The stringent regulations and difficulties faced by junior resources companies to remain listed on Australia’s main bourse has sent some of them in search of a more favourable exchange to list on.

As an alternative to the ASX there is already the National Stock Exchange (NSX), which dubs itself the “new home for resources” and has done a fair bit of work in promoting itself to the sector.

READ: The how, what, and why of the NSX — the evolution of an Australian secondary market

But now the Sydney Stock Exchange (SSX), which has been around for over two decades, is coming into the spotlight.

Like the ASX, the SSX is an ASIC-regulated tier one stock exchange. The exchange first opened in 1997 as the Australian property exempt market before receiving a stock exchange licence in August 2004.

Private gold explorer Torque Metals will be the first resources player to list on the SSX. The company previously tried to list on the ASX in late 2018 but was unsuccessful.

China Magnesium Corporation (ASX:CMC), meanwhile, is dumping the ASX in favour of the SSX.

The company has been suspended from the ASX under listing rule 17.3 since July last year.

Under ASX listing rules, the bourse can suspend a company from trading for a number of reasons including if it is “unable or unwilling to comply with, or breaks, a listing rule” or “to prevent a disorderly or uninformed market”.

China Magnesium has been in the process of divesting its offshore operations and focusing on its commodities trading business. At the same time the company needed to cut costs.

 

Less costly, not as many hurdles

One of the SSX’s drawcards for both Torque and China Magnesium was its much lower compliance costs.

“The costs associated with maintaining quotation on the SSX are in the order of 30 per cent less than those associated with a listing on the ASX,” China Magnesium said in May.

The requirements to list on the ASX are a lot harder to meet for companies not generating any revenue like explorers.

The ASX requires net tangible assets, including cash, of at least $4m for companies with no cash generation or a market cap of $15m.

Torque Metals managing director Ian Finch has been in the mining game since the 1970s working for majors like Anglo American and Rio Tinto (ASX:RIO).

He also has experience listing small companies, and says it has become a lot harder to float.

“Having to raise basically $4.5m on the ASX was a big ask for us and for a lot of juniors,” he told Stockhead.

The ASX also sets a minimum IPO issue price of 20c per share and requires a spread of at least 300 non-affiliated security holders who each hold shares with a value (based on the issue price) of at least $2,000.

“We tried to list on the ASX last year and the spread was insurmountable,” Finch explained.

“There just weren’t that many people putting their hands in their pockets and wanting to invest. That coupled with the fact the ASX was actually vetting all of the investors to make sure there wasn’t any double dipping and you weren’t a shareholder in another company that was investing.”

 

Much lower entry price

Meanwhile, the key issue with a minimum 20c issue price is the ability of junior explorers and miners to continue trading at around that level or higher, with many having to conduct capital raisings at substantial discounts to entice new and existing investors.

According to Bloomberg data, of the 537 small-cap (sub-$500m market cap) resources players on the ASX, over half (272) are trading at less than 5c. Nearly 20 per cent are trading at less than 1c.

