Orlee Wertheim
Head, Business Development – Global Mining
Toronto Stock Exchange and TSX Venture Exchange
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View from the Top

Jump in TSXV Good Omen for Mining Juniors

Sat, 10/28/2017 - 14:59

Q: To what extent have you seen confidence return to the global mining sector as prices have risen during 2017?

A: In early 2016 we began to see more investor interest in precious metals, particularly gold and silver, as well as battery metals such as lithium. There was a 38 percent increase in the amount of capital raised by mining companies listed on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV), along with an increase of 134 percent in money raised on TSXV, where the vast majority of junior companies are listed. This shows that there has been a substantial increase in the amount of money flowing into exploration. During the downturn, everyone suffered from a lack of access to capital but that issue was more acute for the juniors. But exploration companies are now going to market more frequently – at least a couple of times a year – and that is an encouraging sign. There is still some way to reach the peak of a few years ago but there is no doubt the industry is moving forward.

Q: What does Toronto Stock Exchange do to help junior companies get access to capital?

A: We are constantly looking at how we can ensure that investors have confidence in the companies listed on our market and to do that we need to make sure there is a strong set of rules and regulations designed to make investors feel comfortable. TSX and TSXV each have different sets of regulations because we recognize that companies at varying stages of development need to be governed differently. We are always making small changes to these regulations depending on the market’s evolution. We also need to make sure that our issuers can access capital without having to navigate complex regulations while maintaining a clear and efficient rulebook. Wherever possible, we try to simplify our processes to enable companies to save time and money and reinvest capital into their projects.

We set up the TSX Venture 50 program to recognize the 50 top performing companies listed on the exchange divided by industry. Every year, the top 10 mining companies are selected as part of the program and we organize a large campaign to tell the market about each company and the reason behind its success. We help each company prepare a video, which we show on our website and a variety of different platforms, as well as connecting the companies to investors and other sources of capital.

Q: What benefits could a dual-listing on both TSX and BMV offer to mining companies operating in Mexico?

A: I always feel that a dual listing could prove beneficial under the right circumstances. For example, a mining company that is headquartered in Canada might consider a listing in Mexico to allow the local investor community to participate. It can also help boost government relations. The issue is that the threshold to list on the BMV is set at a much higher level than either TSXV or TSX. For one, to list on the BMV a company has to have revenue and thus be a producer, which rules out a large chunk of the market. We see more dual-listings in jurisdictions such as Chile and Peru, which have a similar support system for junior exploration companies.

I believe that the larger Mexican mining companies could stand to gain by listing on TSX. They are already wellcapitalized but there is a solid investor base in Canada. It would also open up avenues for M&A deals and further exposure. We have over 200 analysts that cover the mining sector, so there is a wealth of opportunities here.

We have a strong relationship with the BMV. We are in frequent communication, travelling to Mexico fregularly, and we are always discussing ways to collaborate and share information. In Latin America, there are many small enterprises participating in the mining sector and they do not appreciate the value of a listing on the stock exchange. During our visits, we try to educate the local community about the benefits of going public and I believe we are seeing a fundamental shift in the new generation where more and more private companies are considering an IPO.