2024:
Resources deals

The resources sector¹ continued to be a major contributor to activity in Australia’s equity capital markets in 2024. Just over half (54%) of IPOs by number in 2024 were undertaken by resources companies and approximately half (50%) of the secondary raisings over $10 million were by resources companies.

Gold shines in resources sector ECM deals

IPOs

Although the 2024 Australian IPO market remained comparatively quiet by historical standards, resources sector companies continued to seek capital from the Australian public markets - with 14 of the 26 IPOs in Australia (54%) being undertaken by resources sector companies, accounting for 39% of the total capital raised by IPOs for the year.

The vast majority (13 out of the 14) of these resources IPOs were by exploration companies and 60% of the 2024 resources IPOs were by early-stage exploration companies raising $10 million or less. The largest resources IPO was by Metals Acquisition Corp, the owner of the operating CSA Copper Mine in NSW, which was to provide a secondary listing on the ASX and raised $325 million.

With continued strong gold prices, 2024 saw seven IPOs from companies that included gold as a focus of their exploration efforts (often along with other minerals). The continuing investor interest in critical and strategic minerals was also reflected in the 2024 IPO market with six of the IPOs involving companies that include lithium or rare earths as a focus and four of the IPOs involving companies that include copper as a focus.

Secondary raisings

Turning to secondary raisings in Australia over $10 million in 2024, approximately half (45%) of the raisings by number were by companies in the resources sector and those secondary raisings contributed to approximately 32% of the total capital raised.

A number of secondary raisings by resources companies were to support the development of near-term, gold opportunities such as Spartan Resources Ltd, De Grey Mining Ltd and Meeka Metals Ltd.

Consistent with previous years, and a feature of the industry’s ongoing need for capital during the pre-revenue stage, the vast majority of secondary raises were to provide further liquidity and general working capital, including for the exploration and/or development of existing projects.

There were also a smaller number of secondary raisings to fund acquisitions including Boss Energy’s acquisition of a uranium project in the US.

Looking at the commodities involved in these secondary raisings, approximately 47% involved companies that include gold as a focus, 19% involved companies that include a copper focus and 13% involved companies that include a lithium focus. With the uranium price performing well relative to longer term prices during 2024, there were also a large number of raisings by uranium companies (10%).

The vast majority of resources sector secondary raisings included a placement component, providing the issuers with rapid access to funds, with 58% of secondary raisings being structured as a placement, 20% as a placement and accelerated non-renounceable entitlement offer and 18% as a placement and share purchase plan.

Reflections and what 2025 may bring

We observed last year that in 2024 we expected to see continued IPO activity for small cap exploration companies bringing new assets to the public markets across all commodities as well as further capital raisings targeted at a specific purpose by critical minerals focused companies in particular. These predictions largely eventuated in 2024 - IPOs undertaken by resources sector companies in 2024 were predominately by exploration companies and involved a range of commodities including gold, copper, lithium, rare earths, uranium, titanium and silver. In addition, critical minerals focused companies continued to undertake secondary raisings in 2024.

But it must be said, we were not really going out on a limb in our prediction for 2024. Over time, the Australian capital markets have shown that they are a reliable source of capital for resources companies. Despite volatility in commodity prices, investors are prepared to support exploration and then provide the equity required to fund development following exploration success. In 2025 we expect to see more of the same with continued IPO activity in the resources sector across a broad range of commodities, predominantly by exploration companies. We also expect to see secondary raisings by gold focused companies whilst the gold price remains strong as well as continued support for critical and strategic minerals companies as investors deepen their exposure to the ESG thematic in a resources context.