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23/2/2018 — General
Australia set for a run on IPOs
By Ross Louthean

At a time when New Zealand mineral developments are being hamstrung by heavy green politics, particularly targeting coal, Australia’s mineral scene is well clear of the bust that followed its recent boom.

No better example of this was given by the 1,200 delegates attending the RIU Explorers Conference which ended in the Western Australian port city of Fremantle yesterday.

Organiser Stewart McDonald of Vertical Events, told NZResources that this was perhaps this conference’s best ever annual attendance, with booths stretching out to near the hotel entrance. This conference is considered the second largest in Australia after Diggers & Dealers Forum in Kalgoorlie.

Keynote speaker senior resource analyst for Patersons stockbroking, Simon Tonkin, told delegates there could be between 30 to 60 mining IPOs on the ASX this year and that mergers and acquisitions would continue “perhaps more in the larger space.”

The number of new floats would be a long way from 2007, at the height of the mining boom when there were 117 companies developed, some of which no longer exist.

Tonkin said 2018 had begun with good momentum and he believes there should be good support for the next couple of years.

Prime factors helping the market were:

• The US recovery continuing to happen.

• The $A currency was expected to weaken which should be good for mineral and metal producers.

• Stocks were continuing to be driven by battery developments and electric vehicle metals.

Patersons continued to like lithium, cobalt, copper, nickel and zinc.

Tonkin said these were exciting times in Australia to be involved in resources, and pointers for this included China’s economy was continuing to grow and Australia with it.

Battery technology and EVs were providing impetus through what he termed the green economy, and in recent years there had been a lack of new discoveries in the country.

Funding was now available for exploration.

In the new battery world there were no alternatives for lithium-ion batteries including the zinc-air batteries and developments with vanadium redox.

The University of Sydney had undertaken work on the zinc-air battery and at this stage it was not as efficient, but it was cheaper.

He said while cobalt had growing demand for batteries there were limits to its supply.

Patersons was neutral on gold in the short term with the potential for the price to range between $US1,200 an ounce to $US1,380/oz. The broking house was bearish on the $A=$US exchange rate. Physical demand for gold was below the 2017 average, having fallen about 7%.

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Simon Tonkin presenting at the Explorers Conference.