ASX Code Company Price (intraday) June 16 Market Cap
FHS FREEHILL MINING LTD 0.049 70.54M
FYI FYI RESOURCES LTD 0.049 10.83M
NXM NEXUS MINERALS LTD 0.048 5.68M
KFE KOGI IRON LTD 0.048 37.17M
BCB BOWEN COKING COAL LTD 0.048 38.58M
LOM LUCAPA DIAMOND CO LTD 0.047 29.01M
VYS VYSARN LTD 0.047 13.78M
HRR HERON RESOURCES LTD 0.047 20.15M
GMD GENESIS MINERALS LTD 0.047 62.49M
TON TRITON MINERALS LTD 0.046 52.18M
CXO CORE LITHIUM LTD 0.046 42.36M
KRR KING RIVER RESOURCES LTD 0.046 57.44M
ATC ALTECH CHEMICAL LTD 0.046 40.04M
NES NELSON RESOURCES LTD 0.046 2.69M
SRK STRIKE RESOURCES LTD 0.046 9.32M
AUR AURIS MINERALS LTD 0.046 18.80M
MEP MINOTAUR EXPLORATION LTD 0.045 16.65M
ARS ALT RESOURCES LTD 0.045 26.42M
CXX CRADLE RESOURCES LTD 0.045 8.54M
XAM XANADU MINES LTD 0.044 36.31M
CKA COKAL LTD 0.043 39.71M
PRX PRODIGY GOLD NL 0.043 24.97M
RGL RIVERSGOLD LTD 0.042 11.89M
ONX ORMINEX LTD 0.042 22.64M
PGI PANTERRA GOLD LTD 0.042 8.20M
CSE COPPER STRIKE LTD 0.041 4.38M
CXM CENTREX METALS LTD 0.040 11.68M
GIB GIBB RIVER DIAMONDS LTD 0.040 7.16M
FFR FIREFLY RESOURCES LTD 0.040 3.20M
PXX POLARX LTD 0.040 16.65M
HMX HAMMER METALS LTD 0.039 22.18M
ARV ARTEMIS RESOURCES LTD 0.039 37.22M
AJX ALEXIUM INTERNATIONAL GROUP 0.039 24.74M
LCL LOS CERROS LTD 0.038 8.82M
KRM KINGSROSE MINING LTD 0.038 27.01M
MAR MALACHITE RESOURCES LTD 0.038 2.58M
BEM BLACKEARTH MINERALS NL 0.038 4.32M
ODM ODIN METALS LTD 0.038 9.13M
ASQ AUSTRALIAN SILICA QUARTZ GRP 0.037 7.93M
BCN BEACON MINERALS LTD 0.036 103.04M
QGL QUANTUM GRAPHITE LTD 0.036 7.88M
GME GME RESOURCES LTD 0.036 18.22M
KTA KRAKATOA RESOURCES LTD 0.036 7.88M
ZMI ZINC OF IRELAND NL 0.035 4.25M
LKE LAKE RESOURCES NL 0.035 23.50M
MGU MAGNUM MINING AND EXPLORATIO 0.035 10.66M
HGO HILLGROVE RESOURCES LTD 0.034 19.91M
PEC PERPETUAL RESOURCES LTD 0.034 13.95M
G88 GOLDEN MILE RESOURCES LTD 0.033 2.94M
EUC EUROPEAN COBALT LTD 0.032 24.37M
OKJ OAKAJEE CORP 0.032 2.93M
RXL ROX RESOURCES LTD 0.032 43.74M
AMG AUSMEX MINING GROUP LTD 0.031 17.52M
TAS TASMAN RESOURCES LTD 0.031 15.84M
AIS AERIS RESOURCES LTD 0.031 15.64M
SCN SCORPION MINERALS LTD 0.030 6.14M
GTR GTI RESOURCES LTD 0.030 14.25M
DAU DAMPIER GOLD LTD 0.030 7.14M
AON APOLLO MINERALS LTD 0.030 9.75M
POS POSEIDON NICKEL LTD 0.029 76.64M
SEI SPECIALITY METALS INTERNATIO 0.029 32.20M
FRN FRASER RANGE METALS GROUP LT 0.029 13.20M
CAZ CAZALY RESOURCES LTD 0.029 10.04M
ASN ANSON RESOURCES LTD 0.029 23.40M
TNR TORIAN RESOURCES LTD 0.028 12.47M
VIA VIAGOLD CAPITAL LTD 0.028 3.50M
BRV BIG RIVER GOLD LTD 0.028 36.90M
