Listing on the ASX: Access to an AU$2.9 Trillion Pension Capital Pool

Max Cunningham, executive general manager of the ASX, spoke with INN about how tech companies can access new capital by listing on the ASX.

Last Friday (November 15), BDO hosted a panel with the Australian Stock Exchange (ASX) to discuss the opportunities of tapping into a AU$2.9 trillion capital pool.

Forecast to reach over AU$10 trillion by 2030, the Australian pension market, also known as the country’s superannuation market, has a unique role within Australia.

Every salaried individual in Australia has 9.5 percent of their salary automatically allocated to a self-directed pension fund. This pension scheme has further led to the establishment of the fourth largest pension market in the world. This, in turn, generates opportunities for companies that are looking to access and raise capital by issuing shares on the ASX.

Max Cunningham, executive general manager of the ASX, spoke with the Investing News Network (INN) about how the ASX provides an average annual return of 10 percent, offering small- and mid-cap companies new opportunities to raise capital, particularly in the resources and tech industries.

This transcript has been edited for clarity and brevity. Read on for more of what Cunningham had to say.

INN: Can you tell me about some of the superannuation trends that you’re seeing? Are they typically passive and index focused?

MC: Increasingly so. I think the shift of passive that you’ve seen globally is a big theme in Australia, and that is what is really opening opportunity for mid-cap companies. What’s happening is you capture somewhere between 80 and 90 percent of the market cap in the top 50 to top 100 stocks. People are benchmarking that through exchange-traded funds and passive investing.

Then, in terms of generating a little bit of alpha in their portfolios, they’re investing in small-cap stocks either directly or in the small-cap index, which is the ASX 300.

INN: Are there any subsector trends within tech or resources that you’re seeing, or is it the entire ASX 300?

MC: I think, without any doubt, the sector that’s been attracting the most interest, the most money and the highest valuations is the tech sector. Up until about five years ago, it was very much oriented around domestic, online-type of businesses, which are really a result of the dot-com hangover.

Really what we’ve seen in the last five years is a massive amount of interest and money — and I might add success — in fintech, software-as-a-service and artificial intelligence, particularly in the translation space. This also includes a range of other software opportunities as well.

INN: So would you say that private equity and venture capital (VC) funds are investing heavily in tech within these three areas?

MC: I’d say VC has not been a force in Australia up until maybe the last 18 months. The VC market has really only just been growing in a material sense in the last two years.

If you think about that in practical terms, that means you don’t see exit opportunities from those VC sectors probably for another five to 10 years. I think the ASX has been a form of VC funding for some technology companies. You’ve also seen some tech companies have really been self funded as well.

INN: Would you say that these superannuation funds help support the overall Australian economy? Australia has had 27 years of growth; would you say that these two are related?

MC: I think it’s hard to say they’re not a major impact. I think if you look at superannuation and the asset classes they prefer, which are equities and property, they’ve had a material impact. This has had an impact in property investment, particularly in the industrial and retail sectors.

We’ve had a mining downturn globally. Over the last 20 years, mining overall has been a positive contributor to the economy for 15 of the last 20 years. I think mining, superannuation and foreign investment are the three biggest drivers.

INN: In the panel they discussed that mid-tier gold, coal and iron ore stocks have the most activity right now in the Australian market. Do you recommend that Canadian resource companies looking to list on the ASX focus on these sectors?

MC: I would say that if you are in any mining sector, it’s worth testing the ASX. Gold is very strong because there’s a shortage of gold coinciding with a recent gold rise. Coal and iron ore are well-understood assets in Australia, but there’s quite a bit of competition for capital.

I would actually say that there’s very, very strong interest in other asset classes that have been well understood but have been underrepresented. I say uranium is a key one where there’s strong crossover. I’d say nickel would be another one where there’s a good level of interest.

And of course copper, which is often a by-product of gold and is well understood. I would go broader than that. I think really what we were saying in the presentation is that they’re the three that are the biggest and they’re the three that have attracted the most capital in the last couple of years.

