Listing Requirements: From Junior Explorer to Global Mining Company
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Listing Requirements: From Junior Explorer to Global Mining Company

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Listing Requirements for a Mining Company

Making it to the Top: Listing Requirements From Junior Explorer to Global Mining Company

Only a few companies ever meet the listing requirements of global stock exchanges, but the effort to list can be worth it.

In 2019, Newmont produced 6.3 million ounces of gold and earned a net income of $2.9B and returned $1.4B to shareholders in dividends.

This infographic from Corvus Gold looks at the requirements and stages a mining company could face along its journey from a mineral prospect to a global mining company.

The Odds of Discovery

There are 510 million km2 (196,900,000 square miles) on the surface of the Earth and the crust is on average 40 kilometers thick (24 miles). Somewhere in there lie the next deposits of gold.

Mineral exploration companies use drill bits that range in diameter from 76-320 millimeters to explore the subsurface. The deepest drill hole is the Kola Superdeep Borehole which measured 12.2 kilometers (7.6 miles). However, most mineral exploration companies rarely drill longer than a kilometer.

Finding a gold deposit, let alone an economic one is akin to using a hair to find a needle in the proverbial haystack. To mitigate this, a typical junior mining company improves its odds by building a portfolio of properties that show potential through hints of gold and other minerals revealed from surface sampling, aerial magnetic surveys, and historic data.

Then, to dig even deeper, a company can raise capital privately for the properties that show potential. Valuations of these mineral properties are largely subjective and difficult to establish. But if the company would like to raise further capital for more expensive exploration, it can tap into stock exchanges.

Canada’s Toronto (TSX) and Venture Stock Exchanges (TSXV) sit at the center of global mining finance. Over the past five years, companies listed on TSX and TSXV completed 53% of all global mining financings, amounting to $44 billion through 6,500 transactions.

Even an idiot can make a great discovery and drive a stock from three cents to three bucks, and those guys wouldn’t get funded privately. It has to be public.
– Ross Beaty, Founder, Chairman Equinox Gold

Risk Capital: TSX-V Listing Requirements

In 2020, there were 606 companies on the TSXV that have a gold property, or a property that showed potential to host a gold deposit. These companies met a minimum set of requirements to access public markets for further funding.

At this stage, a listed mining company will deploy capital to conduct geological sampling and drilling to produce technical studies that could improve the confidence of the presence of a mineable gold deposit.

If this round of work results in an improved understanding of a gold property, a company can move from Tier 2 to Tier 1 on the TSXV, allowing it to raise further capital to increase the scope of technical and economic studies.

TSX Venture Listing Requirements:

 TSXV Tier 1TSXV Tier 2
Property Requirements
  • Material interest in a Tier 1 property*
  • Significant interest in a qualifying property or, a right to earn a significant interest in a qualifying property

  • Evidence of $100,000 of exploration expenditures on the property in the past three years
Recommended Work Program
  • $500,000
  • $100,000 to $200,000
Working Capital
  • Business plan or work program

  • $200,000 in unallocated funds
  • Adequate working capital to carry out work program or execute business plan for 12 months following listing

  • $100,000 in unallocated funds
Net Tangible Assets
  • $2,000,000
  • No requirement
Capital Structure
  • Public float of 1,000,000 shares

  • 250 public shareholders amounting to 20% of issued and outstanding shares
  • Public float of 500,000 shares

  • 200 public shareholders each holding a board lot and having no resale restrictions on their shares

  • 20% of issued and outstanding shares in the hands of public shareholders
Management and Board
  • Management and board with technical and adequate experience in mining
Sponsorship
  • Sponsor may not be required
Other Criteria
  • A geological report recommending work program
Source: TMX. Figures are in CDN. *Property has a current inferred mineral resource, NI 43-101 compliant

At this point, a company should have a good understanding of the costs and methods to produce a profitable operation or the value of a resource. However, early investors take their profits and new ones are needed to take a mineral property to a mining operation.

One drill hole changes the game. It’s very hard to decide who gets to make it and who doesn’t. It’s a big gate, and yet very few make it through. But you have to let them try.
– Lukas Lundin, Chairman, Lundin Group

Financing Growth: TSX Listing Requirements

To develop and construct a mine, mining companies require larger amounts for development and construction, which requires a different class of investor and stricter requirements.

In 2020, there were 133 gold companies listed on the Toronto Stock Exchange, whose primary metal production is gold and/or own a gold property. These companies meet or exceed a set of listing requirements set out by the exchange.

