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Overview

Our clients were concerned that their IPO would not be successful and that they would not achieve a fair share price owing to the decline in chrome ore prices. Core Consultants was therefore asked to conduct an independent market analysis on the chrome ore industry and provide an outlook for chrome ore prices.

Methodology

Core Consultants used its proprietary chrome industry database as well as interviewed each South African chrome mine in order to establish the average production costs of the industry. In this way Core Consultants was able to determine the minimum required chrome ore price for the market to remain in balance.

Our Recommendation

The minimum chrome ore price required in South Africa was higher than current prices. We therefore provided an independent forecasts that chrome ore prices should improve over the medium term and presented these findings to investors.

Outcome

The company delayed its listing date and eventually issued a bond which was fully subscribed. In addition, the company received interest from five different investors wishing to take significant positions in the company. The Core Consultants report is used to educate interested investors and fund managers about the chrome market.

author avatar
Lara Smith
Lara is the CEO and founder of Core Consultants. She has been an analyst for over thirteen years and has focused on commodity markets for just over a decade. She began her career as a buy-side analyst at Foord Asset Management in Cape Town, before taking a Head of Research role at a mining corporate finance and investment firm.
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