Western Australian-based resource stocks continue to fly the initial public offering flag for the September quarter, with over three quarters of all IPOs involved in mining and exploration.
Western Australian-based resource stocks continue to fly the initial public offering flag for the September quarter, with over three quarters of all IPOs involved in mining and exploration.
While our state notched up the biggest IPOs for the September quarter, including $941.9 million raised by heavy transport and machinery equipment supplier to the mining industry Emeco Holdings, which accounted for 88 per cent of the $1.1 billion raised, the best performing IPOs weren’t necessarily the biggest.
Of interest was the focus on base metal explorers in the best performers list, with the top three performers involved in gold, nickel and copper exploration.
Uranium stocks took a back seat, with only two uranium-based IPO’s for the quarter, compared to four last quarter.
Deloitte Corporate Finance partner Steve Woosnam said September was usually lower than the June quarter, which attracted a rush of IPOs in the lead up to the end of the financial year.
“The value of funds raised was kept high this quarter by the resources sector and related activity, and by infrastructure floats,” Mr Woosnam told WA Business News.
“The resources boom was still not over for IPO investors, despite recent falls in commodity prices and investor nerves about the resources sector.”
Mr Woosnam said the likes of Emeco, and mining services and contracting company Mineral Resources Ltd, illustrated that the resources boom had filtered through to related sectors.
The best performing stock since listing in mid-July is gold and nickel explorer Shannon Resources, which has witnessed a 275 per cent gain on its issue price, recently closing at 75 cents after issuing at 20 cents.
The junior gold explorer, which is chaired by Carrick Gold’s chairman Frank Carr, earlier raised $2.6 million, with funds raised to be used mainly for resource definition and exploration of two mineral projects in the eastern Goldfields.
Junior gold and nickel explorer Redstone Resources Ltd came in second position, with its share price soaring 172 per cent to 68 cents since listing at an issue price of 25 cents in early August.
Redstone listed after raising $5.5 million from the issue of 22 million shares.
In its prospectus, the company said $4 million of the funds raised would be used to fund a two-year mineral exploration and development program of its projects, including more than $2.3 million to fund the development of its West Musgrave projects, which feature nickel, copper, gold and silver deposits.
The company, which listed on the ASX at an issue price of 25 cents, reached highs of $1.01 in mid-August, a 304 per cent increase on its issue price, before falling back to 68 cents.
In third position was West Perth-based gold explorer and developer Ironbark Gold Ltd, whose share price climbed 125 per cent to 45 cents after listing in mid-August at an issue price of 20 cents.
The company raised $3 million to seek out mineral deposits at its Belara, Stuart Town and Pambula projects.
One of the few non-mining exploration companies to list this quarter, mining services and contracting company Mineral Resources, came in the top five with a 58 per cent increase.
The only uranium explorer to make a gain on its issue price, Uranium King, came in fifth position with a 46 per cent increase.
However, the contrast between the best performing and the largest IPO of the quarter could not be more apparent.
Emeco Holdings’ $941.9 million IPO, the biggest in Australia for the quarter, experienced a six per cent fall from its issue price of $1.90 to $1.79.
The two non-mining IPOs, biofuels company Sterling Biofuels and olive oil producers Frankland River Olive Company, were the least performing IPOs for the quarter, with 30 per cent and 34 per cent reductions respectively from their issue price.
