Mining entrepreneur Joseph Gutnick has pulled his $20 million Paradise Phosphate float to concentrate on “advanced” negotiations with an unnamed Japanese strategic partner, The Weekend Australian’s Richard Gluyas reports.
The irrepressible Gutnick yesterday conceded that the decision would animate his critics.
“But it will be a lot easier to raise $100m with a strategic partner, instead of getting diluted with just a $20m raising,” he said.
The Paradise float, unveiled in July and twice extended, would have marked Gutnick’s serious return to the local mining lists.
However, a weak market for initial public offerings due to widespread risk-aversion has torpedoed the plan, which centres on phosphate rock deposits near Mount Isa in Queensland.
Gutnick said his brokers had advised him conditions in the IPO market were “pathetic”.
In a statement yesterday, the Paradise executive chairman said the company had been in discussions with international fertiliser production and fertiliser trading companies for potential off-take and investment.
“Paradise is now in advanced negotiations with a potential strategic partner, and the company believes that the completion of a transaction with the strategic partner may provide greater shareholder value than that obtained via completion of the IPO at this present time,” he said.
A deal, he said, was likely to be struck before the end of the year.
Gutnick told The Weekend Australian that a larger float would help the company’s longer-term development plans, which include a beneficiation plant to separate the phosphate from sand and clay in the slurry.
The cost of such a plant would be several hundred million dollars.
The price of phosphate, a key ingredient in fertiliser, has remained relatively stable, despite the falling price of other commodities.
Source: THE AUSTRALIAN