No trouble for North Stawell as it completes one of the biggest Aussie gold IPOs of the past decade
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Special Report: Victorian gold explorer North Stawell Minerals (NSM) has closed its $20 million initial public offering after being inundated with demand and expects to list on the ASX next week.
Reflecting the prevailing market sentiment towards quality gold stories, NSM had no trouble filling the book for its IPO; such was investor interest the company could have raised an amount several times more than it was seeking.
“We are extremely pleased with the response from the market,” CEO Steven Tambanis told Stockhead. “It suggests that not only have we timed the IPO well, coinciding with a rising gold market, but that the value proposition that we presented to investors hit the mark as well.”
The seeds for the NSM IPO were sown 18 months ago when the owners of Stawell Gold Mines (SGM), a private consortium of investors led by the Victor Smorgon Group, decided that a 550km2 package of exploration ground acquired with the mine at the end of 2017 would be better served in a separate vehicle.
The value proposition revolves around the prospectivity of that ground, which takes in 51 strike kilometres of the Stawell Mineralised Corridor and already includes 43 defined gold targets, any of which could produce another multi-million-ounce mine like Stawell.
“When we sat down and looked at all the information from the 40 years of exploration work done here, we saw the potential for 17 more basalt domes very similar to the Magdala dome, which is what the Stawell gold mine is sitting on,” Tambanis said.
“There was quite a bit of excitement about what this tenement package could yield and there was a brief debate about funding it internally out of cashflow over the next four or five years but ultimately the decision was made to spin it out.”
NSM has earmarked $14.5 million of the IPO funds for exploration, with some targets – such as the Wildwood dome, which hosts 55,000 ounces in inferred resources – ready to be drilled immediately.
The company’s plan to hit the ground running post-listing will be aided by a strategic alliance it has in place with SGM, which facilitates the sharing of resources including people, infrastructure and intellectual property.
This will extend to taking critical learnings from new discoveries made at Stawell and applying them to exploration models developed for the NSM tenements.
NSM is effectively offering a third of the company to the public through the IPO process.
Victor Smorgon Group held a 54% interest prior to the IPO, but will be diluted down to 36% upon the issue of shares to new investors.
Arete Capital Partners, the private equity vehicle associated with former WMC boss Hugh Morgan and which operates SGM, holds 5% of NSM, but that will reduce to 3.3% post-listing.
All shareholders invested in the company prior to the IPO will have their shares escrowed for 24 months.
NSM has also assembled a first-class board: former BHP chairman and chief executive Jerry Ellis is non-executive chairman, while world-renowned geologists Alistair Waddell and Graham Brown and Arete Capital Partners CEO Campbell Olsen are non-executive directors.
The company will have a market capitalisation of $60 million when it begins trading and has been assigned the ticker code NSM.
It ranks as the biggest gold float on the ASX since Dacian Gold in 2012, which also raised $20 million in its IPO.
This story was developed in collaboration with North Stawell Minerals, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.