The ASIC have recently released Report 641 - An inside look at mining and exploration initial public offers.
The report takes a look at mining industry IPO’s between 2014 to 2018, and completed regulatory review of these transactions.
Some of the key financial findings were:
- Mining IPO’s as a percentage of the total have risen 33.85%, from 2.76% in 2015 to 36.61% in 2018;
- 56.5% of investors were less than $5,000;
- more than 50% of investors had exited within 200 days post IPO;
- 90% of all mining IPO’s were raising less than $10M; and
- Lead Manager Benefits ranged on average from 5.98% (Quartile 1) to 27.97% (Quartile 4)
ASIC has made a series of recommendations around fees, disclosure, conflicts of interest and proper due diligence. Making clear their view is for presentations and term sheets to be subject to the same standards as a prospectus, and that the total aggregate remuneration for the lead manager should be disclosed in the prospectus.
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