INN: The panelists suggested that in Australia, the micro-cap sector is bloated relative to the mid-tier space. Would you recommend listing within the mid-tier space as a result of this?

MC: It depends on what your definition of mid tier and micro is. We think that if you’re doing a raise of capital of north of AU$30 million, then you’ll get good engagement from micro cap. And from AU$50 million, you probably get engagement from mid-cap fund managers, and that’s worth testing.

INN: When it comes to the tech industry specifically, what is your outlook on the sector? What might investors not know about the tech climate in Australia?

CW: I think the reason we’ve had huge success in attracting foreign tech companies is really about growth. The ASX 200, our benchmark index, is paying about a 5 percent dividend yield and 5 percent revenue growth, so that’s 10 percent growth in the market. In a very low interest rate environment, that’s not bad.

I think the reality is that the tech companies that have been listing on the ASX are growing 20 or 30 percent year-on-year. If you’ve got that level of growth, you get some good engagement from fund managers in Australia. Many of the foreign tech companies that we’ve had listed are growing at 40 to 50 percent, and that’s very attractive.

The second thing is that we find that a lot of the companies that we’ve been attracting, particularly from the United States and from Europe, are companies that probably consider themselves too small to go public on the NASDAQ, New York Stock Exchange or the London Stock Exchange. There’s an opportunity to tap into Australia and use Australia as an alternative to a round C, and for many founders it’s an alternative to a trade sale.

The third thing is that tech is a lot cleaner than mining. It is offering an alternative for investors that are often seeing mandates on environment, social and governance grounds increasingly focused on in alternative asset classes.

Don’t forget to follow us @INN_Australia for real-time news updates!

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

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Winsome Resources CEO Chris Evans

Winsome Resources CEO Chris Evans said, “Canada and the US are working feverishly to develop an internal battery materials supply chain and we think we're going to play a critical role in that.”

Winsome Resources CEO Chris Evans: Sustainable Hardrock Lithium Opportunities in Quebec youtu.be


Winsome Resources (ASX:WR1) CEO Chris Evans joined the Investing News Network to discuss the company and its Cancet lithium project in Quebec, Canada.

"We listed on the ASX on November 30, 2021," he explained. "We're lithium focused but based in Canada, and we've been pretty successful in the last six months — our share price has done well. I think I've been putting this down to the success factors which we possess as a company, including the fact that we're into lithium at a moment with high demand. Any mining company that's associated with lithium has tended to do well.

“Our assets are in Quebec, a fantastic mining jurisdiction for all sorts of reasons. Also, being listed on the ASX — Australian investors tend to like early stage plays a bit better. They've certainly woken up to the electric vehicle and lithium revolution that's occurring in the world. And it's a pleasure having the assets in Canada.”


Next, Evans got into specifics about the company's flagship project. “The Cancet project is our flagship, in the James Bay region of Quebec. All our projects are hard-rock lithium; that's digging the rocks out of the ground and concentrating the lithium in them. Then it gets converted into the final product, which is lithium carbonate or hydroxide, that then goes into electric vehicle batteries,” he explained.

“Cancet’s had about 5,500 metres of drilling done on it historically, so we know that there's a great deposit of lithium at fantastic grades. It outcrops on the surface, the lithium-containing spodumene from the pegmatite rock, where we have 3.7 percent lithium oxide over a 17 metre interval from the surface at our most successful drill hole. We just completed 2,000 metres of drilling ourselves, increasing our knowledge of the orebody that's there, and also looking for extensions to the orebody. We've got 395 claims, and our drilling and exploration is only over about 15 of the claims. So we've got a lot further to look here and a lot more to develop.”

