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For junior mining companies hoping to get listed on the main Toronto Stock Exchange, having a gazillion-dollar deposit in the middle of nowhere is not good enough.
The TSX has sent a clear message to these firms that they need a credible plan to get their product to market. Otherwise, they are not getting off the Venture exchange, where capital is far more scarce.
Earlier this month, the TSX issued a notice targeting companies with bulk commodity projects (like coal, iron ore and chromite) in remote areas. To get a listing on the main exchange, these companies were told they need a plan to develop or access infrastructure, along with a cost estimate for that plan.
Ungad Chadda, senior vice president of the TSX, said the exchange was getting queries from miners that were not clear about these issues. He said the exchange wants to avoid listing miners that have a “fatal flaw right out of the gate.”
“A lot of times you’ll get [companies saying] ‘Oh, I’ve got this multi-trillion asset – this is great!’ And they haven’t really thought through how to get it [to market],” he said.
Several lawyers have stated that the TSX seems to be raising the bar on listing requirements with this disclosure. But Mr. Chadda denied that is the case, saying this is a clarification of the rules.
The disclosure shows that some companies have a very tough road ahead if they want to graduate from the Venture to the main exchange.
“The TSX certainly does not want to suggest it has raised the bar, but they do want to take a closer look at cases where companies are in remote areas,” said Jessica Yee, an associate at Dentons.
For the rest of this article, click here: http://business.financialpost.com/2013/11/28/tsx-warns-remote-junior-miners-need-infrastructure-plans-to-get-listings/