Perth funds progress projects world

The global flow of capital is an essential part of business in an interconnected world.

And just as billions of dollars have been invested in Western Australia from overseas, Perth businesses provide capital for ideas and developments in other countries.

Money flows from listed Perth companies pursuing projects in other jurisdic­tions and foreign companies choosing to base themselves in the west.

According to research by Business News, 23 of the 53 companies that listed on the ASX since January 1 have registered offices in Perth.

Several mining companies with foreign operations have recently listed on the ASX, in­cluding Lithium Energy, which has operations in Argentina and Queensland, and Gen­min, with projects in Africa.

Similarly, some foreign companies have chosen to locate registered offices in Perth in recent years, includ­ing US-headquartered Avita Medical, and Roots Sustain­able Agricultural Technologies from Israel.

RM Capital head of corpo­rate finance Nathan Barbarich has helped several Israeli companies list on the ASX over the years.

Mr Barbarich said compa­nies often wanted to list from Perth to expand their prod­ucts or services to Australia or South-East Asia.

“Perth is in the same time zone as most of those major South-East Asian locations,” Mr Barbarich told Business News.

“Sydney and Melbourne are close, but it’s even more logi­cal to be here than Sydney or Melbourne.”

The shorter travel time to capital cities including Hong Kong and Singapore was also a positive of listing from Perth, he said.

In other cases, Mr Barbarich said he sought out foreign companies he believed had potential to list on the ASX and make their headquarters in Perth.

Companies in particular industries, including mining, were also more likely to list and base themselves in Perth because of the state’s rich resources reserves.

“If you are a mining com­pany, you would probably have an office in Perth,” Mr Barbarich said.

“Chances are, it’s more like­ly to be near your operations.”

Azure Capital partner David Flynn recently helped engi­neering business DRA Global lodge its prospectus.

The group was a private business based in South Africa but wanted to list on the ASX and move closer to its customers in the mining industry.

“They are an engineering mining services firm, and Perth is like the Silicon Valley of resources,” Mr Flynn told Business News.

“A lot of asset owners have headquarters in Perth and management teams sit in Perth, but the assets might be in Africa or the US or Asia.

“For them, it operationally made more sense to be head­quartered here.”

Mr Flynn said investors in Perth knew how the mining industry worked.

“I think there is an inves­tor base in Perth that un­derstands mining, so that’s helpful, but it’s not necessarily large-scale institutional mon­ey like you have on the east coast,” he said.

Skills from the mining sec­tor also made basing a com­pany in Perth more appealing, Mr Flynn said.

“There’s the human capital that’s here, people with expe­rience in resources,” Mr Flynn said.

“There’s people with the tal­ent and skillset that they need here so it’s an easier pool to employ from.”

Among companies seeking the broadest input of capital is WA-based Kincora Copper.

In a letter to investors in March 2021, chairman Camer­on Rae said the company had a dual listing, on the ASX and the Toronto Stock Exchange, to seek access to local inves­tors who were interested in funding local exploration and mining projects.

Another company with a presence in Canada is Urani­um explorer 92 Energy, which is working in the Athabasca Basin in the north of Sas­katchewan and Alberta, and listed on the ASX earlier this year with a $5 million initial public offering.

Chief executive Siobhan Lancaster said 92 Energy list­ed in Perth because it was the only company with exposure to the (Athabasca) basin on the exchange.

In addition, Perth’s experi­ence with the uranium indus­try meant the city was home to knowledgeable people.

“One of the things with Australia is we are actually endowed with more uranium resources than anywhere else in the world, so that means there are a lot of skills in geol­ogy, in managing companies, and this has been exported all around the world,” Ms Lan­caster told Business News.

“Perth is a great mining ju­risdiction and has some great mining skills and some great exploration skills.

“Because of those skills and those skillsets, it seems appropriate that we apply those to other places around the world.”

Perth’s experience in min­ing, especially among juniors, is also attractive to other sectors.

RM Capital’s Mr Barbar­ich said foreign technology companies wanted to move in during the mining bust because investors in Austra­lia were used to investing in riskier projects.

“Spending a million bucks to dig a hole and see if there’s something at the bottom of it is not dissimilar risk profile to developing some sort of technology that may or may not work or may or may not be adopted,” he said.

“They are higher risk sort of stuff.

“Australian investors gen­erally are more willing to take those risks and invest in those sorts of companies when you compare that to, say, Singa­pore, for example.”

RM Capital is in the process of assisting Israeli technology company Gefen Technologies to list on the ASX.

Mr Barbarich said Perth also provided the right environ­ment and regulation for me­dicinal cannabis companies.

“I think going somewhere where you are more likely to have supportive legislation to sell your product or conduct your research or whatever is a factor, so that’s why we are seeing companies like that locate here,” he said.

Zelira Therapeutics manag­ing director Richard Hopkins told Business News in De­cember that many of the first medicinal cannabis compa­nies were established in Perth because of the state’s experi­ence providing capital to the mining sector and because of Australia’s regulations around clinical testing.

“It’s not rocket science to step off from this risk capital from mining into cannabis as it began to emerge,” Mr Hop­kins said at the time.

“The early movers, a lot of their capital came out of WA, so we were the first to build companies, to cultivate cannabis, to do clinical trials, to build clinics, to house them with doctors prepared to pre­scribe medicinal cannabis.”

Zelira Therapetuics was launched when Austra­lia-based Zelda merged with US company Ilera Therapeu­tics in 2019.

The arrangement allows the company to conduct clinical trials in Australia and sell its products in the US.

MGC Pharmaceuticals is also based here but its op­erations are in Europe, after it was offered a backdoor takeover of Erin Resources in 2015.