TMX POV - Dual listings for mining companies: Insights from Toronto Stock Exchange

In October 2020, the Australian gold miner Newcrest Mining received approval to list its shares on Toronto Stock Exchange (TSX). This followed Newcrest's 2019 acquisition of a 70% joint venture interest in the Red Chris mine in British Columbia from TSX-listed Imperial Metals Corp. "A North American listing is part of our strategy of pursuing growth in the Americas," said Sandeep Biswas, Newcrest's CEO. "It makes sense for Newcrest stock to be able to be traded in this time-zone," Biswas added. Newcrest also has investments in Ecuador.

Newcrest's listing brought the number of mining companies dual-listed on both the Australian Securities Exchange (ASX) and TSX to ten. Indeed, Australia and Canada share many similarities that make dual listings between the two jurisdictions straightforward. Both nations have a long history of mining – a sector that still dominates their respective stock exchanges. Their legal systems are based largely on English common law and their financial systems are considered extremely stable.

The concept of dual listings is not a new one. For several decades, companies have sought dual listings on overseas stock exchanges, and the rationale for doing so has tended to coalesce around several key arguments, namely:

1. Improved access to capital and liquidity;
2. Greater corporate profile; and
3. Better alignment with a corporate growth strategy.

TSX is well positioned on all three fronts. In terms of capital, North America represents by far the largest pool of liquidity globally. And greater liquidity confers a host of benefits on corporates, not least of which is the ability to raise funds readily or to use equity for acquisitions. On corporate profile building, TSX represents the largest mining exchange globally and consequently has the most analysts, bankers and ecosystem generally to cover the sector. And on alignment of listing venue with corporate growth strategy, the Newcrest example described above speaks to this point. Moreover, given the rich mining jurisdictions within the same time zone and sphere of influence, TSX is pivotal in the funding of many North and Latin American mining properties, including substantial battery metals and other critical mineral deposits.

This last point cuts both ways, and there are of course examples of TSX-listed companies that have obtained secondary listings on the ASX, typically on the back of expansion into Australia. Kirkland Lake Gold is an example of this having listed on the ASX in 2017 following its acquisition – via Newmarket Gold – of the Cosmo mine and Fosterville mine in the Northern Territory and Victoria, respectively.

Related: Toronto Stock Exchange and TSX Venture Exchange are home to more Mining companies than any other market in the world. To learn about the benefits of a TSX/TSXV listing, visit mining.tsx.com

The process of obtaining a dual listing itself is relatively straightforward. The key consideration for Australian issuers is the requirement in Canada and of TSX for a technical report on any material projects prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101). The good news is that the transformation of the JORC compliant technical report required in Australia to a NI 43-101 report is not a difficult one. And from an ongoing disclosure perspective, the requirements of TSX are consistent with those of ASX. As noted earlier, the similarities between our two jurisdictions is encouraging.

Table 1: There are currently [10] companies that are dual listed in Australia and Canada, all of which are in the mining sector

TMX Data

Of course, dual listings are not for everyone. If you are an early-stage exploration company with no assets or relevance to the Americas and no intention of expanding in the region of attracting the attention of global liquidity and capital then you might not benefit from obtaining a dual listing in Canada. Similarly, a TSX-listed company seeking a dual listing on the ASX should have good reason to do so. And even once you are dual listed, there needs to be continued time and effort expended to maximise the value of that dual listing. Routine marketing and engagement with investors and analysts are just some of the things a corporate would need to be proactive in doing.

The pace of global consumption and the scramble for critical minerals supply are just two of the reasons why I am confident that dual listings will continue to attract interest from mining companies seeking international expansion and exposure. The fundamentals in the sector and the need for project and commodity diversification will no doubt see more companies expanding beyond their home markets. As a mining company, a dual listing certainly helps to raise your flag in a mining focused market pretty quickly.

About the author:

Dean McPherson is head of global mining for Toronto Stock Exchange and TSX Venture Exchange. He is responsible for the development and execution of the global strategy for attracting new listings in the mining sector to the Exchanges. Previously, he worked as an investment banker. Before joining the capital markets, he worked as a civil engineer, managing capital projects for Alcoa's bauxite/alumina operations in Jamaica and Fluor in Canada. In addition to an undergraduate honors degree in civil engineering, he earned an MBA from the Schulich School of Business and is a CFA Charterholder.

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