The TSX has three categories of listing for mining issuers: TSX Exempt Issuers, TSX Non-Exempt Producer and TSX Non-Exempt Exploration and Development Stage. These requirements of these categories reflect the stage of development of the issuer at the time of listing. Exempt issuers are more advanced and so subject to less stringent reporting requirements.

TSX Listing Requirements:

 TSX non-exempt (Exploration & Development)TSX non-exempt (Producer)TSX exempt
Property Requirements
  • Advanced property detailed in technical report

  • Minimum 50% ownership
  • 3 years proven and probable reserves with no production decision made
  • 3 years proven and probable reserves
Recommended Work Program
  • $750,000
  • Bringing the mine into production
  • Commercial level mining operations
Working Capital and Financial Resources
  • Minimum $2,000,000
  • Sufficient funds to bring the mine into commercial production
  • Adequate working capital for all budgeted expenditures
  • Adequate working capital to carry on the business
Net Tangible Assets
  • $3,000,000
  • $4,000,000

  • Evidence indicating profitability
  • $7,500,000 net tangible assets; pre-tax profitability from ongoing operations in last fiscal year

  • Pre-tax cash flow of $700,000 in last fiscal year and average pre-tax cash flow of $500,000 for past two fiscal years
Management and Boards
  • Management, including board of directors with adequate experience and technical expertise relevant to the mining projects as well as adequate public company experience
  • At least two independent directors, a CEO, a Chief Financial Officer who is not also the CEO, and a Corporate Secretary
Distribution, Market Capitalization and Public Float
  • Minimum 1,000,000 freely tradeable shares with market value of $4,000,000
  • At least 300 public holders, each with one board lot or more
Sponsorship
  • Required
  • Not Required
Other Criteria
  • Management-prepared 18 month projection of sources and uses of funds detailing all expenditures and signed by CFO
  • Up-to-date, comprehensive technical report prepared by independent qualified person
Source: TMX. Figures are in CDN.

At this stage, bankers and lawyers set up the financing of a project based on geological and economic studies. Good financing terms can enhance the potential value of a mineral deposit and attract investors.

But sometimes, just this one listing is not enough to allow a company or project to meet its full potential.

Expanding Shareholders: NASDAQ and NYSE Listing Requirements

Companies that require more capital or to meet corporate governance rules in the countries they work in can seek a listing on additional stock exchange markets outside of their home countries. There are several benefits of additional listings:

  1. Gain exposure and access to more capital
  2. Help in improving a company’s structure of corporate governance
  3. Attract more and better talent
  4. Improves the reputation of a company

The NASDAQ and New York Stock Exchange (NYSE) can improve access to the American market. There are only 76 gold mining companies listed on the NASDAQ and NYSE exchanges.

 NASDAQNYSE
Pre-tax income$0 to $750,000$2,000,000
Market Capitalization$0 to $75,000,000$2,000,000
Total Assets and Revenue$0 to $75,000,000n/a
Market Value of Public Float$3,000,000 to $20,000,000$100,000,000 or $40,000,000 (if IPO)
Stockholders Equity$4,000,000No more than $60,000,000
Minimum Share Price$2 to $3$4
Operating History0 to 2 yearsn/a
Source: NASDAQ, NYSE. Figures are in USD

Increased trading, world-class investors, and a well-run operation can deliver a mining company a lot of prestige and generate significant returns.

Ultimately, the continued success of the company will rely on its ability to maintain production and continue to deliver gold to the market. This all comes back to a company’s ability to find, develop, and exploit new gold deposits.

I just want to remind you that the real wealth in the mining industry is generated by FINDING something.
– Robert Friedland, Executive Chairman, Ivanhoe Mines

Building Mineral Wealth to Last

The project development timeline and mine lifecycle is a very long one. It can take decades to move from discovery to production. Each stage requires different amounts of capital and investors.

The odds of building a mine are stacked against a junior mining company—but for the few that grow through the listing process requirements, they can become the next great investment.

A mineral discovery is rare, but a successful gold mining company is even rarer.

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Technology

Visualizing the Critical Metals in a Smartphone

Smartphones can contain ~80% of the stable elements on the periodic table. This graphic details the critical metals you carry in your pocket.

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Visualizing the Critical Metals in a Smartphone

In an increasingly connected world, smartphones have become an inseparable part of our lives.

Over 60% of the world’s population owns a mobile phone and smartphone adoption continues to rise in developing countries around the world.

While each brand has its own mix of components, whether it’s a Samsung or an iPhone, most smartphones can carry roughly 80% of the stable elements on the periodic table.

But some of the vital metals to build these devices are considered at risk due to geological scarcity, geopolitical issues, and other factors.

