Jupiter Mines Relists on ASX in Largest Mining IPO in Years

Jupiter Mines (ASX:JMS) debuted on the ASX on Wednesday (April 18) via one of the largest mining IPOs in years. 

The company’s AU$240-million IPO is the biggest in the resource space since BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT) spin off South32 (ASX:S32) launched on the exchange in 2015.

According to Australian Mining, Jupiter’s IPO was “heavily oversubscribed,” with 600 million shares listed at AU$0.40 each. The firm’s market cap now stands at AU$779 million. By comparison, South32 listed shares at AU$2.13 each for an initial market cap of AU$11.3 billion.

Jupiter owns a 49.9-percent stake in the South Africa-based Tshipi mine, which is the world’s largest manganese mine. It also holds the Central Yilgarn iron ore projects in Western Australia.

“I am very pleased with the strong interest shown in the Jupiter IPO. This can be attributed to the strong cash generation of Tshipi resulting in healthy distributions by Jupiter to its shareholders,” said CEO Priyank Thapliayl.

He added, “Tshipi’s Tier-1 positioning on account of its long life, production capacity and low costs further adds to the investment appeal,” also noting that he believes it is “challenging for any investor to secure such clean exposure to the steel industry, and manganese in particular.”

Jupiter was previously listed on the ASX, but delisted in early 2014. Shareholders said at the time that they did not believe the company’s true worth was reflected in its share price, and complained that liquidity was low; they approved the delisting in November 2013.

The decision to relist reportedly came after strong interest from institutional investors, says the West Australian. Their interest was spurred in part by the company’s robust balance sheet, which includes a cash balance of AU$71 million and no debt.

Institutional investors accounted for AU$225 million of the IPO, while the general public accounted for AU$15 million. The company is targeting a 70-percent dividend payout ratio.

Tshipi is located next to South32’s Mamatwan operation in the Kalahari manganese field, and has a mine life of 60 years. Jupiter says the asset is currently performing “exceptionally well,” with production and sales for the 2019 fiscal year continuing at a run rate of 3.3 million tonnes per year.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.