With help from Western Australian companies such as Western Areas, Equinox Minerals and Moly Mines, the Toronto Stock Exchange accounted for just over half of global equity capital raisings for the mining industry in the first half of this year.
With help from Western Australian companies such as Western Areas, Equinox Minerals and Moly Mines, the Toronto Stock Exchange accounted for just over half of global equity capital raisings for the mining industry in the first half of this year.
The TSX and its junior market, the TSX Venture Exchange, have become increasingly popular sources of capital for mining companies over the past five years, with at least eight WA companies listing in Canada.
TSX Venture Exchange president Linda Hohol highlighted the popularity of the Canadian market when speaking at a Perth conference last week.
In the first six months of this year, just more than $8 billion was raised on the two TSX Group exchanges, which was 53 per cent of all the public equity capital for mining.
“In other words, companies raised more mining finance on TSX and TSX Venture than was raised in all of the rest of the world combined,” Ms Hohol told the conference.
Ms Hohol described the TSX’s speciality as helping small companies grow into bigger ones.
To support this claim, she said nearly three quarters of all capital raisings on the TSX was in the form of secondary offerings, by companies that were already listed.
By contrast, most capital raisings on the London Stock Exchange’s Alternative Investment Market, which has also been used by a number of WA mining and technology companies, were initial offerings.
WA companies Equinox, Moto Goldmines, Anvil Mining and Paladin Resources have used the TSX to undertake large secondary offerings, as they have pursued the development of projects in Africa.
For instance, Equinox recently completed a $123 million capital raising in Canada for its Lumwana copper project in Zambia.
Most of the Australian companies listing on the TSX and AIM have projects in exotic locations and found it easier to gain investor support overseas.
However, Western Areas, Moly Mines and Crescent Gold are companies that have listed on TSX to support development of projects in Australia.
Western Areas raised $21 million in Canada late last year and recently completed a $45 million rights issue to support development of its Flying Fox nickel mine near Kambalda.
With the nickel price rising strongly and Western Areas on the brink of starting production, the company’s share price has doubled since June to a peak of $3.75.
Moly Mines is the latest WA company to pursue a listing on the TSX.
It has lodged a prospectus to raise $18.4 million, which will be used to complete a bankable feasibility study into its $620 million Spinifex Ridge molybdenum project.
Mirabela Nickel, which is planning to develop a nickel project in Brazil, is aiming to list on the TSX by the end of the year.
Chief financial officer Stephen Hills said the company would lodge an application to list on the TSX as soon as it obtained an updated resource estimate.
While the TSX is a popular market, there remain plenty of other options for WA mining companies.
Iberian Resources is developing the Lichkvaz gold project in the former Soviet republic of Armenia and would therefore be a contender for a TSX or AIM listing.
However, it has just completed a $17.5 million placement to Australian and international clients of Perth broking firm Patersons Securities.
Marengo Mining, which is seeking to develop a copper and molybdenum project in Papua New Guinea, this week raised $12.5 million through a placement to Australian and international investors.
About half the funds came from Sentient Group, an investment manager based in the Cayman Islands.
