IPO watch: Here’s what’s happening with 24 ASX resources floats
A dozen miners are planning to debut on the ASX in coming weeks including Primero Group, which aims to be the local bourse’s first new “mining services” stock in about seven years.
(Another dozen miners have recently listed or postponed IPOs — see our table below for the latest details.)
Mining services companies provide machinery, labour and consumables to undertake mineral extraction activities for miners. Here’s an article we wrote on the sector in February.
GR Engineering Services (ASX:GNG) was the last mining services company to list on the ASX following a $30 million initial public offer. That was back in April 2011.
Fast forward seven years and Primero Group has launched a $25 million IPO priced at 40c a share.
Primero has been around for almost seven years and emerged to fill a void in engineering, procurement and construction (EPC) services to the mining sector.
“Back then, in 2011, there was a lot of work in the Western Australian sector,” founding managing director Cameron Henry told Stockhead.
“We saw a real void or vacuum in the market for that sub-$50 million EPC project delivery.
“During that period all the companies around Perth, instead of doing $50 million or $100 million projects they were all doing $300m, $400m and $500m projects.”
Primero managed to capture a good chunk of the market and since then has turned over about $250 million worth of work. It now has offices in Western Australia and Montreal, Canada and more than 320 staff – which is expected to grow to 450 early next year.
Primero operates in three sectors – minerals, energy and non-process infrastructure.
Current clients include Finnish energy player Wärtsilä, mining heavyweights Rio Tinto (ASX:RIO) and Fortescue Metals (ASX:FMG) and Australian lithium producers Galaxy Resources (ASX:GXY) and Tawana Resources (ASX:TAW).
While Primero sees all three sectors as growth sectors over the next three to five years, a large chunk of the company’s work comes from the lithium sector in particular.
“There’s been a bit of a drop in the lithium stocks in the last few weeks and I think that’s just from the equity guys jumping out because they are overweight and they’ve made a lot of money in them,” Mr Henry said.
“But there’s no doubt the EV [electric vehicle] revolution is going to change the world. It’s disrupting technology and it’s just going to continue.
“We get sought out at the moment by a lot of international and global companies from North America, South America, Africa and Europe for our expertise specifically in the lithium space, both upstream and downstream.
“We’re definitely building a very strong name in that sector.”
Primero has had a number of big-name Australian funds come onto its register Mr Henry says — placing it in good stead to list in early July.
Meanwhile, the influx of exploration companies onto the ASX is continuing with two new IPOs.
Here’s a list of 24 recent, upcoming or postponed ASX resources floats:
Swipe or scroll to reveal full table. Click heading to sort.
Who’s next to float?
Western Australia-focused gold explorer Coolgardie Minerals is undertaking an IPO to raise a minimum of $4 million at 20c per share.
The company owns the Bullabulling gold project, which comprises the Geko project and five other prospects. Coolgardie has spent five years and $9 million on identifying drill targets.
The IPO will be used to fund drilling to uncover potential extensions to the Geko project and the First Find and Endeavour prospects.
Coolgardie is aiming to list by July 18.
Base metals explorer Tempus Resources has launched an IPO to raise $5 million at 20c per share.
The company is acquiring a 90 per cent interest in Montejinni Resources, which owns the Montejinni project in the Northern Territory and the Claypan Dam project in South Australia.
Both projects are believed to be prospective for copper as well as other minerals such as zinc, nickel and rare earths.
Tempus expects to hit the boards of the ASX by July 30.
Bounty Mining (ASX:B2Y) is the next miner due to make its debut on Tuesday.