The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) (WHSP) share price is on watch after it decided against an IPO for its Round Oak Metals business.
This decision comes after WHSP had shareholders register their interest in a proposed Round Oak initial public offering (IPO) process.
WHSP said that it decided not to proceed with the IPO of Round Oak at this time because of current market conditions for IPOs. It also said that encouraging exploration results at Round Oak’s ‘Jaguar operations’ in Western Australia was a factor in the decision and has the potential to “materially” extend mine life.
The company said that “Round Oak continues to perform very well with strong operations and favourable copper and zinc prices.”
Management said that it believes that material value for shareholders will be added by extending the life of the mine at Jaguar and progressing its Stockman project in Victoria.
Final thoughts on the WHSP share price
This seems like a good move to hold onto its copper mining operations. The copper and zinc prices are sitting high and copper demand is expected to grow over the coming years.
When looking at the company’s mining operations, I would prefer to see copper being a bigger portion than coal. Copper has a solid growth runway as the world shifts its requirements when it comes to resources.
At the time of writing the WHSP share price is up just over 1%. When looking at the last month it is down 9.6%. I’m not concerned by the WHSP share price drop and would be happy for it to drop further for a great buy price.
