How have the TSX and TSXV performed over the past year?

2022 was an extremely difficult year in terms of financing activity and new listings, but the equity capital markets started to improve by the end of 2023, and 2024 kicked off on an upward trend with First Quantum closing a C$1 billion equity bought deal, the largest in Canada’s history. This was followed by continued improvement in the mining financing space, particularly amongst the larger issuers, and, as the year progressed, we started to see the increased activity spread to the junior, early-stage mining companies. By the end of August 2024, we already had 30 new listings, a significant increase from the 20 we saw throughout 2023, and an incredible achievement considering our nearest competitor has only seen 15 new listings so far in 2024. The pandemic, geopolitical tensions, and a high inflationary environment had a great impact on the global mining sector and the financing market has not yet returned to the levels we saw in 2021, but the upward trend we have experienced in 2024 thus far has been encouraging, and the interest rate cuts by Canada, Europe and now the US, as well as increasing commodity prices, have given the mining sector reasons to be optimistic going forward. 

Can we expect the valuation of juniors to catch up to the high commodity prices we are seeing?

We should recall that the equity market is largely driven by investors' expectations of a return on investment; but also constrained by market fear and volatility. Fundamentals of supply and demand in the case of critical minerals and precious metals’ correlation to “safe haven” needs and macroeconomic factors are no doubt influencing commodities pricing positively. Once geopolitical tensions subside, coupled with the continued reduction in interest rates, no doubt the equity market will catch up to commodity prices’ trajectory. Market confidence and increased risk appetite will close the gap.

Are you seeing more appetite for foreign investment in African mining from non-Chinese players?

The energy transition has certainly highlighted the demand for critical minerals. Despite the traditional challenges in many countries in Africa, the fundamentals in terms of the supply of commodities needed to meet global emission reduction targets, investors are increasingly realizing there are significant opportunities which may outweigh jurisdictional risks, which may be managed or mitigated in many cases. The Chinese have certainly exemplified this approach in many cases around the world in the past 20 years. Perhaps the best example in Africa is the success of Ivanhoe Mines in partnership with Zijin Mining Group on the Kamoa-Kakula copper project in the DRC. As investors and indeed many Western governments “play catch-up" to the Chinese, I believe we will continue seeing increased interest and investments in the continent.   

What is the TMX Group’s stance on the Canadian government’s decisions to restrict certain foreign investments into its domestic mining sector?

The government’s restrictions on investments by foreign SOEs are a major concern, especially because of the opaque and unilateral manner in which the federal government has been operating in this regard. Both TMX Group’s CEO and Toronto Stock Exchange’s CEO have publicly voiced concerns on how this approach may negatively impact Canada's economy as well as the health and strength of our capital markets. All Canadians would agree with the intent to protect our national interest in the critical minerals supply chain. The execution, however, has only served to create confusion with its lack of clarity and consistency, with many of the cases involving projects that are located outside of Canada. We have already seen companies taking steps to protect themselves from the Canadian government by redomiciling, while keeping their TSX/V listing. We continue our lobbying efforts with the government in trying to protect our leadership position in the mining sector and for the betterment of Canadian capital markets.

In addition to the Investment Canada Act issues, we have also been lobbying hard around short-selling challenges that many junior companies feel are impacting their share price and shareholder maximization. We advocate against any policy or issues that may hinder our clients from reaching their full potential. In terms of short-selling issues, we believe there are some opportunities for our regulators (CIRO) to align Canada’s rules around short-selling to those of the US, for instance. These lobbying efforts are a big focus for us as we are committed to our clients' success. 

What opportunities do you see for the TSX globally, and where will you be focusing your efforts moving forward?

TSX has one of the largest portfolios of international clients of any exchange globally. Our strategy has always been global, to the extent that we have hired full-time boots-on-the-ground representatives in several global markets to engage with existing clients and meet potential new clients. We are seeing significant traction from Australia in particular, as more Australian-based mining companies are diversifying and growing their projects into the Americas. As they do so, facilitating investors in this time zone is only one of the many reasons for them to join our markets. Recent examples have been Westgold Resources following their acquisition of Karora. Paladin Energy is another that has announced a similar intent after their announced acquisition. 

TSX and TSXV are leaders in junior exploration and development. When large global miners are looking to acquire assets to grow their portfolio, they naturally look to our markets. Joining our markets only helps their success in this hemisphere, with increased trading and visibility which follows, building equity currency for more M&A opportunities. We are encouraged by the interest we are getting from Australian-based companies looking to join our markets. We also continue to see opportunities for growth in Latin America. Early in the new Milei government, Argentina is a particular area of focus for us. 

Recently, some exchanges have reported more delistings than IPOs - is this a trend the TSX/TSXV is experiencing?

No, we have not observed such a trend of more delistings than new listings. There has certainly been a shortage of large IPOs over the past three years. Fortunately, we see more new listings with 30 new listings so far this year. The majority of these new listings are junior companies. The shortage of IPOs is affecting all sectors globally. The high interest rate environment and various geopolitical tensions around the world has a lot to do with that. As these factors subdue, no doubt a lot of equity capital sitting on the sidelines will enter the market, supporting the many large IPOs we know are waiting for the right market environment.   

Was the mining sector well represented in the 2024 TSX30 list?

The TSX30 celebrates the top 30 performing companies on our senior market based on dividend adjusted share price appreciation over the past three years. In 2024, there was an increased focus on certain commodities, particularly uranium with one of the outstanding companies being Cameco. Other trends on the list included other critical minerals focused companies. With record gold prices, precious metals companies stood out as well. 

Do you have a final message?

TSX continues to enjoy leadership in the mining sector, and although it has been a challenging year, especially for our very junior mining companies; we are encouraged by the observed increased financing activities and improving macroeconomic environment. The market is now starting to step out of many of the challenges it was facing, and we are doing as much as we can to help our existing and prospective clients stay in front of investors and prepare themselves for the windows of opportunities we expect in the coming months. 2025 will be a pivotal year and everything is lining up for the mining sector to outperform.