BMC Minerals makes ASX debut in $66M IPO

[Ben Graham]

BMC Minerals (ASX: BMC), the Canadian subsidiary of UK-based BMC Ltd., made its trading debut on the Australian Securities Exchange (ASX) on Friday following an A$100 million ($66 million) initial public offering.

The company’s CHESS Depository Interests (CDIs) began trading at noon in Sydney at an initial price of A$2.00 each. By market close, they traded A$0.50 or 25% higher at A$2.50.

The IPO, which was oversubscribed, gives BMC Minerals a total market capitalization of approximately A$550 million ($365 million).

Major polymetallic project

BMC said it will use the funds of this offering to further advance its sole asset: the 100%-owned polymetallic Kudz Ze Kayah project located in Yukon, Canada.

“The ASX listing is an important milestone for BMC and enables the company to continue to develop and de-risk the KZK project to an operation of national significance for Canada and the Yukon community,” BMC’s chairman, Steven Michael, stated in a press release on Friday.

For years the project has repeatedly been paused due to legal challenges from Indigenous groups. The Yukon Environmental and Socio-economic Assessment Board (YESAB) previously found potential “adverse effects” on the caribou herd, water systems and traditional land use, but has set certain conditions for the project to still proceed.

The Kudz Ze Kayah project comprises 372km² of land package, hosing two deposits (ABM and Kona) that together hold over 20 million tonnes of indicated resources, containing 200,000 tonnes of copper, plus 890,000 oz. of gold, over 87 million oz. of silver, 1.15 million tonnes of zinc and about 450,000 tonnes of lead.

Since acquiring the project in 2015, BMC has advanced it through several key milestones, including an updated feasibility study in 2020. That report, focusing solely on the precious-base-metals-rich ABM deposit, outlined a potential nine-year mine with an after-tax net present value (at 7% discount) of $835 million, calculated using conservative commodity prices, especially for gold and silver.

The project will produce silver/gold, copper and zinc concentrates, with binding offtake agreements in place covering nearly all (95%) of output over the first five years. Initial construction capital is estimated at $492 million.

Canada’s next big silver mine

According to company estimates, ABM is expected to be Canada’s largest silver and zinc producer, as well as a top-15 Canadian copper producer, with annual output of 32.2 million oz. in silver-equivalent over its initial mine life.

Still, the property remains largely underexplored, and BMC said it has identified “several high-priority exploration targets” for drilling early next year. In addition to exploration, the company also plans to advance permitting and optimization studies for the project.

Following this work, the company anticipates licences and permits from Yukon and federal regulatory bodies, Michael said. The chairman also noted that BMC is aiming to move along with its growth strategy “at a time when silver, gold and copper prices are extremely strong.”