Friday May 9, 09:40 AM
Fresnillo IPO set at 555 pence a share, sees market cap 3.98 bln pounds UPDATE
(adds background, CEO comments)
LONDON (Thomson Financial) - The world's largest producer of primary silver Fresnillo Plc. said it priced its shares at 555 pence apiece at its IPO, with market capitalisation expected at 3.98 billion
pounds.
The company said it expects to see gross proceeds of around 900 million pounds from its initial share sale, which will be used to re-pay existing debt and to help achieve growth and expansion of operations.
Fresnillo said JP Morgan was given over-allotment options for 16.3 million shares.
The company will also have a secondary listing on the Mexican Stock Exchange.
Fresnillo and its subsidiaries contain the precious metals assets of Industrias Penoles, S.A.B. de C.V.
The group owns three operating mines in Mexico: Fresnillo, the world's largest primary silver mine, and Cienega and Herradura, both primarily gold mines, as well as a pipeline of projects. The company has plans for a new underground mine which is expected to be a similar size to the existing Fresnillo mine. The company also anticipates starting production at Soledad and Dipolos, in which it holds a 56 percent stake, in 2009 and produce a peak rate of about 100,000 ounces of gold a year in 2010. It has three exploration prospects and, in total, has mining concessions covering approximately 1.3 million hectares in Mexico.
Fresnillo is also looking at joint ventures as well as continued exploration and acquisitions in Mexico and potentially elsewhere in Latin America.
In 2007, Fresnillo made a pretax profit of $161.0 million on sales of $647.9 million.
On today's pricing announcement, CEO Jaime Lomelin said the level of investor demand in the current market environment gives the company confidence in its future.
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