There's nothing like a little geopolitical scare to have investors looking for gold exposure. 

The timing of gold and copper explorer Magmatic Resources' initial public offering is opportune, given concerns about the presidential longevity of Donald Trump have pushed up the price of gold.  

Magmatic is poised to hit the ASX boards on Friday after raising $4 million through Patersons Securities out of Perth. It will begin life as a public company with a $16 million market capitalisation. 

Its main assets are four advanced exploration projects covering 850 square kilometres in the East Lachlan Fold Belt in central New South Wales, home to Australia's largest gold mine, Newcrest Mining's Cadia Valley operation.

Magmatic picked up the projects from South African gold major Gold Fields, which had spent $13.5 million on exploration on the tenements before passing them on. 

Gold Fields retains a 19.9 per cent stake in Magmatic that is under escrow for 24 months. 

Magmatic's board includes non-executive director Malcolm Norris, who is something of a veteran in the field of sourcing copper-gold porphyry deposits. Norris played a leading role in the discovery of the Tujuh Bukit deposit in Indonesia and the Cascabel deposit in Ecuador.

Magmatic will be the eleventh resources IPO this year, underscoring improved investor sentiment towards the sector. 
 

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This month's vote on Investa Office Fund taking a 50 per cent stake in its management platform hangs in the balance. 

Street Talk understands the shareholder vote is shaping up as a close call. 

That comes after proxy firm Institutional Shareholder Services on Thursday urged investors to vote against a proposed partial internalisation of the platform, as revealed by this column.

ISS is said to be associated to about 40 per cent of institutional investors that draw on proxy recommendations, meaning the firm will wield significant influence over voting intentions. 

Proxies must be received by May 29 ahead of the meeting two days later. 

Sources said ISS had the strongest weighting among its peer group on the Investa register, although some large investors would look at all three proxy recommendations before deciding how to vote. 

"A vote against the proposal is warranted because the case has not been made that the benefits outweigh the inherit risk and limitations of the joint ownership structure," ISS said in its report. 

Proxy firm Ownership Matters has recommended a vote for the partial internationalisation, citing greater control, while CGI is yet to make its views on the vote known.

BT Investment Management is supportive of the proposal, but it has raised the ire of suitor Cromwell Property Group which is voting against it.

In a statement on Thursday, Cromwell which owns 9.83 per cent of IOF, said the implementation of the proposal represented a "worst of all worlds" outcome for IOF investors.

"The proposal is a compromised, related-party transaction which materially benefits Investa Commercial Property Fund, while offering limited value and marginal accretion for IOF investors at a cost of at least $45 million."

The independent directors of Investa's responsible entity told investors to give the proposal the green light. 

The proposal needs more than 50 per cent of votes cast to be in favour for IOF to succeed.

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Nothing in life is more certain than death, taxes and speculation that Rio Tinto might acquire the 49 per cent of Turquoise Hill Resources (TRQ) that it does not already own.

The full takeover has been regularly mooted since Rio took control of the company, which used to be called Ivanhoe Mines, in 2011.

So when Bloomberg terminals showed that Rio had increased its stake in TRQ by about 6 million shares on Thursday morning, there was no shortage of raised eyebrows and racing pulses.

Rio has good reason to want the remainder of TRQ, given the Canadian company owns 66 per cent of one of the world's most exciting new copper mines; the giant Oyu Tolgoi mine in Mongolia.

Oyu Tolgoi is Rio's most exciting growth project, yet because of the ownership structure through TRQ, Rio effectively owns just 34 per cent of the copper, gold and silver that comes from the mine.

Many observers, including Deutsche's respected mining analyst Paul Young, have opined in recent years that it would make sense for Rio to own more of Oyu Tolgoi, particularly given copper prices are tipped to rise over the next three years.

Rio's debt situation is healthy enough to handle an acquisition, and there are few safer takeovers than buying more of something you already own.

So was the creep up the TRQ register this week a sign Rio is set to launch a full raid on TRQ? 

That remains unclear; some party-pooping sources believe the 6 million shares were linked to a share issue conducted by a small company that both Rio and TRQ own shares in; Entree Gold.

Entree owns much of the land around Oyu Tolgoi and has in recent weeks split itself into two companies named Entree Resources and Mason Resources. Some believe that process of issuing shares in Mason has inadvertently led to Rio's small, and innocent rise up the TRQ register.

Others reckon it is a more deliberate creep by Rio and the start of a full takeover play for TRQ.

Rio is expected to clarify the situation on Friday, and either way, Rio is now a small step closer to taking out the remainder of TRQ.

The biggest dilemma for Rio is whether to strike now, before copper prices start rising around 2020, or to wait until the $USUS5.3 billion underground expansion of Oyu Tolgoi is built and fully derisked.

Don't be surprised if, by the time Oyu Tolgoi reaches peak production in 2025, Rio has taken out both TRQ and Entree.

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With Ten Network's billionaire shareholders in the spotlight, it's easy to forget who the television network has to repay at the end of the year. 

Commonwealth Bank of Australia has a $200 million loan on the hook, of which $66.2 million had been drawn down as at April 26.

While the loan is guaranteed by Ten's big three shareholders - Lachlan Murdoch, James Packer and Bruce Gordon - Commonwealth Bank isn't laying idle. 

Street Talk understands CBA has PPB Advisory on the hook as investigating accountant, with the insolvency and restructuring specialist likely to be asked to provide a "fairness opinion" when [and if] a debt-for-equity swap gets under way. 

Appointing an investigating accountant is the first step lenders often take when they are worried about a company's solvency, and whether its loan is likely to be repaid. 

It's also a commonly used tactic to apply heat on the borrowing company's board, and serve as a reminder about where the bank sits in the case of administration or receivership. And it ensures swift movement down the track should the company face a restructure. 

Ten laid it all on the line at the company's half-year results in April. The television company's directors devoted more than 800 words to addressing Ten's ability to continue as a going concern in the half-year accounts, leaving shareholders in no two minds about the company's plight. It needs to convince the guaranteeing shareholders that future earnings are on the up. 

PPB's involvement is the final piece of the adviser puzzle. 

As revealed by Street Talk, distressed situations banker Jim McKnight, who was formerly head of restructuring and debt advisory at UBS and now runs Fort Street Advisers' sector team, is working away for the billionaire guarantors Lachlan Murdoch, Bruce Gordon and James Packer. 

Ten has engaged both McKinsey and KordaMentha to help it deal with the increasing pressures it is facing, while Citi and law firm Gilbert + Tobin are also tending to the troubled network.

UBS is understood to be working for Packer, who had shopped around his 7.7 per cent stake in Ten, with few interested buyers.

Gordon owns 15 per cent and Murdoch owns 7.7 per cent (News Corp, of which Murdoch is co-chair, via Foxtel has another 13.9 per cent).
 
 

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JPMorgan's head of financial sponsors, Oliver Bowler, has been hired by Ben Gray's new private equity firm. 

The investment bank informed staff of Bowler's departure late on Thursday. 

It is understood Bowler, who spent six years at JPMorgan, will join the new firm as a vice-president.

Bowler's appointment comes after Street Talk revealed on May 12 that Credit Suisse managing director Stephanie Charles would become the firm's third partner.

Gray and his former TPG colleague Simon Harle have been on garden leave since January 1, preparing the country's newest private equity firm, which is expected to open its doors later this year.

As this column reported last month, the pair have started hiring and have an office in Melbourne's 101 Collins Street building. 

 

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