GBR GREAT BOULDER RESOURCES LTD 0.028 3.74M
IDA INDIANA RESOURCES LTD 0.028 5.66M
MEI METEORIC RESOURCES NL 0.026 28.06M
SIH SIHAYO GOLD LTD 0.026 54.54M
AX8 ACCELERATE RESOURCES LTD 0.026 2.06M
SVD SCANDIVANADIUM LTD 0.025 9.57M
CVV CARAVEL MINERALS LTD 0.025 4.93M
CCZ CASTILLO COPPER LTD 0.024 19.95M
KAI KAIROS MINERALS LTD 0.024 28.67M
AZY ANTIPA MINERALS LTD 0.024 53.08M
AQX ALICE QUEEN LTD 0.024 21.43M
TRT TODD RIVER RESOURCES LTD 0.023 5.42M
MAN MANDRAKE RESOURCES LTD 0.023 5.60M
RDG RESOURCE DEVELOPMENT GROUP L 0.022 13.92M
AWV ANOVA METALS LTD 0.022 27.43M
PGM PLATINA RESOURCES LTD 0.022 7.83M
SUH SOUTHERN HEMISPHERE MINING 0.022 2.39M
FMS FLINDERS MINES LTD 0.022 88.16M
ORM ORION METALS LTD 0.022 10.29M
VMS VENTURE MINERALS LTD 0.021 16.16M
CAP CARPENTARIA RESOURCES LTD 0.021 5.78M
TKM TREK METALS LTD 0.021 1.15M
TRL TANGA RESOURCES LTD 0.021 2.45M
DAF DISCOVERY AFRICA LTD 0.020 3.84M
BPL BROKEN HILL PROSPECTING LTD 0.020 5.53M
NTU NORTHERN MINERALS LTD 0.020 76.98M
TMZ THOMSON RESOURCES LTD 0.020 2.67M
LI3 LITHIUM CONSOLIDATED LTD 0.020 2.95M
VRC VOLT RESOURCES LTD 0.020 36.08M
ARD ARGENT MINERALS LTD 0.019 13.11M
PEK PEAK RESOURCES LTD 0.019 25.30M
VR8 VANADIUM RESOURCES LTD 0.019 7.11M
LCD LATITUDE CONSOLIDATED LTD 0.019 5.23M
HCH HOT CHILI LTD 0.018 35.74M
EMU EMU NL 0.018 5.36M
AUC AUSGOLD LTD 0.018 19.91M
ARM AURORA MINERALS LTD 0.018 4.22M
VAR VARISCAN MINES LTD 0.018 3.71M
POD PODIUM MINERALS LTD 0.018 3.48M
BAR BARRA RESOURCES LTD 0.017 10.14M
TAR TARUGA MINERALS LTD 0.017 6.64M
FEL FE LTD 0.017 6.84M
CRL COMET RESOURCES LTD 0.017 6.12M
LER LEAF RESOURCES LTD 0.017 5.71M
IVR INVESTIGATOR RESOURCES LTD 0.017 13.53M
PUA PURE ALUMINA LTD 0.016 4.74M
ALY ALCHEMY RESOURCES LTD 0.016 8.81M
AYR ALLOY RESOURCES LTD 0.015 4.70M
REZ RESOURCES & ENERGY GROUP LTD 0.015 5.82M
MDI MIDDLE ISLAND RESOURCES LTD 0.015 31.98M
CZR COZIRON RESOURCES LTD 0.015 33.41M
ORN ORION MINERALS LTD 0.015 43.49M
AUQ ALARA RESOURCES LTD 0.015 9.52M
MGL MAGONTEC LTD 0.015 17.10M
LMG LATROBE MAGNESIUM LTD 0.015 16.85M
GES GENESIS RESOURCES LTD 0.014 10.96M
TRM TRUSCOTT MINING CORP LTD 0.014 1.65M
PM1 PURE MINERALS LTD 0.014 8.79M
MTH MITHRIL RESOURCES LTD 0.014 21.64M
OAU ORA GOLD LTD 0.014 10.05M
EQE EQUUS MINING LTD 0.014 18.36M
NWC NEW WORLD RESOURCES LTD 0.014 13.82M
EMT EMETALS LTD 0.014 5.74M
CML CHASE MINING CORPORATION LTD 0.013 3.10M
CLA CELSIUS RESOURCES LTD 0.013 10.14M
FAU FIRST AU LTD 0.013 4.86M
FIN FIN RESOURCES LTD 0.013 3.79M
JDR JADAR RESOURCES LTD 0.013 6.82M
