CASE STUDY: Golden Mile Resources

Assembling a strong team is crucial for successful IPO

Resources company Golden Mile Resources (ASX: G88) successfully listed on 19 June 2017, raising $4.5 million to fund its exploration activities.

The Company was formed in 2016 to acquire, explore and develop mining assets, and had secured a suite of exploration projects, predominantly within the fertile North-eastern Goldfields of Western Australia.

G88 was targeting projects that had the potential to evolve rapidly from exploration plays into potentially economic mineral deposits, primarily in gold, nickel and cobalt.

Tim Putt, Chief Executive Officer of G88, says the company’s long-term strategic plan had always included undertaking an IPO.

He explains that by its nature, exploration is a speculative business and, particularly with early stage projects such as G88’s portfolio, listing provides one of the few avenues to access sufficient capital to fund operations.

“Undertaking a public listing allowed us to access the capital to fund the exploration of our project areas in Western Australia,” Mr Putt said.

“Although other methods of funding these exploration programs are available, an IPO represented the most accessible path of financing, given the speculative nature of mineral exploration.”

To help ensure it was well-positioned to undertake an IPO, G88 focused on building a strong team of advisers that could help it manage the process as smoothly and as efficiently as possible.

“The team assembled to pursue the IPO worked very well together and assisted each other to expedite the process as quickly and efficiently as possible,” Mr Putt said.

“The HLB Mann Judd team, led by Jude Lau, was very structured and organised, and made sure we were fulfilling all our requirements.

“Working with people who know what needs to happen, and when, made the process that much easier.”

Another key element of success in the IPO process was the backing received from the lead broker and promoters in the initial capital raising. In addition, the support from the top 50 shareholders through the initial phases of the exploration process was vital.

“We also found it was important to manage the expectations of new investors, who were looking for strong initial success from the newly-listed company.

“An important task for us was to put together the asset base to support the IPO. This involved acquiring a group of prospective mineral exploration properties that would be attractive to the market and could be rapidly advanced, thereby producing positive news on a regular basis.”

The projects have delivered as hoped, with the gold, nickel and cobalt assets delivering outstanding results.

Since listing, G88 has seen its share price increase from an IPO of $0.20 to $0.70 (as at the 18th of January 2018). It has also been able to advance projects rapidly by being able to commit more
capital to its efforts.

This has resulted in increased work for its drilling contractors and assay laboratories, and an increased workload for the staff, which has meant the use of additional consultants and contractors to handle the additional work load as the company develops, and permanent positions are created.

Mr Putt said that companies considering an IPO should make sure they assemble an experienced team who can guide them through the process, which can be demanding.

“They should also be aware that it is likely to take longer than is often anticipated.

“In reality, the path to an IPO in the resources sector is a nine to twelve month process if it is to be done properly.

“In addition, it is important for companies to be able to produce positive news flow from day one to keep the investors’, and markets’, attention.

“Apart from all the regulatory compliance and technical work on the prospectus, it’s vital to hit the ground running, which means using some of your existing capital to begin your work program several weeks prior to listing and then to maintain that momentum. The investors like to see their company busy and being successful,” he said.

Information about Golden Mile Resources 

Golden Mile Resources Ltd (ASX: G88) is an Australian based exploration and development company, with an outstanding suite of gold and base metal projects in Western Australia. The Company’s initial focus will be the exploration of the Quicksilver Nickel-Cobalt Project in the SW Mineral Field and the Ironstone Well Gold Project at Leonora, in the NE Goldfields.

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