As for supply location, and the company's relationship with the international market, Evans said, “We think it's fantastic for us, and our shareholders, that we have assets in Quebec. Roughly 50 percent of the world's hard-rock lithium comes from Australia, where it’s mined and concentrated. The problem is that final conversion into lithium carbonate or hydroxide all occurs at the moment in China ... lithium is on the critical minerals list in Canada, the US and Australia, and Canada and the US are working feverishly to develop an internal battery materials supply chain. We think we're going to play a critical role in that.”

Elaborating on the sustainability industry that drives the battery revolution, he said, “(Nearly) all power in Quebec is generated by hydroelectricity and renewable forms of electricity. That’s very important, because the mining and concentration process for lithium products traditionally produces a large carbon footprint, because it's energy intensive. The EU, from 2024, has mandated that all batteries are labeled with the carbon footprint of all the materials that are contained within them. Then, by about 2026, there's specific targets that batteries have to meet in order to be sold in the EU. If you don't have a renewable source of energy to produce your lithium products that go into those batteries, it's going to severely restrict your markets — and that's another bonus for us being in Quebec.”

Evans said that Winsome Resources’ approach is to develop a mine itself, rather than selling or partnering. “We will approach this as if we are going to be developing the Cancet project, and producing lithium ourselves, in four or so years. And I think that'll best serve our shareholders.” With regards to other ways the company could benefit investors, Evans said, “Being listed on the ASX, and having access to a lot of capital, I think there's a great opportunity for us to acquire other projects in Canada. We're about to start our summer exploration. And we're on the lookout for a new project. So I think the good news is really to come.”

Watch the full interview of Winsome Resources CEO Chris Evans above.

Disclaimer: This interview is sponsored by Winsome Resources (ASX:WR1). This interview provides information that was sourced by the Investing News Network (INN) and approved by Winsome Resources in order to help investors learn more about the company. Winsome Resources is a client of INN. The company’s campaign fees pay for INN to create and update this interview.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Winsome Resources and seek advice from a qualified investment advisor.

This interview may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, receipt of property titles, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The issuer relies upon litigation protection for forward-looking statements. Investing in companies comes with uncertainties as market values can fluctuate.

WR1:AU

Where are the silver mines in Australia? You might be surprised to learn that the country is home to one of the world’s top primary silver producers.

Mining is a big part of Australia’s history, and it continues to shape the country’s economy and position in the world today. The nation is one of the world’s top producers and exporters of resources, with coal, uranium, copper and gold being some of its best-known commodities.

Australia is also a key producer of silver — it was the world’s fifth-largest producer of the metal in 2021, tied with Russia, putting out 1,300 MT. Interestingly, most of Australia's silver is produced from silver-bearing galena, but some is also produced from copper and gold mining.

Refined silver comes mainly from the Port Pirie lead smelter and refinery in South Australia, though silver is also refined at gold refineries in Perth, Kalgoorlie and Melbourne.


But where are the silver mines in Australia, exactly? While it’s interesting to know what types of deposits the precious metal is found in, many investors want to know what companies are producing silver and where their mines are located geographically. Read on to find the answers to those questions.

Where are the silver mines in Australia?

Silver has played a role in Australia since the mid-1800s — Wheal Gawler, Australia’s first metal mine, was a silver-lead mine developed in South Australia in the 1840s. And that’s not Australia’s only early silver-mining operation — the Broken Hill deposit in New South Wales and the Mount Isa deposit in Queensland are two other early Australian silver discoveries.

Broken Hill, a lead-zinc-silver deposit, was discovered in 1883 by German immigrant Charles Rasp, and the Broken Hill Proprietary Company was born in 1885; it ultimately merged in 2001 with another mining giant, Billiton, to form BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT). BHP Billiton is no longer involved with Broken Hill, but ore is still being extracted there today. Perilya now runs the southern and northern operations.

For its part, Mount Isa was discovered in 1923 by John Campbell Miles, and like Broken Hill is still producing today. It was acquired by Glencore (LSE:GLEN) in 2013 and in addition to silver is also a producer of zinc.

