Gold price surge sparks new rush to IPO

Floats are gathering in the hottest space on the market, as companies try to capitalise on the surging gold price to get an IPO away.

Companies are hoping to capitalise on the surging gold price to get an IPO away.

Floats are gathering in the hottest space on the market, with former BHP chairman Jerry Ellis to lead North Stawell Minerals’ charge onto the boards, hoping to capitalise on the surging gold price to get an IPO away.

The gold price smashed through a decade old record this week, in US dollar terms, and junior gold explorers with even the sniff of the precious metal on their tenements have been able to raise cash.

And if gold is the hot space in the market, the Victorian gold space is among the hottest parts of it after the stunning success of Canadian-listed Kirkland Lake Gold’s rejuvenation of the Fosterville mine in Bendigo.

North Stawell controls 550sq km worth of tenements spun out of the holdings of the historic Stawell gold mine, returned to production by a consortium led by the Victor Smorgon Group and Hugh Morgan’s Arete Capital in early 2019.

Although North Stawell only lodged its prospectus on Wednesday, it is understood Sequoia Capital, which is managing the float, already has firm commitments for a substantial portion of $20m raising required to get it on the market, with Victor Smorgan Group and Hugh Morgan’s Arete Capital both diluting down as part of the float.

It plans to raise $20m at 50c, with the company’s existing owners to emerge with 66.6 per cent of the company. The Victor Smorgon Group will dilute its ownership from 54 per cent to 36 per cent, and Mr Morgan’s Arete will move from 5 per cent to 3 per cent.

Chief executive Steven Tambanis said the plan is to use modern technology to take a fresh look at tenements.

He said the company had already identified 43 exploration targets for drilling from historical data, on top of the 55,000 ounce resource already identified at its Wildwood prospect.

“We’re going to raise $20m and do 75,000m of drilling over the next two years, and we’re going to hit this hard,” he said.

“Victoria is under explored. I’ve been in Melbourne 26 years now, and I’ve seen a few iterations of Bendigo and Ballarat and really not much more. Given the historic resources that have come out of Victoria, I think it’s going to be wonderful — this new renaissance in Victorian exploration investment is going to deliver more mines going forward,” he said.

North Stawell is hoping to replicate the success of Canadian listed Fosterville South, spun out of Kirkland Gold in April with a raft of tenements surplus to the requirements of the Bendigo gold miner.

Fosterville South was worth $C1.10 ($1.15) when it raised $C15m a month after its April float, and is now trading at about $C4.75, with a market capitalisation of about $C230m.

North Stallwell’s initial public offering opens on August 6.