The mining-friendly Toronto stock exchange is underpinning several New Zealand resource companies. Two are seeking listings and a third has recently recapitalised by almost $3 million, albeit in private placements.
The Toronto exchange is renowned for supporting new and higher-risk mining ventures, and even New Zealand's largest gold producer Oceana Gold, with its Macraes mine in East Otago, maintains the TSX as its principal of three listings and goes there first for recapitalisation.
Canada has hosted numerous historic gold rushes and attracts more resource and energy investors who better understand the high-risk sector because of Canada's widespread oil, gas and mineral exploration and production facilities.
The latest New Zealand applicant for a TSX listing is phosphate explorer Chatham Rock Phosphate, which has again deferred plans to raise capital in a initial public offering (IPO), but will persevere with listing on the Toronto stock exchange anyway.
Managing director Chris Castle said in a statement Chatham Rock had the sufficient number of shareholders required to dual-list on several overseas stock exchanges, without undertaking an IPO, and would seek to dual-list its shares on the Toronto Stock Exchange's secondary (venture) board.
"Adverse market conditions still prevailing in overseas markets continue to delay the company's earlier decision to undertake an IPO," Mr Castle said, echoing a similar decision last year to defer IPO plans.
Chatham has a two-year offshore prospecting permit covering 4726sq km over the central Chatham Rise, 450km east of Christchurch, with right of renewal for prospecting or to seek a mining permit. It hopes to mine seabed phosphate by 2014.
Mr Castle said the dual listing should make it easier to continue to source funding through private placements in the short term, but the company would undertake an IPO when market conditions improved.
In late June, boutique Otago gold producer Glass Earth Gold clinched $2.95 million funding from private equity placements in Canada, enabling it to refinance a $4 million buy-out of its former joint venture partner.
The company has three Maniototo gold recovery units, one in the Ida Valley and two in the Manuherikia valley.
The partner buy-out was $2 million in shares and $2 million cash, the latter being 25 monthly payments of $80,000 from proceeds from the three alluvial gold diggings in the Maniototo.
Glass Earth sold 11.78 million units at C20c, which each carry a warrant to purchase an ordinary share at C35c during the next two years. The company has forecast gold revenue for the remainder of the year of up to $2 million and if production targets are met, revenue in 2013 is estimated at $6 million.
In mid-June, dual-listed southern coal bed methane gas explorer L and M Energy was looking to list on the Toronto stock exchange, in preparation to accelerating exploration drilling in Taranaki during the next 18 months.
L and M, in its various forms and subsidiary companies, had spent almost $40 million in recent years exploring a variety of energy resources in the lower South Island, including methane gas deposits around coal deposits near Kaitangata and Ohai. It is listed on both the New Zealand and Australian exchanges.
Toronto Stock Exchange
• The TMX Group owns and operates the Toronto Stock Exchange (TSX), which was established in 1852, and the secondary TSX Venture Exchange.
• For its full-year 2011 to December, TMX Group booked an 8% increase in revenue to $C673.5 million ($NZ845.7 million), from exchanges it operates, but first quarter results to March this year are reflecting global market volatility.
• On the TSX, value of shares traded declined from $C418 billion to $C357 billion, with 1581 issuers listed, while the number of IPOs compared with the same quarter a year ago fell from 31 to 21.
• On the TSX Venture Exchange, the value of shares traded also declined, from $C17 billion to $C8.5 billion, with 2473 issuers listed. There were 55 new issuers listed compared with 48 a year ago.
• The TSX provides senior issuers with access to public equity, liquidity for existing and new investors and market exposure on a world-class market.
• For the public venture capital market, the TSX Venture Exchange provides access to growth capital for early-stage companies while offering investors a well-regulated market for venture investments.
• The TSX listed 10 new issuers in May 2012, down from 16 in April 2012 and from 15 in May 2011. Three of the new listings were from the mining sector.
• The TSX Venture Exchange had 20 new issuers in May 2012, which was ahead of both April 2012 and May 2011, when there were respectively 15 and 17 issuers. The new issuers included eight mining companies.
Source: TSX website
