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TORONTO (miningweekly.com) – The number of companies that have delisted from the TSX and the TSX-V is far fewer than many commentators predicted, while the level of financing activity by mining companies on both exchanges has also increased, attendees at the mineLatinAmerica convention, in Toronto, were told.
Alternative fiscal models had also helped many companies weather the downturn, although success had frequently depended on a company having the right investment profile: either being in production or holding advanced-stage projects.
GETTING BETTER
In a market still looking for signs of improvement, the increase in the number of financings on both the TSX and TSX-V compared with 2013 had been a positive development, TSX-V venture exchange director for listed services Tim Babcock said. This included companies in the mining sector and reversed the downward trend witnessed over the past few years, he added. “So 2013 was, hopefully, the bottom.”
Issuers in the mining sector had raised $6.7-billion year-to-date in the third quarter, Babcock highlighted, although he noted that this included an early first-quarter raise of around $2.4-billion by Turquoise Hill Resources, the operator of the Oyu Tolgoi copper/gold mine, in Mongolia. “But even if we factor that out, we’re still up in aggregate terms by about 50% compared with 2013 in terms of dollars raised,” he noted.
The wave of capitulation of junior mining companies foreseen by several commentators had not occurred. Some even predicted that up to half of the issuers on the TSX-V would potentially disappear. “But we’ve certainly not seen that,” Babcock explained.
There were currently about 1 500 mining companies listed across both exchanges and around 100 had gone, he said. Some had shifted downwards to the NEX – a separate board of the TSX that provided a trading forum for listed companies that had fallen below TSX-V’s ongoing listing standards – while others had reinvented themselves, moving into technology or being consumed through mergers and acquisition (M&A) activity.
“So it’s not huge doom and gloom. A lot of issuers have put their project development or businesses on care and maintenance and have been able to manage with the money they’ve already raised, or they are using different fiscal models,” Babcock added.
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