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South Africa, Australia and London are trying to convince more mining companies to list on their exchanges, an effort that poses a threat to Canada’s dominance with junior miners.
Hundreds of explorers and small miners have flocked to the Toronto Stock Exchange and the Toronto Stock Exchange Venture because they are friendly to the industry and an easy place to raise capital. But the landscape is shifting as Canada’s competitors make a bigger effort to attract mining companies.
“For a long time there was a perception that if you listed in North America, you would attract a higher multiple. But that’s not the case anymore,” said Eddie Grieve, senior manager of the Australian Securities Exchange’s listings business development.
Mr. Grieve describes the rivalry between the Canadian and Australian exchanges as friendly, as the two countries have similar resource-based economies and histories of mining.
The Australian exchange started targeting Africa about five years ago and it has paid off. According to Mr. Grieve, ASX dominates in Africa, where there are around 209 companies with African projects on his exchange, compared with about 177 on the Toronto bourses.
This is painful fact for the South African bourse, which enjoys top rankings from the World Economic Forum but only has 71 listed miners. “South Africa is endowed with minerals. We should be the mining mecca for the African continent and the fact is we’re not,” Noah Greenhill, a representative of the Johannesburg Stock Exchange, said.
Mr. Greenhill and Mr. Grieve were in Toronto last week to talk to prospective issuers at the Prospectors and Developers Association of Canada conference.
Mr. Greenhill said Canada is a premier destination for miners to list because it has been building the financial infrastructure around mining for decades.
Unlike South Africa, where the bulk of metal exploration was historically handled by senior producers like Anglo American, thousands of Canadians have been exploring for minerals for years.
The Canadian miners have had to tap public markets for funding, which has conditioned investors to accept risks associated with mining.
It has also created deeper pools of capital as well as an industry dedicated to helping miners raise money.
Canadian banks like BMO Nesbitt Burns, Royal Bank of Canada and GMP Securities have a long history of serving the mining industry through good times and bad.
“They stick with mining even when the appetite drops,” said Al Gourley, who works with explorers and miners globally as co-head of Fasken Martineau law firm’s mining group in London.
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