THE combination of attractive exchange rates, sustained high gold prices and heightened political risk in other nations is boosting overseas interest in the smaller end of the Australian gold market.
THE combination of attractive exchange rates, sustained high gold prices and heightened political risk in other nations is boosting overseas interest in the smaller end of the Australian gold market.
Ahead of a March ASX listing, Apollo Gold Mining chief executive officer Dudley Kings-north has discovered “healthy” overseas market sentiment towards Australian gold stocks.
Apollo last month embarked on a presentation tour to London, Toronto and New York, where Mr Kingsnorth said he found keen interest in new greenfields opportunities in Australia.
International Goldfields and Hamill Resources chairman Antony Sage agreed there was a lot of interest, in particular out of Canada and London, and would be re-turning to London next week.
Last May, when the stock was at 26 cents and Australian placements had been offered at just 20 cents, International Goldfields had raised $2 million out of Europe at 35 cents per share.
Although a lot of the Northern Hemisphere interest in Inter-national Goldfields was on account of a Romanian project containing 13 million ounces of gold and 68 million ounces of silver, there was also plenty of interest in the WA project, Mr Sage said.
With Africa out of favour on account of high risk in many areas, WA projects with the right amount of ground in the right location could attract more interest.
Local listed junior Oroya Mining reports good support from Asia, where the company has been raising funds on a private basis.
Oroya managing director Steve Shedden said overseas funds were mostly interested in companies with market capitals of at least $50 million, and some junior companies had been disappointed with investment levels following listings on the London Stock Ex-change’s Alternative Investment Market.
The junior end of the investment market operates, to some extent, independently of general market sentiment, and with stronger nickel and gold prices, interest is certain-ly stronger than in the past two years, Apex Minerals executive chairman Stephen Stone said.
Mr Stone said there was a moderate level of overseas interest in the Apex 2001 IPO issue, but the company raised the majority of its funds locally.
Minjar gold producer Gindalbie Gold went to London for the first time late last year, and will return in April.
Gindalbie company secretary Darren Gordon said the operation had taken a lot of comfort out of top-three shareholder Lion Select-ion Group’s decision to invest.
An individual investor from New Zealand holds about 9 per cent of the company.
In general, a company needed to build some good relationships to attract greater overseas interest, to go to where potential overseas investors were, and to maintain good websites, Mr Gordon said.
Two local gold companies with IPOs still open – Midas and Savannah Gold – have reported overseas interest but could not divulge quantities.
However, Savannah managing director Harjinder Kehal said his company already had some overseas shareholders.
Midas managing director Rhod Grivas said that, while the interest would add to the spread of investors, the company was over-whelmed by the extraordinary interest now coming from institutions and sophisticated investors in eastern Australia.
Apollo is seeking to raise $A5 million in a 25 million share-plus-attaching-option offer, launched late last year, but now extended twice.
Mr Kingsnorth said Apollo now had over half the amount it was seeking, with one third of that coming from North America and Europe.
Although Apollo was a small company in terms of overseas investment interest, Mr Kingsnorth said the prospectivity of Australia was recognised. Apollo will have 320 kilometres of tenements in highly prospective territory and a market capitalisation to ounce of gold ratio of $A20/ounce.
This was quite competitive, Mr Kingsnorth said, when compared with an average $A40-80/ounce ratio for most small companies.
Oroya plans to recommission the Mt Gibson gold mine later this year, on the back of a recently completed pre-feasibility study.
Apex is drill testing and soil sampling in its Paynesville mine interest, part of the Windimurra superproject, of which the company holds 80 per cent.
Gindalbie has produced 67,000 ounces of gold since December 2001. The company has allocated $4.5 million this year for further exploration, and is expecting to boost its proven reserves by a further 150,000 ounces.
Major announcements aside, most Australian gold stock prices have not progressed significantly since gold went to $330 last year, and current global uncertainty is expected to produce some discounting and selling.
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