Home' Australian Resources and Investment : March 2015 Contents Volume 9 Number 1 • Australian Resources and Investment • 3
By TOny FEAThErsTOnE
Below is a brief update on seven
resource-related floats from 2014:
The Queensland-based group stood out
among resource-related IPOs last year.
It is pioneering cloud-based computing
applications for workforce management
in the global oil, gas and mining sectors,
and believes it can replace legacy
software and technology in its field.
Chief Executive Officer Leigh
Kelson said in January 2015 that
many resource companies still use
spreadsheets and emails to mobilise
teams, leaving them exposed to safety
and financial risks, and correctable
inefficiencies. He said that labour can
account for up to 30 per cent of mine
Enverro raised $4 million in December
2014 at $1 per share. It traded at 90
cents in late January in a difficult market
for micro-cap companies. Enverro
announced a software-licensing agreement
with a construction firm involved in the
$29-billion Chevron-operated Wheatstone
liquefied natural gas (LNG) project in
Western Australia, and launched a crew
and roster product in January.
Enverro looks well placed to grow as
resource companies search for further
productivity improvements, and as more
industries embrace cloud-based computing
applications in the next few years to cut
costs and streamline operations.
The Perth-based company finished 2014
as the best-performing exploration float,
albeit amid a dearth of mining offerings
and poor performance from most.
Its $7-million IPO was
oversubscribed, and its 20-cent issued
shares soared to peak at 46 cents
within months of its August 2014
listing on the ASX. But Duketon had
given up those gains and traded just
below its issue by late January, despite
more than doubling the nickel resource
at its main project.
Duketon’s flagship project is a
strategic tenement holding over a
greenstone belt within the Eastern
Yilgarn Mineral Province in Western
Australia, and its tenure abuts the
successful Regis Resources’ landholding.
Its fully owned Rosie Nickel and
C2 projects have 71,000 tonnes of
contained nickel metal, and potential for
further discoveries of high-grade metal,
and there is gold exposure through
tenements in the Eastern Goldfields
province in Western Australia.
Duketon announced strong
exploration results at its promising
Nariz discovery in Western Australia
in January. Managing Director Stuart
Fogarty said: ‘This latest intersection
and assay result shows that the
footprint of Nariz continues to grow.
It is increasingly clear that we are in
the middle of a major nickel-sulphide
system, and we look forward to ongoing
drilling results. The prospectivity within
the Bulge Ultramafic is significant’.
Stavely was another highlight in a
challenging market for resource floats
in 2014. The emerging copper/gold
explorer raised $6.1 million for its IPO
and listed in May, with its 20-cent
issued shares peaking at 70 cents,
before falling to 25 cents.
Stavely has promising exploration
copper projects (Stavely and Arafat) in
western Victoria, and its drilling results
post-listing are confirming geological
settings outlined in the prospectus.
The Arafat project has inferred
mineral resources of 1.2 million tonnes
at two per cent copper, for 30,000
tonnes of contained copper. The Stavely
project has inferred mineral resources
of 28 million tonnes at four per cent, for
110,000 tonnes of contained copper.
Stavely is buoyed by early exploration
results and believes that the medium-
term outlook for copper is positive. At
its AGM in November, it said that new
copper supply will marginally exceed
demand growth in the near term,
before a significant production deficit
emerges beyond 2016, as emerging
economies, notably China, transition to
Stavely said: ‘Should copper become
supply-constrained, and the lower prices
for coal, iron ore and gold result in a
lower Australian dollar, the Australian-
dollar copper price should see a material
appreciation’. If all goes to plan, Stavely
should have defined a much larger
copper resource by then, and should
benefit from potentially higher copper
prices in the medium term.
Few would have predicted the emerging
graphite producer to be the best-
performing float in 2014. After raising
$6.7 million in January 2011 through
an IPO, Valence soared from a 20-cent
issue price to as high as 87 cents, before
ending 2014 at 54 cents. It traded at 42
cents in late January.
As Australia’s only graphite producer,
the Valence IPO was well timed, given
higher interest in graphite stocks in
2014. It wholly owns the Uley Graphite
mining and processing facilities in
South Australia, and is finalising
regulatory approvals for full-scale
mining and processing.
Valence has successfully
recommissioned a 14,000-tonne-
per-year production plant in South
Australia, and phase two of its strategy
is investing up to $37 million over three
years to expand production. It also has
a 360,000-tonne graphite resource that
complies with the JORC Code and an
inferred graphite stockpile of 174,000
It’s an interesting strategy: develop the
graphite resource and expand production
for traditional graphite markets, before
focusing on higher value-add graphite
markets in later phases.
In January, Valence announced
the results of its feasibility study to
expand the site’s processing capacity,
in 25,000-tonne-per-annum increments
each year, rising to 64,000 tonnes.
Valence believes that the graphite
market faces a shortfall over the next
year, and that it is well placed over other
emergent graphite producers, given
existing production capabilities.
Other resource IPOs from 2014 had a
tough first year. Emperor Range Group, a
China-focused minerals explorer, raised
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