Jupiter, Riversdale IPOs gather pace as funds favour miners again



As the initial public offerings of Jupiter Mines and Riversdale Resources gather steam, there is plenty of evidence the mining sector is back in favour with fund managers.

Jupiter Mines has won over the investment community as commodity prices have soared. Fund managers say the offer is attractively priced, with low production costs for its manganese asset.

Jupiter owns a 49.9 percent interest in the single largest manganese mine, the Tshipi Mine in South Africa, and is being sold on a multiple of between two and three times its annual earnings before interest, tax, depreciation and amortisation.

In comparison, South32 trades on 5.5 times and has a dividend yield of 4-5 percent, whereas Jupiter Mines has twice the yield on half the multiple.

Hartleys is the lead manager for the Jupiter Mines IPO, while Foster Stockbroking and Aitken Murray Capital Partners are co-lead managers.

Shares are priced at 40c each by the company that was once listed on the Australian Securities Exchange.

The IPO is worth at least $200m and the market value is expected to be about $780m. The prospectus would be lodged with the Australian Securities & Investments Commission on March 19, and the shares are set to start trading on April 18.

Meanwhile, fund managers are meeting with Riversdale Resources next week.

Unlike Jupiter, Riversdale is not yet a producing asset but many still believe the IPO timing is good.

Deutsche Bank and Goldman Sachs are managing the IPO offer, which includes a $90m raising and a secondary selldown

of between $34.2m and $42.7m.

The range for the shares being sold in the offer are between $1.60 and $2 each, with the market value of the business estimated at between $450.7m and $532.4m.

A management roadshow for the IPO began yesterday and will conclude on March 27 before a March 28 bookbuild and trading of the stock on the ASX begins on April 23.

Proceeds of the offer will be used to undertake the early development work at its Grassy Mountain Project coal project, which comes at a time when the commodity price is in full recovery mode.


Bridget Carter is Mergers and Acquisitions Editor at The Australian, and has also covered property and construction for the newspaper for more than four years. Additionally she’s written about logistics, crime, and social issues. Bridget does a weekly cross to the Sky Business Channel.

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