These major early Australian silver discoveries are not the country’s only sources of silver. Other silver mines in Australia include Cannington, one of the world’s top primary silver producers. It’s a fly-in, fly-out mining and processing operation that is owned by South32 (ASX:S32,LSE:S32), a diversified resource company spun out from BHP Billiton in 2015. Cannington also produces lead and zinc.

Australia holds the McArthur River mine as well, which opened in 1995 and is owned by Glencore subsidiary McArthur River Mining. The mine is one of the world’s largest zinc-lead-silver mines, and is located in Australia’s Northern Territory.

Glencore’s 2021 annual report claims total silver production reached 31.519 million ounces for the year, representing a 4 percent drop from 2020. That includes 625,000 ounces from McArthur River.

The Century mine, which previously belonged to MMG (HKEX:1208), shut its doors at the end of 2015, but was a major producer of zinc (and silver) until that time. It was reopened in mid-2018 by New Century Resources (ASX:NCZ) and the company says it now has an estimated annual production capacity of 264,000 tonnes of zinc and 3 million ounces of silver.

Independence Group (ASX:IGO) also produces silver, along with copper and zinc, at its Jaguar operation in Western Australia. Gold producer Silver Lake Resources (ASX:SLR) owns some projects with silver reserves as well. As you can see, there are and have been many silver mines in Australia.

Future silver mines in Australia?

In addition to being home to a slew of large silver mines, Australia also plays host to many companies that are exploring and developing silver projects. Below are a few that have made recent progress.

Please let us know in the comments if we’ve forgotten to mention any Australia-focused silver companies. All companies listed had market caps of at least AU$5 million on May 19, 2022.

Argent Minerals (ASX:ARD) — Argent Minerals’ main asset is its 100-percent-owned Kempfield polymetallic project in New South Wales. In May 2018, the company announced an updated resource estimate for the asset — its silver equivalent contained metal now stands at an estimated 100 million silver equivalent ounces at 120 g/t silver equivalent; that’s approximately double the previous estimate.

In total the company has three projects, with all of them being in New South Wales.

Investigator Resources (ASX:IVR) — Investigator Resources is advancing silver, copper and gold deposits in South Australia. Currently its properties include the Peterlumbo/Paris silver project, the Eyre Peninsula and Stuart Shelf projects and the Northern Yorke Peninsula projects.

The total resource for Paris stands at an estimated 18.8 million tonnes at 88 g/t silver and 0.52 percent lead for 53.1 million ounces of contained silver and 97,600 tonnes of contained lead (at a cut off of 30 g/t silver). The indicated component is 12.7 million tonnes of silver (95 g/t) and represents 73 percent of the total estimated resource ounces.

Horizon Minerals (ASX:HRZ) — Horizon Minerals owns the Nimbus silver-zinc project in Western Australia. Nimbus has a high-grade silver-zinc resource estimate of 255,898 tonnes at 773 g/t silver and 13 percent zinc; the total Nimbus resource stands at 1.21 million tonnes at 52 g/t silver, 0.9 percent zinc and 0.2 g/t gold.

Silver Mines (ASX:SVL) bills itself as a leading Australian silver exploration company, and has spent a considerable amount of time acquiring Australian silver projects. Those include Malachite Resources’ (ASX:MAR) Conrad project and Kingsgate Consolidated’s (ASX:KCN) Bowdens silver project.

While the company’s main focus has been on the Webbs silver project in New South Wales, the Bowdens project represents the largest undeveloped silver project in Australia, and Silver Mines is working to get the project through the feasibility, environmental impact statement and permitting stages.

In a 2018 report, the feasibility study demonstrated an average silver production of 3.4 million tonnes per annum for the project, with 5.4 million during the first three years of operation. Estimations also included 6,900 tonnes of zinc and 5,100 tonnes of lead.

This is an updated version of an article first published by the Investing News Network in 2018.

Don’t forget to follow us @INN_Australia for real-time updates!

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

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