Investors have welcomed a flurry of Western Australia-based listings in the minerals exploration sector, with 10 out of 11 companies to float during the past month trading above their issue price.
Investors have welcomed a flurry of Western Australia-based listings in the minerals exploration sector, with 10 out of 11 companies to float during the past month trading above their issue price.
Coal and gold exploration firm Attila Resources kicked off the burst in activity on December 8, and is now trading at 60c after its IPO, priced at 20 cents, was oversubscribed.
Attila raised $2.2 million from the listing and says it is now in a position to ramp up exploration of its tenements and "pursue other opportunities".
Attila's listing was followed by the listing of Queensland-focused gold explorer Fitzroy Resources and exploration company Haranga Resources on December 9.
Fitzroy has remained steady at 20c, while Haranga's share price has spiked to 67c.
West Perth-based Oakland Resources was the next cab off the rank on December 14, and is currently trading at 26c.
Sheffield Resources floated on December 15, and has since seen its share price jump 6c to 26c.
On December 16, gold exploration firm Middle Island Resources was launched, with the company now trading at 58.5c after announcing initial exploration programs had commenced at Middle Islands' Reo and Nassilé projects in Burkina Faso and Niger.
Middle Island's float was followed by the listing of gold and copper explorer Sentosa Mining on December 17.
Sentosa Mining is currently trading at 25c.
Gold explorer Bulletin Resources listed on December 20, and has remained steady at 20c, while fellow gold hopeful PMI Gold listed December 21, and has seen its share price nearly triple to 57.5c.
And on December 24, Kalgoorlie business identity Ashok Parekh led the listing of Macphersons Reward Gold, which is now trading at 38c.
The only firm to have dipped from its initial 20c offering was former Norton Gold Fields general manager Jon Price's Phoenix Gold, which listed on December 22 and has since slipped to 18c.
Deloitte WA managing partner, Keith Jones, said the spate of positive launches were thanks to the strength of the equities market.
"The Western Australian market has had very, very strong year, with stock prices up 40 per cent in the last six months, mainly focused on the small- to mid-market companies," Mr Jones told WA Business News.
"There is a certain strength in the marketplace and that's really underpinned by the strength in commodity prices.
"On balance it has been a very good year to the 31st of December for commodity prices, and also the quality of the stocks coming to the market have tended to be reasonably good.
"They are getting support from the underwriters and investors, having been good assets to start with."
There were 49 IPOs launched in Western Australia in 2010, according to Deloitte research, but Mr Jones said the 11 listings in December were a culmination of four to five months' planning for most firms.
He said he expected listings to ramp up again in March as activity recommences after the holiday break.
Patersons Securities executive director and head of corporate finance Aaron Constantine, whose firm brokered listings for Macphersons Reward and Phoenix Gold, among others, agreed, saying market conditions had steadily been on the improve in the second half of the year.
"In the last three months of the year, you did see a pickup in activity, and a lot of secondary raisings," Mr Constantine said.
"Once you get a lot of secondary raisings going through the marketplace and people start to make money, the window opens a little bit for IPOs.
"For us, the window opened, and it was also just a function of the right people, the right assets and the right structure at that time.
"There is always a little bit of luck about it, I wouldn't get carried away with it saying that its rip roaring, but there is a base building, and I think we will see more this year, probably occurring at a steadier pace as opposed to a bit of a flurry at the end of the year."
