New figures announced today at the Paydirt 2009 Resources Victoria Conference have highlighted the struggle in the past two years for Australian explorers to raise working capital for both ‘brownfield’ and ‘greenfield’ exploration and mining projects. Figures from financial services firm Patersons Securities showed that there were 252 Initial Public Offers (IPOs) in 2007, dropping to 68 last year, and as Director of Corporate Finance Neil Doyle confirms, “just eight so far this year.” He said that  “the impact is no more evident than in the mining sector, which crashed from 140 IPOs in 2007 to 40 last year to just three this year.

“Two years ago, the then IPOs raised A$7,650 million, dropping to about a third of that last year and just A$400 million this year of which one float accounted for A$300 million of that figure.”

He said the sentiment towards gold – a key contributor to Victoria’s resources profile – had taken a bit of a battering as negative investor outlook would be long lasting towards the recent gold failures in the State.

“This negative sentiment is exacerbated by decisions such as Lihir Gold to take an impairment charge of between $250 – $350 million on Ballarat Gold – a very strong wealth destruction message, along with the performance of other such Victorian-focused gold entities as Leviathan and Perserverance.”

Doyle concluded: “Nonetheless, the recent acquisition of the former A1 Goldmine by Perth based Heron Resources is encouraging to this sector.”