GBE GLOBE METALS AND MINING LTD 0.012 5.59M
IPT IMPACT MINERALS LTD 0.012 18.71M
MSE METALSEARCH LTD 0.012 14.12M
WSI WESTSTAR INDUSTRIAL LTD 0.012 11.24M
SCI SILVER CITY MINERALS LTD 0.012 4.42M
HIP HIPO RESOURCES LTD 0.012 4.64M
ERL EMPIRE RESOURCES LTD 0.012 9.60M
AQD AUSQUEST LTD 0.012 8.13M
GML GATEWAY MINING LTD 0.012 18.75M
KP2 KORE POTASH PLC - CDI 0.012 10.31M
AEV AVENIRA LTD 0.012 5.29M
WML WOOMERA MINING LTD 0.012 2.20M
LIN LINDIAN RESOURCES LTD 0.012 6.98M
MCT METALICITY LTD 0.012 16.66M
ENT ENTERPRISE METALS LTD 0.011 5.72M
WCN WHITE CLIFF MINERALS LTD 0.011 4.87M
MRR MINREX RESOURCES LTD 0.011 2.28M
PIO PIONEER RESOURCES LTD 0.011 16.60M
GNM GREAT NORTHERN MINERALS LTD 0.011 7.94M
AVL AUSTRALIAN VANADIUM LTD 0.010 25.66M
FNT FRONTIER RESOURCES LTD 0.010 4.89M
MLM METALLICA MINERALS LTD 0.010 3.24M
WWI WEST WITS MINING LTD 0.010 10.08M
VML VITAL METALS LTD 0.010 21.43M
PAK PACIFIC AMERICAN HOLDINGS LT 0.010 2.77M
TIG TIGERS REALM COAL LTD 0.010 63.11M
ESR ESTRELLA RESOURCES LTD 0.010 5.35M
PPY PAPYRUS AUSTRALIA LTD 0.010 2.79M
DRX DIATREME RESOURCES LTD 0.010 18.55M
CGN CRATER GOLD MINING LTD 0.010 12.27M
KAS KASBAH RESOURCES LTD 0.010 1.35M
HLX HELIX RESOURCES LTD 0.010 6.03M
RIE RIEDEL RESOURCES LTD 0.009 3.76M
PNX PNX METALS LTD 0.009 22.88M
ACP AUDALIA RESOURCES LTD 0.009 6.05M
MRQ MRG METALS LTD 0.009 8.64M
KOR KORAB RESOURCES LTD 0.009 2.99M
ADY ADMIRALTY RESOURCES NL 0.009 10.43M
NCR NUCOAL RESOURCES LTD 0.009 6.92M
CUL CULLEN RESOURCES LTD 0.009 2.02M
IBG IRONBARK ZINC LTD 0.008 7.36M
NXE NEW ENERGY MINERALS LTD 0.008 1.37M
GED GOLDEN DEEPS LTD 0.008 2.81M
LSR LODESTAR MINERALS LTD 0.008 6.82M
MBK METAL BANK LTD 0.008 7.06M
AMD ARROW MINERALS LTD 0.008 8.74M
AUZ AUSTRALIAN MINES LTD 0.008 32.63M
CDT CASTLE MINERALS LTD 0.008 2.18M
VKA VIKING MINES LTD 0.008 2.51M
SRZ STELLAR RESOURCES LTD 0.008 3.54M
CAE CANNINDAH RESOURCES LTD 0.008 1.55M
PWN PARKWAY MINERALS NL 0.008 15.45M
CHK COHIBA MINERALS LTD 0.008 6.97M
ARE ARGONAUT RESOURCES NL 0.008 13.77M
HWK HAWKSTONE MINING LTD 0.008 7.45M
RMI RESOURCE MINING CORP LTD 0.008 2.37M
RAN RANGE INTERNATIONAL LTD 0.008 2.89M
TKL TRAKA RESOURCES LTD 0.008 3.20M
LPD LEPIDICO LTD 0.007 36.30M
IXR IONIC RARE EARTHS LTD 0.007 15.13M
COY COPPERMOLY LTD 0.007 14.89M
PUR PURSUIT MINERALS LTD 0.007 2.47M
RDS REDSTONE RESOURCES LTD 0.007 3.32M
CMD CASSIUS MINING LTD 0.007 2.01M
KGM KALNORTH GOLD MINES LTD 0.007 6.26M
LSA LACHLAN STAR LTD 0.007 3.77M
CNJ CONICO LTD 0.007 2.69M
GMR GOLDEN RIM RESOURCES LTD 0.007 9.03M
BAT BATTERY MINERALS LTD 0.007 9.23M
