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IPO party far from over

s the calendar rolled over into Octo- been working with new IPOs that are and uranium, an unprecedented global
Aber, Sherif Andrawes found himself only looking at getting listed in February/ health pandemic appears to be the main
asking if the rush of resources-based March, so from where I stand the pipe- underlying catalyst for the latest surge of
IPOs was capable of lasting beyond the line is looking pretty full for the next six new floats.
looming Christmas window. months.” Andrawes said the financial uncer-
Fast-forward one month to early No- Copper-gold play Native Mineral Re- tainty caused by the COVID-19 crisis
vember and BDO’s head of natural re- sources Ltd (NMR) is one of the newest and the associated government stimulus
sources was not only planning a suite of arrivals to the ASX at the time of print, packages aimed at keeping economies
new listings for the first quarter of next having raised an oversubscribed $6 mil- afloat during these trying times had cre-
year, but also anticipating the pipeline lion. The company started drilling its ated an unexpected pool of money look-
of mining-focused IPOs would continue Palmerville project, about 200km west- ing to find a suitable home.
well into the second half of 2021. northwest of Cairns, almost immediately “You’ve got all these things happening
“A month ago, I was thinking how long after its stock began trading. at the same time and so it’s resulted in
was this going to last, but a couple of NMR managing director Blake Can- this massive amount of money and mas-
things have happened since then,” An- navo said a detailed two-year explora- sive demand for these particular com-
drawes explained to Paydirt on the side- tion plan for its projects had been a key modities,” he said.
lines of Africa Down Under. point of difference with interested IPO “There’s a lot of money, particularly
“One is that Diggers & Dealers was investors. in Australia, in superannuation funds,
a very confident conference and I think “Usually most exploration companies PE funds, endowment funds, pension
quite a lot of transactions have come upon listing take anywhere from 3-9 funds…basically, institutional money
from that and will turn into things next months to start drilling because they that needs to justify itself and give a re-
year. I had the opportunity to catch up have to go and find their targets, where- turn to investors.
with quite a lot of the brokers and advi- as we have 10 drill-ready targets to hit “While COVID is around, the govern-
sors there and, without any exception, straight off the bat,” Cannavo said. ment policy is all about stimulus. And
they’re all saying [the pipeline of IPOs “Our chief financial officer Emma stimulus is generally about infrastruc-
will continue] at least until the middle of Dooley has done a brilliant job in map- ture and building things. So, if you’re go-
next year. Some were even saying to- ping out where all of that [IPO] money ing to build things – whether it’s bridges,
wards the end of next year; there’s no will go. We’ve got estimations for every airports, houses, whatever it might be
sign of this changing. cent of our expenditure. As a company – you’re going to need materials for that
“The reasons for that come back to in- we will be very transparent in how we and those materials, very simply, need to
terest rates being low for longer, COVID operate.” be dug out of the ground and that’s why
stimulus being there for longer…all of The ASX had 10 new resources floats a lot of mining and exploration stocks are
those things aren’t going to change for waiting to list before Christmas. An- in favour.”
at least the next 18 months and while drawes likened the current rush of IPOs Of the 10 new listings expected to join
they’re in place, the same situation will to a period two years before the GFC in the ASX before the end of the year, more
remain. late 2008 when he was typically working than half feature a connection to gold in
“For anyone wanting to get listed be- on one new float a fortnight. the prospectus.
fore Christmas, that window has now While that period coincided with a Andrawes said while new gold floats
closed. In the past couple of weeks, I’ve boom in commodities such as iron ore were typically the easiest to launch,

While most Victorians cannot wait to see the back of 2020, the “That charge has obviously been led by Fosterville making
team at North Stawell Minerals Ltd (NSM) have other ideas. that magnificent discovery in late 2015. It’s currently the
world’s highest grade and most profitable mine and I think it’s
Amid the longest lockdown period in an Australian state this
year due to a major outbreak of COVID-19, NSM listed on the made people realise there still might be a little bit of gold left
ASX following a $20 million IPO in late September. in Victoria after all.”
It was a milestone likely glossed over by many locals due NSM could not have asked for a better start to life on the
to their focus being elsewhere, but that failed to dampen ASX with its stock peaking at 55c/share within a month of its
the spirits of those at NSM, including chief executive Steve trading debut.
Tambanis. With $20 million in the kitty, the company has more than
“We had a phenomenal response to kicking off the IPO enough funds to complete an “aggressive” 75,000m
process,” Tambanis told Paydirt. “We basically stopped drilling campaign across its 550sq km tenement package,
doing presentations in the first week because we had more immediately adjacent to the 5 moz Stawell gold mine in north-
than enough support and interest to kick off a $20 million IPO. west Victoria, over the next two years.
“Victoria as a state is underexplored compared to the rest Drilling kicked off at the Wildwood prospect last month. It is
of Australia, it is actually one of the world’s most prolific one of about 40 priority targets identified by the company’s
orogenic gold belts and I think it’s fantastic to see so much geological team prior to listing.
interest in Victoria at the moment. There’s maybe 30 listed “The focus for us is going to be on Magdala-style domes
producers and explorers in Victoria now, whereas there and we have quite a few domes that we can see with the
wasn’t the fraction of that amount two years ago. geophysics in our tenure,” Tambanis said.

aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 13