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that may have struggled “ For juniors, IPOs are pretty much looking to float, the news

off the table. In saying that, there is
LSE is now becoming
opportunity for the market and it is kind of
and a lot of companies
services sector.
Connelly, who is non-
to access public mar- ironic, there is money out there to invest in was brighter for the mining
kets directly are going equities, but not at the junior end. executive chairman of
through other routes. It multidisciplinary engineer-
is definitely a trend and ing outfit Primero Group
at some point going public is the natural ing raised in equity markets typically be- Ltd, said taking the company to the ASX last
progression for them,” Walker said. ing done by mid- to large-tier companies. year “was the best thing we ever did”.
The LSE has experienced an influx of Large deals are getting done, small deals Being open to public funding immedi-
interest in dual listings with a handful of are struggling,” Walker said. ately provided Primero with balance sheet
ASX companies landing there. Seven Traditionally, the ASX and TSX bourses strength and access to pools of capital es-
Toronto-listed companies followed suit have cajoled the mining crowd, particular- sential to capitalise on the opportunities
in the last 18 months to tap into $US300 ly at the junior end, which is lacking gusto needed to grow the business, Connelly said.
billion worth of funds under mandate in at the moment.
the UK. Alongside Walk-
In terms of Africa specifically, the LSE er and Connelly,
is endowed with 114 companies with in- the expert financ-
terests on the continent. ing panel unani-
“They are worth about $US204 billion, mously agreed the
making the LSE the second largest Af- current climate is
rican exchange in the world, and when among the worst
you are meeting with investors you hope- ever experienced
fully don’t have to convince them about by junior mining
Africa. You are talking about the asset stocks.
and what you are trying to achieve and If IPO activity is
not about the geopolitics of the country in a good gauge of
which you are operating. It is those mes- the temperature
sages that seem to be a draw to being in the sector, the
listed there,” Walker said. mercury suggests
“Some 23% of the combined market a massive cold
cap of every listed mining company glob- front is sweeping
ally is on the LSE. ASX is second and over the junior min-
has about 50% less, so it is a hugely ing landscape.
knowledgeable community of investors.” In 2018, more
Australian companies to have sought than $US400 mil-
an additional listing on the LSE include lion was raised globally for IPOs pointing Sherif Andrawes
Resolute, Mod Resources Ltd, Danakali towards an exploration renaissance but
Ltd and Lucapa Diamond Company Ltd. so far this year a mere $US10 million has
Each has opted for a dual listing in the been tipped into new offerings. Primero’s success is enticing others in
UK to broaden their optionality to capital. “We do a lot of junior IPOs... and there the sector to consider public listings, giv-
“You are still seeing plenty of money be- are none in the pipeline whatsoever ing Andrawes and team much welcomed
right now,” BDO activity.
Australia Global “There are half a dozen companies
Natural Resources that are coming to market in the next 6-9
leader Sherif An- months looking at raising $25 million to
drawes said. $100 million. That side of the market is
“For juniors, quite strong. Once they are listed and
IPOs are pretty have a profile, they are then able to grow
much off the ta- quite strong,” Andrawes said.
ble. In saying that, With METS companies flourishing and
there is opportu- mid-cap and large companies enjoying
nity for the mar- the benefits of strong commodity prices,
ket and it is kind junior resources companies are left be-
of ironic, there is moaning their status as the odd one out.
money out there to Debt is still readily available for develop-
invest in equities, ment projects but filling the equity compo-
but not at the jun- nent of project finance has proven more
ior end.” difficult. While they wait for the tide to turn
Interestingly, on equity markets, juniors are becoming
while the cup- increasingly creative in finding ways to re-
board is bare of main viable, including striking deals with
mining companies royalty and streaming companies.
Roddy Barclay

Page 22 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT