As the Toronto Stock Exchange (TSX) cracked the 14,000 mark for the first time in nearly three years last week, Vancouver miners remained perplexed about what the market’s merger with the London Stock Exchange Group (LSEG) could mean for them.
One thing is certain though: junior mining companies remain steadfastly loyal to Toronto’s Venture Exchange, expressing little interest in London’s Alternative Investment Market (AIM).
Michael McPhie, president and CEO of the recently launched copper explorer Curis Resources (TSX-V:CUV), said his company is more interested in listing on New York or Hong Kong exchanges than London’s.
“I don’t think the AIM has performed to the level people had originally hoped in terms of the junior and mid-tier mining sector,” McPhie said. “The fact is we’re getting tremendous [investor] support out of Asia, and our company is primarily focused on North America.”
The approximate $7 billion merger between Toronto’s TMX Group and LSEG is being billed as a “merger of equals” that would create the No. 1 global listings venue for natural resources, mining, energy and clean technology.
The merger is subject to a federal review under the Investment Canada Act.
The Ontario Liberal government has expressed concern over the deal, but out west there’s less angst in the air.
Media sources reported last week that B.C. Finance Minister Colin Hansen called the merger an “opportunity.”
Michael Jones, a prevalent face in Vancouver’s junior mining scene and co-founder of Platinum Group Metals (TSX:PTM) and MAG Silver (TSX:MAG), believes the merger could generate more investor interest for Canadian mining companies.
“I think the LSE’s investment into the TSX and TSX Venture will naturally bring a larger amount of interest from European investors,” Jones told Business in Vancouver in a phone conversation during his business trip to Johannesburg, South Africa. “We see it already; as our companies have grown we’ve seen substantial support already from large-scale U.K. institutions. This is going to simply add to that profile.”
Like McPhie, Jones said he’s more interested in dual-listing his companies on U.S. stock exchanges.
But if the merger between the LSE and TSX is streamlined, Jones said it could create an interesting platform for Canadian mining companies. McPhie added that another concern is that the financial and analytical expertise in Toronto could shift to the U.K. if the merger were to go ahead.
“That’s a key consideration, what does it actually do? Does it enhance or dilute our expertise as a country and our ability to raise capital?”
Still, both McPhie and Jones agree that it’s too early to tell how the merger will affect the junior sector.
Said McPhie: “The devil is always in the details about what it really means.”