19/06/2019 - 14:10

Gold explorer scraps listing plans

19/06/2019 - 14:10

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The tally of new ASX listings from Western Australia remains at just two this year, with Gold Tiger Resources (Australia) canning its IPO after being hit by weak equity markets and gold sector woes and having to issue a supplementary prospectus.

Gold explorer scraps listing plans
Only two WA explorers have listed this year.

The tally of new ASX listings from Western Australia remains at just two this year, with Gold Tiger Resources (Australia) canning its IPO after being hit by weak equity markets and gold sector woes and having to issue a supplementary prospectus.

Gold Tiger had been seeking to raise $4 million through an initial public offering and lodged its original prospectus in mid-March.

It was required to lodge a supplementary prospectus in early April and extended the closing date for the offer to June 14, but on that date withdrew its listing application.

The company has made no comment on the withdrawal but Business News understands it struggled to attract 300 shareholders to meet the minimum ‘spread’ test.

There was a dearth of new ASX listings during the period when Gold Tiger was seeking to complete its IPO, especially among mineral explorers.

The BNiQ database shows the only WA explorers to have listed this year are Mont Royal Resources and African Gold.

There has also been a run of negative news in the gold sector over the past few months, despite the high $A gold price.

Coolgardie Minerals and Gascoyne Resources have gone into administration while Dacian Gold hit production problems, adding to investor caution.

Perceptions of Gold Tiger may also have been coloured by the added disclosure in its supplementary prospectus, including details of its major shareholders and a legal dispute over some of its tenements.

The company is controlled by Bradley Green and Tanvanth Sandhu, who have worked together for several years to develop the Credo project, which is the company’s main asset.

Mr Sandhu previously held the Credo tenements, located north-west of Coolgardie, while Mr Green is a mineral economist and accountant engaged by the company as an unpaid consultant.

Collectively they hold 25.8 million shares in the company, acquired at a price of 1 cent per share.

That is out of a total of 33.4 million shares currently on issue.

They also hold 40 million performance shares, which would have converted to ordinary shares at no cost if the company achieved an inferred JORC resource of 500,000 ounces within five years.

To put these numbers in context, Gold Tiger was seeking to issue 20 million shares at 20 cents each in its IPO.

Hence, the two major shareholders would have maintained dominant stakes in the company, especially if they were able to convert their performance shares.

Gold Tiger’s third major shareholder was Millennium Minerals Pte Ltd, a private investment company incorporated in Singapore in December last year.

Millennium bought 5 million shares prior to the IPO at 10 cents per share, and agreed to invest up to $2 million via the IPO to ensure Gold Tiger reached its minimum capital raising target.

It is associated with wealthy Indonesian investor and business executive Rachmat Mulyana Hamami.

Gold Tiger’s chairman, Ghani Yusoff, is on the board of Millennium and is a long-term employee of Mr Hamami’s group.

This relationship was not disclosed in Gold Tiger’s original prospectus but was spelt out in the supplementary prospectus.

Among other things, the supplementary prospectus also provided details on Mr Green’s professional background and role with the company.

In addition, it included detailed disclosure of a legal dispute over some of the company’s tenements. The company said its most prospective tenements were not subject to this dispute.

The lead manager for the Gold Tiger IPO was West Perth-based Grange Capital Partners, while the investigating accountant was Stantons International Securities and the legal adviser was Steinepreis Paganin.

Gold Tiger’s managing director was Andrew Hawker, a geologist with 30 years’ experience. He was to be paid an annual salary of $200,000.

Its non-executive directors included David Riekie (formerly of Grange Consulting) and Jonathan Asquith, who both have broad experience as company directors.

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