With 10 out of 11 Western Australian resources-focused listings from December 2010 trading above their issue price, 2011 promises to be a strong year for minerals-related investment.
With 10 out of 11 Western Australian resources-focused listings from December 2010 trading above their issue price, 2011 promises to be a strong year for minerals-related investment.
Deloitte WA managing partner Keith Jones said the performance of the 11 listings was a particular highlight of the 49 IPOs launched in WA last year.
Mr Jones said WA stocks increased 40 per cent in the last six months of 2010, and he expected that to continue through 2011.
“On balance it has been a very good year to the 31st of December for commodity prices, but also the quality of the stocks coming to the market have tended to be reasonably good,” Mr Jones told WA Business News.
“They are getting support from the underwriters and investors, having been good assets to start with.”
One of those quality stocks was coal and gold exploration company Attila Resources, which saw its share price spike to 73 cents at close of trade Tuesday, since listing December 8 at 20 cents a share.
Attila executive director Bernardo da Veiga said since the IPO was oversubscribed, there had been a lot of interest in the market from investors that missed out first time around.
“We’re confident about what we’re doing and we’ve got an exciting suite of projects in our portfolio,” Mr da Veiga said. “As far as the general outlook goes, it’s been pretty positive, there is plenty of interest around, and plenty of investors getting back into the speculative buying space.
“All of the signs point for that to continue.”
Another exploration company to have a solid start since listing on December 9 was Haranga Resources, which watched its share price jump to 67 cents by close of trade Tuesday.
Haranga is now focusing on developing its interest in five iron ore tenements which it holds in Mongolia.
Gold exploration company Middle Island Resources was trading at 60.5 cents at close of trade Tuesday, after announcing initial exploration programs had commenced at its Reo and Nassilè projects in Burkina Faso and Niger.
Fellow gold hopeful PMI Gold listed on December 21, and has seen its share price increase to 66 cents.
Other notable listings from December were Kalgoorlie business identity Ashok Parekh’s MacPhersons Reward Gold, which closed Tuesday at 37 cents, and Sheffield Resources, which was trading at 30 cents.
Also, gold explorers Fitzroy Resources and Bulletin Resources ended Tuesday at 22 cents and 20.5 cents, respectively, while gold and copper hopeful Sentosa Mining ended at 23.5 cents.
The only company to have dipped below its initial offering price of 20 cents was Phoenix Gold, which listed December 22 and closed Tuesday at 18.5 cents.
In addition to the December successes, the first IPO out of WA in January has closed oversubscribed, with Invictus Gold raising $4 million. Invictus initially sought to raise $3.5 million, but accepted an additional $500,000 in oversubscriptions.
Patersons Securities executive director and head of corporate finance Aaron Constantine, whose firm brokered listings for MacPhersons Reward and Phoenix Gold, among others, said he expected to see more listings popping up as the year wore on.
“In the last three months of last 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 … there is a base building, and I think we will see more this year, probably occurring at a steadier pace at the end of the year.”