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Australian mining IPOs in limbo

Although investor appetite for risk has improved substantially and several resource companies have successfully listed on the ASX in 2017, some are still struggling to get their IPOs across the line with others trading significantly below their listing price.

So far this year, 11 companies have completed their IPOs and are now trading on the ASX, with the number of new listings already surpassing the total for 2016.

However, many companies had to extend the closing dates for their respective offers, some more than once, and others have lost value since becoming publicly listed.

E2 Metals Ltd. is trying for a second time to list on the ASX after it pulled its first prospectus in November 2016 because of JORC reporting and compliance-related issues that delayed its planned debut.

The Melbourne-based gold explorer was aiming to list April 4 following the completion of an IPO to raise between A$6.0 million and A$8.0 million, but is still to hit the boards.

Western Australian explorers Huntsman Resources Ltd. and Raptor Resources Ltd. have also both missed their listing deadlines of Feb. 21 and Feb. 24, respectively, while China-backed steelmaker CTL Australia Group Ltd. was expecting to list by March 5.

Several attempts by S&P Global Market Intelligence to contact these four companies were unsuccessful. S&P understands that CTL Australia is still finalizing its prospectus.

Meanwhile, gold explorer Nelson Resources Ltd., also based in Western Australia, is due to list this week after its third extension to give it more time to raise the A$5.0 million it is seeking under its IPO.

Nelson also did not respond to a request for comment.

Of the companies that made it onto the ASX this year, Freehill Mining Ltd. is the worst performing, according to IPOwatch.com.au. The Melbourne-based iron ore hopeful finds itself at the bottom of the IPO Scorecard 2017, trading 45% below its IPO price of 20 cents.

Since the company listed on Jan. 16 it has hit a low of 9 cents and only reached a high of 17 cents.

Melbourne-based potash explorer Davenport Resources Ltd. is only slightly ahead of Freehill on the scorecard, having lost 35% of its value since listing on Jan. 20 and now trading at 13 cents.

The company was originally aiming to list in late October 2016, but was forced to delay its listing twice after the Australian Securities and Investments Commission requested additional historical accounting information and then raised concerns over an independent research report referred to by Davenport in an email to subscribers of Australian share-trading forum Hot Copper.

Brisbane-based Lithium Consolidated Mineral Exploration Ltd., meanwhile, had to cut its IPO to A$5.0 million, from between A$8.0 million and A$9.0 million initially, and its planned listing was delayed from December 2016 until March due to legal and regulatory issues with the acquisition of projects in Nevada.

Shares in the company have fallen 25% to 15 cents since it started trading on the ASX on March 28.

Western Australian explorers Kalamazoo Resources Ltd. and Blackstone Minerals Ltd. are also trading in the red, with shares down 15% and 5%, respectively, since listing.

Kalamazoo had to halve its IPO to A$5.0 million and defer its debut from late November 2016 until mid-January, while Blackstone's listing was delayed by about a month until Jan. 23.

On the flipside, Heron Resources Ltd.'s gold-nickel spinoff Ardea Resources Ltd. is leading the IPO Scorecard with a 200% return since it listed Feb. 9.

The company's shares traded as high as 93 cents and are currently sitting at 60 cents.