IPO spotlight: Cora Gold
Cora Gold is a new gold exploration company focused on two world-class gold regions in West Africa. In 2017 the company completed its IPO on London’s Alternative Investment Market, raising £3.45 mn ($5 mn) to develop a portfolio of gold projects in Mali and Senegal. We hear from Craig Banfield, chief financial officer of Cora Gold, who talks us through the company’s IPO journey.
Talk us through the timings: how long in advance did your start your IPO journey, and how long did it take to complete?
Cora Gold’s original strategy for going public was to look across the globe and find a suitable market where the company’s shares could be listed. We looked at the US, Canada, Australia and the UK. The feedback from North America at that time (2016) was that investment appetite would be low. A visit to Australia highlighted that, while investment appetite was sailing high, valuations were – unfortunately – aggressively low, so overall shareholder dilution would be significant. Consequently, our research determined that the UK market was the most suitable environment.
Next for Cora Gold was the question of whether to use a listed shell to reverse into (reverse takeover or RTO), or seek an IPO. In early 2017 a listed shell was identified, and Cora Gold began the RTO process. By mid-2017, however, the various parties agreed to cancel the proposed RTO and Cora Gold instead elected to seek its own IPO, which was successfully completed in early October 2017.
What were the main challenges you experienced during the process – were there any particular pinch points? How did you overcome these?
The decision to cancel the RTO was most certainly one of the key pinch points in the overall process. Fortunately, all of the various advisers to the RTO were able to be retained by Cora Gold for the IPO process. Had this not been the case, the process would certainly have been delayed by several weeks or months.
What would be your key words of advice for other companies considering the IPO process? Is there anything you would do differently with the benefit of hindsight?
One of the key issues for any junior company wishing to seek a public offering is to have individuals within the company who are wedded to the process. This is important both in terms of detailed knowledge of the company’s business operations and practices, and in terms of reacting quickly to requests from advisers. Ultimately, inaccurate information fed into the process in an untimely manner will very likely lead to a failed transaction.
What is life like as a public company? What are the main advantages you’ve experienced? Has there been any impact on the culture of the business?
The disciplines of running a company in a public forum add to its robustness – the compliance checks and balances are there for a reason, and they certainly add a layer of reassurance to a firm’s operating practices. Having a host of new stakeholders, including shareholders, with eyes and ears following the company’s progress is both enlightening and encouraging. Life in the public markets is challenging but, hopefully, ultimately rewarding for all concerned.