my first involvement in the WA gold industry and captured all the hallmarks of the business such as great promotion, innovative funding, a boom and more often than not, the eventual bust. My next job was as assistant treasurer at Bond International Gold, rounding out my curious involvement with two of WA’s so-called “four-on-the-floor” entrepreneurs.
Alan Bond, a modern day version of de Bernales, brilliantly conceived and executed the consolidation of the rich gold mines along the Golden Mile in Kalgoorlie and had the vision to combine them all into one giant Super Pit. I remember the sales pitch to bankers and prospective investors at the time: “This open pit will be so large, you’ll be able to see the size of the hole from the moon”.
It was a fabulous line at the time, but not exactly a marketing pitch that would go down well in today’s ESG climate. How times change!
The Super Pit is arguably Alan Bond’s best legacy, but he was forced to offload it to the Normandy-Poseidon Group in 1989 when his empire collapsed under the weight of too much debt. De-Bernales lives on in Kalgoorlie, too, courtesy of his namesake hotel that looms large among the Goldfields mining glitterati at 193 Hannan Street.
The London (LSE) and Toronto (TSX) stock exchanges have taken turns in being the centre of mining capital for the world, with billions of dollars raised on their markets to fund mining and exploration across the globe. Mining entrepreneurs have created a well-trodden path to these exchanges to get access to the pools of capital they provide.
The Australian Securities Exchange (ASX) has generally played a supporting role and until recently, has never been seen as the primary exchange and source of capital for mining and exploration. However, the past six years have seen an incredible shift in the centre of gravity for the raising of equity funding for the mining industry.
Mining capital has moved away from the northern hemisphere and into Australia and the ASX. This is an incredible achievement, with the ASX outperforming the LSE and the TSX in terms of mining capital raisings in almost every year since 2018.
Given the proximity of the huge wealth in the USA to the TSX and the European community to the LSE, it is hard to believe how this has been achieved by Australia. It is testament to the confidence global investors have in the governance and market knowledge provided by the ASX and its regulators.
Furthermore, in terms of mining IPOs – essentially the ultimate market barometer for risk-taking as these are generally small companies raising risk capital for exploration plays – the ASX has completed 203 mining IPOs since 2018, compared with 18 on the LSE and 40 and the TSX. Without a doubt, the ASX is currently the preferred global conduit and source of mining and exploration capital and within that, Perth is the centre of the mining universe.
It’s the place where most mining companies are domiciled and where you will find the skills, expertise and know-how for any mining task.
As Twigger’s Tales likes to say, “If you want to be the best in the world in making movies, you go to Hollywood. If you want to be the best in the world in technology, you go to San Francisco. For fashion, you go to Paris. For mining, if you want the best people, ideas, innovation and capital – you come to Perth!”
That could well be a first for the WA business community, but we have been very humble and slow to recognise this incredible rise and the achievement of a global leadership position. So now, let’s take a bow!
And while the gun-slinging days of de Bernales, Bond and Holmes a Court are mostly now in the rear vision mirror, even they would find it difficult to believe that the little old ASX is now out-funding the TSX and even the LSE when it comes to mining and exploration plays – and Twigger’s Tales reckons, long may it continue.
Liam Twigger is the deputy chairman of Perth stockbroking, funds management and corporate finance firm Argonaut and he draws from more than 30 years of experience in corporate finance to regale you with his market tales. After starting his career as a professional soccer player in the UK, before working in the 1980s for corporate raiders Robert Holmes a Court and Alan Bond, he moved into investment banking in the 90s when he established Macquarie Bank’s Bullion and Commodities division in WA before establishing PCF Capital, which later merged with Argonaut. While he is an executive director of Argonaut (AFSL 221 476 ), this column is for information and entertainment purposes only and is not intended to constitute financial advice. The views and opinions contained within are those of the author and do not necessarily represent those of Bulls N’ Bears, this media outlet or Argonaut.