BRISBANE’S ASX NEWCOMER GOING FOR GOLD
Written on the 11 May 2011
POLYMETALS Mining Limited (ASX: PLY) is Brisbane's latest publicly-listed company with shares reaching $1.12 on opening day yesterday after launching at $1.
The Samford-based company has 36 million shares on issue, following a successful IPO last month which saw 7 million shares offered at $1.
It has operated for around 25 years and has three major gold and bare metals exploration projects across Canbelego in New South Wales; Drew Hill (SA); and Boorara in WA.
CEO Fulton Smith says Polymetals’ move into the public arena was logical to accelerate growth.
“We’re not your typical explorer in that we have healthy cash flow from our JV White Dam mine which has provided significant capital for the other business operations,” says Smith.
“The reason we’ve gone to a market listing is because we’re in a unique position to invest the entire $7 million into our exploration projects. We have no corporate overheads and all the capital will go into the ground, including $5.6 million into our Mt Boppy gold mine near Canbelego alone.
“Over the last 25 years we’ve raised $1.6 million in capital from private investors and have paid back more than $25 million through dividends and shareholder buy-backs. But as a private company you don’t have the quick access to capital that we now do.”
Polymetals’ White Dam Gold Mine at Boorara is exceeding expectations with gold production of more than 10,000 oz per month. The mine is a joint-venture with fellow ASX-listed gold miner Exco Resources (ASX: EXS).
The Mt Boppy mine has produced 500,000 ounces of gold in its history and, now having access to more than 200 square kilometres of tenements, Smith says the project is key focus for the company.
The listing of PLY was managed by RBS Morgans Ltd with Hynes Lawyers partner Glenn Vassallo advising.
“They’re very disciplined in the way they do things and have a strong track record of coming in as mine operators for underperforming projects and turning them around very efficiently,” says the resources law specialist.
“In addition to the point-of-difference in their operational capacities, Polymetals also has a very strong portfolio of gold and silver assets. This was a very strong listing and sets a great platform for Polymetals moving forward.”
Vassallo highlights the continued weakness of the US currency and ambiguity over its capability to manage an escalating debt portfolio as presenting favourable conditions for Australian gold exporters.
Just under one million shares were traded yesterday, priced at $1.08 when the market closed.