A decade spent quietly collecting base metal assets could be...

A decade spent quietly collecting base metal assets could be about to bear fruit for Washington H. Soul Pattinson (WHSP), with the century-old investment company advancing plans for an initial public offering of a wholly-owned subsidiary called Round Oak Metals.

Former OceanaGold chief executive Mick Wilkes is already onboard as chairman of Round Oak, which has operating mines in Western Australia and Queensland as well as non-operating growth projects in Queensland and Victoria.
Institutional investors were summoned to a “non deal roadshow” for Round Oak this week and while plans have not been finalised, the most likely scenario is that Round Oak joins New Hope Coal and Brickworks as ASX listed companies that have WHSP as a large shareholder.

Investor appetite for copper is strong on the back of expectations supply of the red metal will struggle to keep pace with demand in the decades ahead, but a shortage of pure copper mining companies on the ASX has sparked a wave of new entrants.

EMR Capital’s copper assets were floated on the ASX earlier this year under the banner of 29Metals while AIC Mines will join the ranks of pure copper producers when it completes last week’s deal to buy Queensland’s Eloise copper mine.

Round Oak’s flagship asset is the Jaguar zinc, copper, silver and gold mine in WA that was previously owned by IGO Limited, while it also has two old mines located in the famous copper district between the Queensland towns of Mt Isa and Cloncurry.

The company’s longer term growth option is the Stockman deposit in the Victorian high country near Omeo.
Soul Patts paid IGO Ltd $32.2 million for Stockman in June 2017 on the promise it would pay IGO up to a further $15 million based on production royalties.

Round Oak also has a sizeable package of exploration acreage south of Cloncurry, meaning it will likely be a close neighbour of AIC Mines.

Soul Patts will report its financial results later this month and it is expected the Round Oak has contributed a net profit after tax of more than $64 million in the year to June 30.

That was a big improvement on the year before when it lost $43 million.
WHSP had previously referred to its base metals assets as the “Copper Chem” group, but they were rebranded Round Oak Metals in 2018.

Copper was fetching $US4.20 per pound; double the prices seen during March 2020.