“Another indicator of the global upswing was the return to dual listings, where companies listed on the LSE or the ASX are looking to our Exchanges to access over C$20 trillion in investor capital.”

Dean McPherson

HEAD, BUSINESS DEVELOPMENT, GLOBAL MINING, TMX GROUP

October 29, 2018

59% of the global mining financings took place on the Toronto Stock Exchange and TSX Venture Exchange in 2017. What trends can we expect to see within the resources sector in 2018/2019?

TMX Group’s equity markets, Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV), are global leaders in the mining sector. In 2017, we saw a return of confidence within the industry, with tangible evidence. Q4 brought us one of the largest mining IPOs in TSX’s 165 year-history, with over C$730 million raised by Nexa Resources, a Brazilian company with a dual listing on the NYSE. Two other significant IPOs, Ero Copper and Titan Mining, also took place last year, in addition to the 10 we saw on TSXV.

Another indicator of the global upswing was the return to dual listings, where companies listed on the LSE or the ASX are looking to our Exchanges to access over C$20 trillion in investor capital. The last time we saw any significant IPO activity was 2012, so there is a general enthusiasm returning to the marketplace.  

How has your partnership with the Santiago Exchange Venture strengthened relationships with Latin America over the past few years?

The relationship with SEV certainly continues to strengthen, and second to Canada, LATAM is our strongest market in terms of concentration of companies listed. Although our ties were always strong, the JV showed our commitment to developing capital markets in the region. Companies in Europe and Asia are constantly approaching us to explore the possibility of creating a similar model.

As the social aspect of mining becomes more important, it will be advantageous when communities can start acquiring ownership of mining companies existing within their society. There is intrinsic value in trying to build liquidity within our local market and by leveraging our expertise and our regulatory systems to encourage the development of capital markets in other countries. We are currently looking at ways in which we can expand and market the SEV JV.

What role are CPCs currently playing in helping juniors raise capital and what other models can juniors use to go public?

The Capital Pool Company program (CPCs) has been a huge success for TSX, with 2,464 created since the start of the program, 87% of which have completed qualifying transactions. Currently, we have 78 CPCs trading on TSXV. We encourage the CPC as an alternative way to list and recently saw Sigma Lithium do a qualifying transaction to list via the CPC route. Today, CPCs represent one of four paths companies can use to list on our Exchanges. The alternatives are IPOs, dual listings, and reverse takeovers (RTOs). Since the CPC success, we have introduced Special Purpose Acquisition Companies (SPACs), which are the CPC shell concept, but on TSX. These options give us a unique advantage compared to our competitors.

Are mining companies actively looking to other forms of financing for their projects, such as royalty deals? What trends can we see in junior IPOs at the moment?

We have seen many royalty deals take place in the junior space, but it varies. The closer companies are to production and development, the easier it becomes to attract investors. The general sentiment is that the uptick in mining financing has been slower for the junior sector given that new sectors, such as cannabis and blockchain, have caused a distraction and taken some of the risk capital out of the marketplace. Many juniors are feeling that stress and as a result, are looking at alternate financing more aggressively.

Do you have a final message for GBR’s global investor readership?

Canada is one of the world’s best jurisdictions for mining with Ontario as a leading province in the sector. There is a very knowledgeable investor pool in Canada, from institutional to the retail level. The risk appetite tends to be stronger than most as Canadian investors are not afraid – we know mining, we understand the risk.

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MACIG

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