Mont Royal Resources floats on ASX in search of gold following oversubscribed IPO

Mont Royal Resources ASX MRZ IPO gold Edjudina Yule River
Mont Royal Resources plans to use funds raised from the IPO for a drilling program at its Edjudina gold project in Western Australia.

Aspiring gold explorer Mont Royal Resources (ASX: MRZ) will make its debut on the Australian Securities Exchange today following an oversubscribed $5 million initial public offering (IPO).

The funds were raised through the issue of 25 million shares at $0.20 each and will be used to explore the gold potential of its two Western Australian assets – the Edjudina and Yule River projects.

The newly-incorporated company acquired the Edjudina project near the end of last year through its wholly-owned subsidiary Mont Royal Exploration Australia Pty Ltd.

This project, located about 170km northeast of Kalgoorlie in WA’s goldfields region, is considered prospective for Archaean lode style gold deposits.

Under its acquisition agreement, Mont Royal also has an exclusive option to acquire a much larger tenement area comprising the Yule River project.

This 225sq km project lies about 40km to the south-west of Port Hedland in WA’s north and is considered prospective for Archaean mesothermal lode style gold deposits.

Over the past three decades, previous explorers of the project areas have included Newcrest Mining (ASX: NCM), St Barbara (ASX: SBM), Resolute Mining (ASX: RSG) and De Grey Mining (ASX: DEG).

However, the biggest selling point for the company is not its assets but the people behind it.

Strong board

One of Mont Royal’s directors is Michael O’Keefe, the former chairman of Mozambique coal explorer Riversdale Mining before it was sold to Australian mining giant Rio Tinto (ASX: RIO) for $4 billion in 2011.

Mr O’Keefe was also a key player and founding shareholder of Canadian coking coal developer Riversdale Resources, which is currently being targeted by Gina Rinehart’s Hancock Prospecting with a $591 million takeover bid.

Mr O’Keefe is chair and chief executive officer of dual-listed Champion Iron (ASX: CIA) and his experience in managing mining companies extends back to the 1970s with Mt Isa Mines and Glencore also on his resume.

In addition, Mont Royal’s chairman is Mr O’Keefe’s long-term business partner, Gary Lawler, who has held multiple board positions including being a current director of Champion Iron and Riversdale Resources.

Mr Lawler has also practised law with particular expertise in mergers and acquisitions and corporate governance.

The executive director on Mont Royal’s board is Peter Ruse, whose experience lies in equity funds management and wealth management specialising in the mining and industrial related sectors.

Exploration programs

The IPO funds are expected to be applied over the next two years, with between $1.25-$1.98 million in the budget each year for exploration programs and around $500,000 per year allocated to “future acquisition costs”.

Mont Royal said following listing, its primary focus would be on establishing a detailed field and drilling program at the Edjudina tenement to “prove and classify the project to JORC Code standards to assess development options”.

It also planned to “pursue new projects and opportunistic acquisitions in the resource sector in various jurisdictions”.