Intergroup Mining IPO | 2023 Updates

image from mining investment company intermining group ,this company is about to go to IPO and the image is of an industrial vehicle carrying dirt down a track

Intergroup Mining Limited IPO is a gold mining firm in Australia that is providing unregulated 12 per cent convertible loan notes that pay 12 per cent per year for three years.

What exactly is Intergroup Mining?

The directors are Walter Doyle (CEO), Brian Stockbridge (Non-Executive Chairman), and Stephen White, according to Intergroup Mining’s website (director).

Doyle and Stockbridge are also the CEO and Chairman of NQ Mining, a publicly traded Australian penny stock mining firm (listed on the NEX exchange at 10p a share at the time of writing).

What is the investment’s level of security for this mining investment?

These investments are uncontrolled business loans, and if Intergroup Mining fails, you could lose all of your money. The bonds’ objective is to enable Intergroup Mining to mine gold in the Brilliant Brumby mine.

If Intergroup Mining fails to generate sufficient returns from its gold mine, or if Intergroup Mining runs out of money to service these bonds for any other reason, there is a danger that it will default on interest and capital payments to investors.

Intergroup Mining may have discovered gold in its gold mine, but its capacity to return the capital and interest will be determined by whether it can extract and sell the gold profitably enough to pay its bondholders 12 per cent per year and have the project profitable within three years (when repayment becomes due).

The investor documents I’ve seen go into great detail about the geological characteristics of Intergroup’s mine, but there’s very little information regarding Intergroup’s projected revenues and expenditures, which is what bond investors care about.

Notes that are convertible

Also, Read – Top 10 Mining Companies in the UK

At the current share price, the shares can be converted to equity shares.

Investors who convert their bonds to equity face the same risk of total loss (as with any individual equity share) if they are unable to find a market for their shares.

Should I put my money into Intergroup Mining?

This blog is not intended to provide financial advice. The remarks that follow are statements of publicly available facts or commonly accepted investment principles, not personalised recommendations. If in doubt, investors should seek the advice of a regulated independent financial adviser.

This investment, like any unregulated corporate bond, is only intended for knowledgeable and/or high-net-worth investors that have a considerable existing portfolio and are willing to risk losing all of their money.

Any investment that pays 12% a year should be regarded as extremely risky. Intergroup Mining’s bonds are riskier than a standard diversified stock market fund because they are individual securities with a chance of total and permanent loss.

Investors should ask themselves the following questions before investing:

  1. How would I feel if the investment failed, the security was sold without raising enough money to recompense all investors, and I lost all of my money?
  2. Do I have a large enough portfolio that a complete loss of my investment will not financially devastate me?
  3. Is it okay with me if I exercise the option to convert the bonds into equity shares, knowing that my capital could be locked up permanently because Intergroup Mining shares cannot be sold on any recognised exchange?

Transaction Overview

IG Mining aims to secure funding of A$17 million, offering shares at a rate of A$0.16 per share, which corresponds to an approximate pre-money valuation of A$137 million. The company intends to achieve a listing on the ASX (Australian Securities Exchange) in 2023.

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by Rachel Buscall

by Rachel Buscall

Co-Founder & Managing Director at New Capital Link. Having started her career in the financial sector, Rachel demonstrated a natural flair for entrepreneurship.

New Capital Link

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Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be very complex and high risk.

What are the key risks?

1. You could lose all the money you invest

If the business offering this investment fails, there is a high risk that you will lose all your money. Businesses like this often fail as they usually use risky investment strategies. 

Advertised rates of return aren’t guaranteed. This is not a savings account. If the issuer doesn’t pay you back as agreed, you could earn less money than expected or nothing at all. A higher advertised rate of return means a higher risk of losing your money. If it looks too good to be true, it probably is.

These investments are sometimes held in an Innovative Finance ISA (IFISA). While any potential gains from your investment will be tax free, you can still lose all your money. An IFISA does not reduce the risk of the investment or protect you from losses.

2. You are unlikely to be protected if something goes wrong

The business offering this investment is not regulated by the FCA. Protection from the Financial Services Compensation Scheme (FSCS) only considers claims against failed regulated firms. Learn more about FSCS protection here. https://www.fscs.org.uk/what-we-cover/investments/ or

Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here. https://www.fscs.org.uk/check/investment-protection-checker/

The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm or Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here. https://www.financial-ombudsman.org.uk/consumers

3. You are unlikely to get your money back quickly

This type of business could face cash-flow problems that delay interest payments. It could also fail altogether and be unable to repay investors their money. 

You are unlikely to be able to cash in your investment early by selling it. You are usually locked in until the business has paid you back over the period agreed. In the rare circumstances where it is possible to sell your investment in a ‘secondary market’, you may not find a buyer at the price you are willing to sell.

4. This is a complex investment

This investment has a complex structure based on other risky investments. A business that raises money like this lends it to, or invests it in, other businesses or property. This makes it difficult for the investor to know where their money is going.

This makes it difficult to predict how risky the investment is, but it will most likely be high.

You may wish to get financial advice before deciding to invest.

5. Don’t put all your eggs in one basket

Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. 

A good rule of thumb is not to invest more than 10% of your money in high-risk investments. https://www.fca.org.uk/investsmart/5-questions-ask-you-invest

If you are interested in learning more about how to protect yourself, visit the FCA’s website here: https://www.fca.org.uk/investsmart

For further information about minibonds, visit the FCA’s website here.https://www.fca.org.uk/consumers/mini-bonds