RAG RAGNAR METALS LTD 0.006 1.88M
RBR RBR GROUP LTD 0.006 5.31M
SYA SAYONA MINING LTD 0.006 14.81M
MSR MANAS RESOUCES LTD 0.006 15.86M
STM SUNSTONE METALS LTD 0.006 13.26M
KMT KOPORE METALS LTD 0.006 3.86M
RIM RIMFIRE PACIFIC MINING NL 0.006 9.51M
PMY PACIFICO MINERALS LTD 0.006 17.33M
DRE DREADNOUGHT RESOURCES LTD 0.005 11.25M
SPQ SUPERIOR RESOURCES LTD 0.005 4.78M
WRM WHITE ROCK MINERALS LTD 0.005 11.76M
DCX DISCOVEX RESOURCES LTD 0.005 4.82M
TYX TYRANNA RESOURCES LTD 0.005 4.47M
TMX TERRAIN MINERALS LTD 0.005 3.62M
EFE EASTERN IRON LTD 0.005 2.06M
AZI ALTA ZINC LTD 0.005 11.01M
CTO CITIGOLD CORP LTD 0.005 13.01M
HNR HANNANS LTD 0.005 9.94M
ACS ACCENT RESOURCES NL 0.005 905.00k
SHK STONE RESOURCES AUSTRALIA LT 0.005 4.18M
RDN RAIDEN RESOURCES LTD 0.005 2.16M
ELT ELEMENTOS LTD 0.004 10.19M
AAJ ARUMA RESOURCES LTD 0.004 2.46M
LNY LANEWAY RESOURCES LTD 0.004 14.88M
SHH SHREE MINERALS LTD 0.004 3.04M
LRS LATIN RESOURCES LTD 0.004 1.46M
ADV ARDIDEN LTD 0.004 7.15M
SER STRATEGIC ENERGY RESOURCES 0.004 4.75M
ENV ENOVA MINING LTD 0.004 6.77M
LML LINCOLN MINERALS LTD 0.004 2.87M
RLC REEDY LAGOON CORP LTD 0.004 1.61M
RNX RENEGADE EXPLORATION LTD 0.004 2.49M
SI6 SIX SIGMA METALS LTD 0.004 2.26M
SRN SUREFIRE RESOURCES NL 0.004 2.20M
AVW AVIRA RESOURCES LTD 0.003 3.38M
DDD 3D RESOURCES LTD 0.003 9.93M
DHR DARK HORSE RESOURCES LTD 0.003 7.48M
CZL CONSOLIDATED ZINC LTD 0.003 6.90M
CAD CAENEUS MINERALS LTD 0.003 7.00M
CAV CARNAVALE RESOURCES LTD 0.003 4.49M
CFE CAPE LAMBERT RESOURCES LTD 0.003 5.21M
BSM BASS METALS LTD 0.003 9.63M
BMG BMG RESOURCES LTD 0.003 2.01M
VAL VALOR RESOURCES LTD 0.003 3.84M
SBR SABRE RESOURCES LTD 0.003 2.57M
RMX RED MOUNTAIN MINING LTD 0.003 2.81M
AOA AUSMON RESOURCES LTD 0.002 1.58M
OAR OAKDALERESOURCES LTD 0.002 2.80M
CZN CORAZON MINING LTD 0.002 6.02M
AYM AUSTRALIA UNITED MINING LTD 0.002 3.69M
LCY LEGACY IRON ORE LTD 0.002 12.49M
GLA GLADIATOR RESOURCES LTD 0.002 2.00M
XTC XANTIPPE RESOURCES LTD 0.002 8.04M
MGT MAGNETITE MINES LTD 0.002 5.62M
PNN PEPINNINI LITHIUM LTD 0.002 3.00M
MLS METALS AUSTRALIA LTD 0.002 6.41M
MTB MOUNT BURGESS MINING NL 0.002 1.06M
ARO ASTRO RESOURCES NL 0.002 2.54M
SMI SANTANA MINERALS LTD 0.002 5.37M
CLZ CLASSIC MINERALS LTD 0.002 16.36M
DTR DATELINE RESOURCES LTD 0.002 16.42M
ANL AMANI GOLD LTD 0.002 10.25M
ICG INCA MINERALS LTD 0.001 4.06M
APG AUSTPAC RESOURCES NL 0.001 2.91M
ANW AUS TIN MINING LTD 0.001 2.83M
MNB MINBOS RESOURCES LTD 0.001 5.65M
MRD MOUNT RIDLEY MINES LTD 0.001 2.68M
VIC VICTORY MINES LTD 0.001 3.13M

