Grant Thornton forecasts more mining and metals IPOs and secondary listings in 2010 after busy 2009

Grant Thornton UK projects the mining sector to raise record amounts of capital in global stock markets this year after its latest study found that AIM-listed mining companies bagged £958 million through secondary issues in 2009 as £240 million was raised in December alone, The total eclipsed the amounts of capital raised in any other year, with the exception of the pre-crisis 2007.

The total amount of capital raises by mining companies in London for the year stood at £12 billion, while the number of admissions to AIM was at 36 with £740 million raised, of which just two were mining companies, raising £1 million. In Australia, IPO activity among mining and metal companies was greater, with 10 admissions to the Australian stock exchange raising US$18 billion, which is still lower than the C$22 billion raised through secondary issues on the Toronto Stock Exchange.

“Following unprecedented activity in recent months, we expect mining companies to raise record amounts of capital on global stock exchanges in 2010. We should also see a significant increase in the number of mining companies floating on stock markets... I am confident that the London Stock Exchange will increase its market share of IPOs, because it is attractive to international investors who value its unrivalled corporate governance standards and the transparency that this provides,” said Gerry Beaney, head of capital markets at Grant Thornton UK.

The firm added that the market’s preference for secondary fundraisings reflected a more risk-averse approach by investors who preferred to support their existing portfolios, while the fact that new equity by listed mining companies was in demand demonstrated their keen interest in the sector, which is likely to translate into an increase of IPOs in the coming months.

“Even for exploration companies, the long term underlying fundamentals are strong. Once confidence returns to markets, there will come a point where the risk-weighted returns from investment in exploration projects will exceed the cost of capital... after all, today's exploration company is tomorrow's producer,” added Beaney.  http://www.proactiveinvestors.co.uk/companies/news/12840/grant-thornton-forecasts-more-mining-and-metals-ipos-and-secondary-listings-in-2010-after-busy-2009-12840.html