Contango Holdings PLC (LON:CGO) started its life as a listed company on Wednesday morning.
As part of its initial public offering (IPO), Contango raised £1mln which it will use to “fund a single acquisition in the natural resources sector”.
It is the seventh new listing in the sector this year. Although it’s not as easy as it once was for junior miners to raise money, the market has picked up following the commodity downturn.
The company’s chairman is Brian McMaster, the executive chairman of AIM-listed potash mine developer Harvest Minerals Ltd. (LON:HMI).
“Our experienced board, which combines proven natural resources operators with specialist natural resources financiers, is highly capable of navigating the junior natural resources sector to identify, assess and execute value accretive transactions,” said McMaster.
Focus to buy assets
“To this end, we are focused on acquiring a company, business, project or assets in the natural resources sector.
“We don't envisage this being a prolonged quest; the timing to invest in the sector is now and we have access to further capital for the right opportunity.”
He added: “With this in mind, we hope to advance the strategy and move quickly to assess an array of opportunities and look forward to updating the market on our progress."
Exploration budgets dried up after the commodities crash a couple of years ago as miners were forced to scale back their operations.
That means there are plenty of assets knocking about for Contango to get its teeth into, while analysts expect the sector to continue to rebound as the current lack of exploration will eventually lead to shortages and higher prices.
Shares were flat at 4p early on Wednesday afternoon.