 

“There’s a lot of well-meaning companies who are flailing around below a cent or below 3 or 4c,” Finch noted.

“All they can do is raise capital at discounted rates because the brokers won’t do it any other way, and that means ASX fees go up because they are related to the number of shares on issue.

“So eventually they’re being burnt off. They’re eventually raising capital just to pay the listing fees.”

In the past year, 42 resources companies have been delisted from the ASX, 57 per cent (24) of which were kicked off for reasons including failing to meet listing requirements and failing to pay listing fees.

The SSX, however, only requires a minimum IPO issue price of 5c, net tangible assets of $2m or a market cap of $2m, and a spread of 50 security holders each having a holding of at least $2,000 – with 25 per cent of those shareholders being unaffiliated.

Torque Metals has spent the past three months investigating a listing on an alternative exchange and has now launched a $2-2.5m IPO priced at 10c per share to list on the SSX.

The company is scheduled to make its debut on July 16 under the ticker 8TM, while China Magnesium — which plans to rebrand as Sovran White International — is still waiting on a potential listing date.

“We’ve been working together for two to three months now in order to get this meaningfully away so that the juniors, the ones over my shoulder that are lined up to do IPOs … can see there is a way through instead of battering your head against the ASX brick wall,” Finch said.

Torque Metals only released its prospectus last week but has already achieved the minimum spread.

 

No problem with liquidity

Finch says there also isn’t the issue of lack of liquidity (a high volume of activity in the market) that you would typically find with a smaller exchange.

The SSX is affiliated with London-headquartered CMC Markets, the second biggest trading platform in the world.

The exchange also utilises the ANZ Share Trading platform, including E*TRADE.

“The SSX actually has some 550,000 investors that will be looking at and trading your stock,” Finch noted.

There is also greater leverage to the upside for investors because of the lower entry price.

“You can list on the Sydney Stock Exchange for as little as a 5c stock value,” Finch said.

“For instance, we’re actually listing at 10c, not the insistent 20c that the ASX would force you to do, which means there is more leverage for the investor.

“It’s easy for them to make 10 per cent to go up to 11c than it is to go from 20c to 22c on the ASX. The 20c minimum has been a real problem for the last five years for juniors to get onto the market, whether it be a backdoor listing or whatever.

“I believe this is the beginning of a new era particularly for junior resource companies who want to get capital.”