DDH1 to float on ASX amid rising drill activities

Australia’s largest diamond core drilling contractor DDH1 is set to float on the ASX by launching an initial public offering (IPO) to raise $150 million.

The employer of 580 is selling 136.4 million shares at $1.10 per share, with offers to open on February 17 until February 26.

Upon completion, DDH1 existing shareholders including its founders, Oaktree Capital Management, will hold a total of 205.9 million shares.

The $150 million raising will set DDH1 up to fund repayment of debts and expenses, giving it access to markets to pursue further growth.

The company stated this IPO was a great opportunity for investors as mineral drilling services were required across all stages of a mining operation, from exploration to mine closure, while mining expenditure was continuing to grow.

According to figures from the Australian Bureau of Statistics, total metres drilled in Australia rose by 61 per cent between the 2016 and 2020 financial years.

“DDH1 has the equipment required for and expertise in (diamond core, reverse circulation and air core) drilling methods to provide clients with the samples they require for their drilling programs,” DDH1 stated.

“The recent rise in mining industry capital expenditure has been driven, in part, by continued growth in commodity export volumes and prices.

“Provided that demand for commodities continues, this could provide the mineral exploration and mining industry with a positive outlook and suggests scope for further growth in mining sector capital expenditure.”

DDH1 expects its shares to return to normal trading on or around March 9, allowing applicants to trade their shares.

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