12 Jan 2011
LG advises on four AIM deals involving African natural resource companies
Mining group, Hummingbird Resources Plc, is floating on AIM with a $40m ($25m) IPO giving it a market capitalisation of approximately $140m. Lawrence Graham LLP ("LG") is advising joint brokers Liberum Capital and Mirabaud Securities. The mainly Liberian miner is planning to expand its operations in west Africa. The price of gold is currently hovering around its record high and with other commodity prices strengthening, the flow of new companies listing on AIM appears to be gathering pace.
Last week, LG advised nominated adviser Strand Hanson and joint brokers Mirabaud Securities and GMP Securities on Madagascar Oil Limited's admission to AIM which raised £50.5m. The placing of 53,197,000 common shares represents 27.65 per cent of the share capital of the company which equates to an approximate market capitalisation of £182.7m. Founded in 2004, the company is involved in the development of five contiguous blocks covering 29,500 sq km onshore Western Madagascar.
AIM listed Beacon Hill Resources plc also last week raised £23m (approximately $35.8m) through a placing of 184,000,000 new ordinary shares by Collins Stewart and Renaissance Capital who were advised by LG. The placing satisfied the terms of the acquisition of Minas Moatize coal mine in Mozambique by group subsidiary, BHR Mining Limited. Beacon Hill has gained full control of Minas Moatize coal mine which produces around 8,000 tons per month in one of the world's largest undeveloped coking coal regions globally.
Tom Nicholls, head of LG's Energy and Natural Resources team who advised on all three deals said: "It is clear that there remains strong appetite for resources companies at present both for new companies coming to market and for secondary issues. Whilst the flow of IPO's may abate over the Christmas break we anticipate the start of 2011 to continue strongly with further IPOs in the pipeline "
The LG team comprised Tom Nicholls together with corporate associates Mark O'Donnell, Rebecca Gordon and Neil Calder. Hummingbird Resources was advised by Cobbetts LLP, Madagascar Oil by Watson Farley Williams and Beacon Hill by Memery Crystal.
In addition, an LG team led by Geoff Gouriet also advised Firestone Diamonds Plc last week on its conditional secondary fundraising of £13m to provide additional working capital for its project in Lesotho. These deals follow LG's role acting for Cove Energy plc on its £110m fundraising earlier in November. The net proceeds of that will be used together with existing cash balances to fund Cove's share of costs relating to existing assets in Mozambique, Tanzania and Kenya and potential new opportunities. LG also advised Cenkos Securities last month on its £19m placing on behalf of Caza Oil & Gas Inc.
LG was named top legal adviser to AIM clients in the Hemscott rankings for the third quarter of 2010. It is the sixth consecutive quarter that it has held this position. It is also top legal adviser by number of clients and market capitalisation to both FTSE AIM 50 and FTSE AIM 100 clients.