Global miners embracing Canadian listings

The story line behind a recent run of IPOs and new listings, large and small, is the sector’s affinity for the Toronto markets

It was a light, yet telling, moment in the run-up to the third-largest mining IPO in TSX history. Ivan Grbesic, a partner at Stikeman Elliott and lead lawyer for the firm in its handling of Nexa Resources SA’s (TSX:NEXA) US$496-million October IPO, recalls the day he alerted the Ontario Securities Commission about their potential new offering. “When we said there were 12 technical reports, I think they were a little taken aback,” says Grbesic.

Who could blame them? Initial public offerings for miners with 60 years of production experience and five operating, long-life underground mines don’t come along every day. Investors were equally impressed. They piled in the day that shares in the world’s fourth-largest zinc miner began trading in both Toronto and on the NYSE, pushing up the price 9% at the close.

Also basking in the warm glow of the biggest mining IPO since Franco-Nevado Corp. (TSX:FNV) debuted in 2007 was the TSX itself. However, the significant news there wasn’t just that Nexa had chosen the Toronto market (along with New York) for its IPO, but also that it was merely one in a slew of recent mining IPOs and new listings on the TSX and TSX-Venture exchanges. That surge extends a pattern that saw the TSX and TSX-V land more mining new listings in 2016 than the rest of the world’s markets combined. “This is one of those instances where the TSX has shown that it’s become a premier mining market in the world,” says Grbesic.

Nexa, the list of recent IPOs includes Ero Copper Corp. (TSX:ERO), Titan Mining Corp. (TSX:TI) and Silver Viper Minerals Corp. (TSX-V:VIPR).

But it’s the new listings that add another wrinkle—with at least several on the junior side coming to Toronto in the belief that it offers better prospects than the AIM exchange in London.

Take Tethyan Resources PLC (TSX-V:TETH). In September, this UK-based gold and base metals exploration firm announced that upon securing a TSX-V listing, it would delist from AIM. “The added benefit of continued trading on AIM is outweighed by the regulatory burden and [associated] costs,” it said in a statement.

In October, another AIM-listed firm, Condor Gold PLC, a Nicaraguan gold miner, announced approval of a TSX-V secondary listing. At the time, Mark Child, Condor’s CEO, told one media outlet: “London is not a great place to be listed as a junior explorer.” A Condor statement also noted “the vast majority of mining and exploration companies operating in South America are TSX/TSX-V listed.”

This last point, according to Grbesic, is an important aspect of the TSX’s recent surge in popularity. “We’ve seen historically a number of Latin American companies that were looking to London as their financing destination. I think we’re seeing a trend now of Latin America-focused companies that are coming to Toronto instead.”

Story by Listed Staff.

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