LONDON (Reuters) - Contango Holdings Plc (CGO.L) listed on London’s stock market on Wednesday, with a plan to buy resources assets.
The company is the seventh new London listing in the sector this year. Although the market has begun to improve following the commodity downturn, it is still more difficult for juniors to attract investment than diversified miners.
Brian McMaster, chairman of Contango, said he would consider any good project in the resource sector, but most likely “some kind of hard rock” as opposed to oil or gas.
Exploration budgets dried up after the commodity price crash of 2015-16 forced miners to focus on cutting costs and debt, but analysts say the mood is improving and the lack of exploration will eventually lead to shortages and boost prices.
Major miners have been missing or only just hitting output targets, but, unlike the junior exploration project companies with no income, they can benefit from higher profit margins as commodity prices rise.
Contango said in a statement that a 1 million pound start-up investment as part of the listing process has come from the board and other initial subscribers and it will admit a total of 42,949,987 ordinary shares, implying a market capitalisation of 1.23 million pounds for the company.
(The story was refiled to delete extraneous word ‘was’ in the third paragraph, add missing name in contact details)
Reporting by Barbara Lewis, editing by Louise Heavens