Lord Resources Limited (ASX: LRD) successfully listed on the Australian Securities Exchange on 7 April 2022, raising $4.5 million. It is a mining exploration company with several prospective projects in Western Australia, including the Horse Rocks lithium project near Mt Marion.
Its portfolio of “future-facing” metals, located within WA’s greenstone belt, consists of five largely unexplored projects that offer exposure to lithium, nickel, PGE (platinum-group elements) and gold sectors.
LRD had originally been listed as Eneabba Gas before being delisted in late 2020 because it didn’t have an active project. But managing director Barnaby Egerton-Warburton said the decision to rename and relist the company was a relatively straight-forward one.
“We had secured the rights to a number of exciting exploration projects and the time was ideal to go to the public market in order to raise the capital required to fund these. The growing demand for lithium provided strong impetus for an IPO, and pleasingly the listing was well-supported and generated strong interest from investors.
“Since listing, we have secured the required permits for the Horse Rocks lithium exploration project, and have now finished the initial geochemistry and surface sampling work. This has identified some very promising lithium anomalies and we anticipate starting a full drilling project next year.
“Without taking the step to become a publicly listed company, we would not have been able to secure the capital required to achieve this. Expanding our investor base has been integral to our recent successes,” he said.
Mr Egerton-Warburton said that Lord Resources also benefited from a degree of good timing.
“Throughout 2022 there has been increasing demand for lithium, triggered by the growth in electric vehicle production around the world. This demand is set to continue.
“There has been a correspondingly massive jump in the number of listed lithium companies in recent years – we know this sector very well and as a result we were able to capitalise on this growing appetite.”
He added that despite these advantages, undertaking an IPO was still a demanding and, at times, exhausting process.
“There is no doubt that going through an IPO can be challenging. It is a very costly and time-consuming process, with a lot of administrative hurdles, and the documentation and reporting required means that managing the IPO process is often a full-time job.
“In our case, most of the challenges we faced were external ones. We had a team that was very experienced in public listings, and we had spent a good two years preparing, so we were in a strong position. But that doesn’t prevent events outside your control from cropping up.”
He says the key to success was the right team, a tight capital structure with no debt, and an aligned group of shareholders.
“If you have these structures set up properly from the beginning, then the process can run smoothly. Even those things that come out of left field – and the unexpected will happen – can be managed efficiently if the process is robust.
“I’d even go further and say that I wouldn’t consider doing an IPO without having Lucio Di Giallonardo and his team at HLB Mann Judd in Perth involved. They have the experience and knowledge to add real value to the process. The same applies to the legal and tax advisers we used for listing Lord Resources.
“It’s easy to waste a lot of money on advisers who don’t really know what they’re doing – having the right experience, and a team you can trust, is worth its weight in gold,” Mr Egerton-Warburton said.
This case study was first published in the 2023 IPO Watch Australia Report.