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Greenland-focused miner AEX Gold looks to raise £45m in London listing

Vinjeru Mkandawire

AEX Gold, a gold mining group, is lining up a £45m share issue as it looks to cash in on demand for the precious metal.

The Greenland-focused miner, which is also listed in Canada, will publish its intention to float on the London Stock Exchange’s junior market.

The listing is expected to value the company at £90m. Proceeds from the float will be used to expand its operations in the remote country, whose rich resources have attracted interest from large miners such as Anglo American and Rio Tinto.

The minerals hotspot has also sparked a three-way race between the US, China and Russia for strategic control. Eldur Olafsson, AEX Gold’s co-founder and chief executive, said the company’s operations in Southern Greenland represented one of the largest untapped gold mining opportunities in the developed world.

“There are not many listed gold equities with a high-grade deposit in an OECD jurisdiction,” he added. “We provide an opportunity for investors looking for responsible mining, with proper health and safety, along with relationships with the surrounding communities.”

AEX Gold is chaired by Graham Stewart, the former chief executive of North Sea exploration firm Faroe Petroleum, which was sold to Norwegian oil group DNO for more than £600m last year.

The group is backed by the state development funds of Denmark & Greenland. AEX Gold’s listing signals an end to a months-long drought in listings on the London Stock Exchange since the coronavirus pandemic took hold.

Surface melt water rushing along the surface of the Greenland Ice Sheet - Ian Joughin  /AP

The number of firms going public on global exchanges in the first half of this year hit the lowest point since the height of the financial crisis, according to financial data provider Refinitiv.

In that time, there were four listings on the London Stock Exchange raising $592m, compared with three times as many floats raking in $2.6bn during the same period in 2019.

AEX Gold holds gold exploration licences across 3,356 square kilometres on the Arctic island.

It also owns Nalunaq mine, which is scheduled to start production at the end of 2021