Aura seeds US investors with US$196.4m Nasdaq IPO
Aura Minerals capped a busy month by raising US$196.4m late Tuesday from a Nasdaq IPO, adding to existing listings in Canada and Brazil and funding an acquisition agreed to in June.
Bank of America and Goldman Sachs priced 8.1m shares at US$24.25, a 6% discount to the C$35.42/US$25.81 TSX closing reference price Tuesday. The banks allocated 70% of the deal with US investors, 15% in Brazil and the remaining 15% internationally, a banker involved in the offering told IFR.
The Canadian gold and copper miner’s Nasdaq-listed shares were trading midday Wednesday at US$24.19, slightly below offer. Aura management rang the opening bell at Nasdaq, which is conveniently near Bank of America’s global headquarters.
“The idea was to seed the US market,” said one banker involved in the offering. “There were some investors who complained the offering was too small,” said a second banker.
Trading illiquidity across multiple share listings has been an issue.
In addition to the Nasdaq and TSX listings, Aura has a B3 listing of Brazilian depositary shares.
In March, Aura executed a 3-for-1 split of the BDRs to increase liquidity and began to buy back the BDRs. Ultimately, it plans to de-list from the TSX to make Nasdaq its sole listing venue.
Complicating the liquidity exercise, Aura is majority-owned (53.3%) by Northwestern Enterprises, a privately held investment vehicle based in the British Virgin Islands. The company sold a 10% stake on the Nasdaq IPO.
Aura is using US$76m of money raised to acquire a gold mine in Brazil from AngloGold Ashanti that it agreed to last month.
Aura is in growth mode.
The miner is ramping up production at its Borborema mine in Northeast Brazil, with expected annual production of 83,000 ounce of gold when commercial operations begin by the end of Q3.
In addition to Borborema, it has two other mines in Brazil (89,000 ounces of gold production in the 12 months ended March 31), another mine in Honduras (76,840 ounces) and a fifth mine in Mexico (93,013 ounces).
Aura is benefiting from geopolitical uncertainties that have contributed to near record-high prices for gold and copper. In the trailing 12 months ended March 31, the miner generated US$192.4m of free cash flow, allowing it to return 11% to shareholders in the form of dividends and share repurchases.