Zeehan Zinc - a public listing and an international transaction
“Completing a listing of a public company on a recognised stock exchange is always a challenging but rewarding assignment. The opportunity, however, to work with an Australian mining client on an international transaction, to which we added significant value by readying the client for listing, was an added bonus. Learning the way the AIM market operates, both through our own endeavours and in working with UK based finance, accounting and legal professionals, significantly added to our international corporate and capital markets experience.”
Cornwall Stodart
Our Client
At the time we were retained, our client was a Tasmanian based
minerals exploration company engaged in the acquisition,
exploration and operation of mineral tenements, principally in and
about the township of Zeehan on the west coast of Tasmania. Many of
its employees lived in the township, while Head Office was located
in Hobart.
Minerals of interest were zinc, lead, silver and nickel. Mining
would be conducted by open cut and underground mining methods.
Like all early stage mining companies, it was critically
important that adequate capital was raised to fund
operations.
Their Ambition
Our client decided that the best capital market to raise funds
in, for mining ventures, was the Alternative Investment Market
(AIM) of the London Stock Exchange. The AIM market
at that time was attuned to the mining industry and to Australian
mining companies. Raising capital in that market presented less
challenges than the Australian market.
We had previously advised our client in a litigation matter and
- knowing of our experience in energy and resources and capital
markets transactions - they turned to us, as their Australian based
lawyers, to work with their accountants and UK lawyers in guiding
them through an AIM listing.
Enhancing their Success
The shares of the company were admitted to trading on AIM on 6
March 2007, following an oversubscribed placing that raised A$22.4
million.
The proceeds of the placing were used to fund various capital
works, including the construction and commissioning of a gravity
processing plant, the commissioning of a tailings storage facility,
the construction of mining infrastructure and the funding of bonds
and the like to Mineral Resources Tasmania.
Behind the Headlines
This turned out to be a very difficult but successful and
rewarding transaction. Due diligence revealed there were many
matters that needed to be attended to before the listing could
occur, including documenting past transactions, updating company
secretarial requirements and advising the Board on life as a listed
public company director.
The client's UK lawyers relied heavily on us for verification of
the contents of the placement prospectus and to ensure compliance
with the AIM listing rules.
As often happens with international transactions, coping with
different time zones - key people were located in the USA, Europe
and Australia - and many late nights added to the challenges
presented by this transaction.