Canada Unearthed: TSX targets ASX companies for dual-listings in conviction mining juniors can prosper in Canada

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It’s become commonplace to hear in recent months that a dearth of liquidity for mining juniors on the TSX and TSX-V, especially in energy transition metals like lithium and rare earths, has them looking to Australia to chase funds and finance.

But the TSX has begun a renewed push into international markets, appointing an Australian BD head and laying down the welcome mat to international companies to dual list in Toronto.

With almost 75% of the C$4.3b in equity raised on the TSX and TSX-V in the March quarter concentrated in mining, along with 21 of their 55 new listings, the TSX’s top brass want to show the Canadian Dollar is warming to diggers and drillers.

There are almost 3500 companies listed on the Toronto exchange, the vast bulk located in Ontario and British Columbia. But there were 237 international companies with joint listings on the TSX as of March 31.

Of those 20 were in Australia, New Zealand and Papua New Guinea.

“If you look at all the mining capital raised around the world over the last five years the TSX and TSX Venture Exchange are about US$45 billion, Australia’s about $40 billion and the next biggest market for raising mining capital will be New York at US$10b,” TSX/TSX-V chief commercial officer Rob Peterman said.

“So between Australia and Canada, you’re getting access to the most amount of capital.

“As energy transition continues and critical minerals become part of supply chains, for more and more companies there’s going to be a greater need to finance and that ability for companies to tap into the strength of the Canadian market and the Australian market is something that we think will continue to grow.”

More to come

It is the first of two entreaties planned by bigwigs from Canada’s top stock exchange to liaise with Aussie companies and investors, with the TSX’s head of mining expected to return in around a month with Canadian investment bankers and lawyers in tow.

While anecdotally companies listed in Toronto have spoken of issues raising finance and maintaining liquidity, Peterman said numbers showed the amount of capital raised for mining equities on the TSX and ASX were similar last year.

“We definitely have heard from companies that in particular categories like lithium, there was a particularly high appetite in Australia. To me that’s just proof that the two markets can work well together,” Peterman said.

“If the Canadian market is a bit slower for raising capital, then you can look at Australia. But we know over time that pendulum will shift back and forth and that ability to access capital in both markets can benefit companies over the long term.

“We agree and we’ve heard that, particularly around lithium say over the last few years, there’s been a lot of appetite for Australian companies, but I think when you look at the numbers on paper the markets were about even in terms of finding capital raise, and if you look over a five-year period TSX raises slightly more capital than the ASX overall.”

Luke Allshorn, the head of BD for Australia and South-East Asia, said the TMX Group was especially keen to secure access for Canadian investors to junior ASX stocks with projects in the Americas, a cohort of around 100 companies on the ASX with a sub-$200 mil market cap.

“There’s about 50 of those companies in Canada and there are more companies sub-$200m listed on the ASX with their major projects in Canada than in Queensland,” Allshorn said.

“Clearly lithium around James Bay in Quebec and in Ontario is a big point. So they’re the kind of dialogues we’re starting to have. Traditionally South American companies in mining also list their companies on the TSX and TSX-V.

“There’s clearly a universe of companies who have their projects in the Americas who arguably will get a better hearing from North American investors because not only do they understand the commodity but they understand the geography better than maybe someone in Australia.”

Uranium run shifts investors’ focus to mining

Uranium’s recent run to US$90/lb has been a positive for the TSX as well, given the historic strength of the exchange in the yellowcake market.

The world’s richest uranium province is the Athabasca Basin in Saskatchewan, and Canadian based C$29 billion listed Cameco (TSX:CCO) is the world’s largest Western producer.

Precious metals is also a big focus area, with gold prices near record highs and silver bullion at levels not seen in around a decade.

“Definitely uranium has been the commodity that’s getting the most interest right now in the marketplace,” Peterman said.

“We have a traditional strength in precious metals, and I know a lot of the mining companies would like to see their stock prices moving with the gold price.

“Uranium has been active with financing and listings in the market, for sure. We haven’t seen as much on the precious metals side. Hopefully we’ll see some more financings picking up to go along with the higher gold prices.”

But Peterman says market awareness in energy transition metals is growing in Canada as well.

“We think it’s the driving theme in the markets right now. We’re … hosting lithium investor conferences with investment banks trying to build interest in the category,” he said.

“We also worked with S&P last year to launch an energy transition materials index.

“BlackRock has built an ETF on that index in Canada (iShares S&P/TSX Energy Transition Materials Index ETF (TSX:XETM)) but we’re also trying to bring investors index products as well.

“So investors can go both for directly investing in lithium companies or companies that are involved in the energy transition space, but also invest in tools like the energy transition index where they can get access to a larger portfolio of companies in the energy transition space — passive as well as active investment opportunities.”

TSX & TSXV Resources Winners & Losers

Here’s how Toronto-listed mining and exploration stocks performed last week:

Scroll or swipe to reveal tables. Click headings to sort. Best viewed on a laptop.

Stocks missing from these lists? Email [email protected]

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