Strong interest in Oceana float

THE managing director of the biggest gold float to hit the Australian stock market since the gold price collapse six years ago says the yellow metal has attracted strong overseas investor interest in the float.

Oceana Gold is the $100 million gold spin-out of Perth-based engineering and mining provider, GRD.

When it floats today (March 18), Oceana will be a top five ASX-listed gold company with a market capitalisation of $360 million.  Oceana managing director Patrick O’Connor said the miner held the three principal gold assets in New Zealand, including the large producing Macraes goldfield

The strong overseas institutional interest came from Asia and Europe as well as Australia and resulted in a scale back of allocations in Oceana.

The market capitalisation was reduced from $400 million to $360 million last month.

Despite varying the pricing of the IPO – because of the lower Australian gold price and lower share prices for Australian gold producers – Mr O’Connor said the market welcomed Oceana.

 “To bring in a mid-capitalisation gold producer [was] seen as positive,” he said.

“Needless to say if you have a quality product, you will always be able to raise money.”

Resources analyst Greg Chessell, for joint lead manager of the float, Euroz Securities, said the float, which had received good professional and retail investor support, was tipped to do well.

Mr Chessell said the separation of the gold business from the rest of GRD’s operations attracted a number of new players into the stock.

Oceana’s slated development of its gold assets offered investors significant growth, he said.

“Plus it is an alternative to the very small universe of decent size gold plays on the ASX,” Mr Chessell said.

GRD, which posted a strong result this year, will receive $50 million from the deal, which will be, in part, redeployed in its growing waste management business, Global Renewables.

GRD, which will retain 56 per cent of Oceana, offered 50 million shares at $1 to new and cornerstone investors in Oceana, while GRD shareholders were offered 16 per cent in a 2.4 buy-back for each GRD share.

“It (Oceana Gold) is an alternative to the very small universe of decent size gold plays on the ASX.”

-         Greg Chessell