Smartphone PartCritical Metal
Touch Screen indium
Displaylanthanum; gadolinium; praseodymium; europium; terbium; dysprosium
Electronicsnickel, gallium, tantalum
Casingnickel, magnesium
Battery lithium, nickel, cobalt
Microphone, speakers, vibration unit nickel, praseodymium, neodymium, gadolinium, terbium, dysprosium

What’s in Your Pocket?

This infographic based on data from the University of Birmingham details all the critical metals that you carry in your pocket with your smartphone.

1. Touch Screen

Screens are made up of multiple layers of glass and plastic, coated with a conductor material called indium which is highly conductive and transparent.

Indium responds when contacted by another electrical conductor, like our fingers.

When we touch the screen, an electric circuit is completed where the finger makes contact with the screen, changing the electrical charge at this location. The device registers this electrical charge as a “touch event”, then prompting a response.

2. Display

Smartphones screens display images on a liquid crystal display (LCD). Just like in most TVs and computer monitors, a phone LCD uses an electrical current to adjust the color of each pixel.

Several rare earth elements are used to produce the colors on screen.

3. Electronics

Smartphones employ multiple antenna systems, such as Bluetooth, GPS, and WiFi.

The distance between these antenna systems is usually small making it extremely difficult to achieve flawless performance. Capacitors made of the rare, hard, blue-gray metal tantalum are used for filtering and frequency tuning.

Nickel is also used in capacitors and in mobile phone electrical connections. Another silvery metal, gallium, is used in semiconductors.

4. Microphone, Speakers, Vibration Unit

Nickel is used in the microphone diaphragm (that vibrates in response to sound waves).

Alloys containing rare earths neodymium, praseodymium and gadolinium are used in the magnets contained in the speaker and microphone. Neodymium, terbium and dysprosium are also used in the vibration unit.

5. Casing

There are many materials used to make phone cases, such as plastic, aluminum, carbon fiber, and even gold. Commonly, the cases have nickel to reduce electromagnetic interference (EMI) and magnesium alloys for EMI shielding.

6. Battery

Unless you bought your smartphone a decade ago, your device most likely carries a lithium-ion battery, which is charged and discharged by lithium ions moving between the negative (anode) and positive (cathode) electrodes.

What’s Next?

Smartphones will naturally evolve as consumers look for ever-more useful features. Foldable phones, 5G technology with higher download speeds, and extra cameras are just a few of the changes expected.

As technology continues to improve, so will the demand for the metals necessary for the next generation of smartphones.

This post was originally featured on Elements

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Mining

Silver Through the Ages: The Uses of Silver Over Time

The uses of silver span various industries, from renewable energy to jewelry. See how the uses of silver have evolved in this infographic.

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uses of silver

Silver is one of the most versatile metals on Earth, with a unique combination of uses both as a precious and industrial metal.

Today, silver’s uses span many modern technologies, including solar panels, electric vehicles, and 5G devices. However, the uses of silver in currency, medicine, art, and jewelry have helped advance civilization, trade, and technology for thousands of years.

The Uses of Silver Over Time

The below infographic from Blackrock Silver takes us on a journey of silver’s uses through time, from the past to the future.

3,000 BC – The Middle Ages

The earliest accounts of silver can be traced to 3,000 BC in modern-day Turkey, where its mining spurred trade in the ancient Aegean and Mediterranean seas. Traders and merchants would use hacksilver—rough-cut pieces of silver—as a medium of exchange for goods and services.

Around 1,200 BC, the Ancient Greeks began refining and minting silver coins from the rich deposits found in the mines of Laurion just outside Athens. By 100 BC, modern-day Spain became the center of silver mining for the Roman Empire while silver bullion traveled along the Asian spice trade routes. By the late 1400s, Spain brought its affinity for silver to the New World where it uncovered the largest deposits of silver in history in the dusty hills of Bolivia.

Besides the uses of silver in commerce, people also recognized silver’s ability to fight bacteria. For instance, wine and food containers were often made out of silver to prevent spoilage. In addition, during breakouts of the Bubonic plague in medieval and renaissance Europe, people ate and drank with silver utensils to protect themselves from disease.

The 1800s – 2000s

New medicinal uses of silver came to light in the 19th and 20th centuries. Surgeons stitched post-operative wounds with silver sutures to reduce inflammation. In the early 1900s, doctors prescribed silver nitrate eyedrops to prevent conjunctivitis in newborn babies. Furthermore, in the 1960s, NASA developed a water purifier that dispensed silver ions to kill bacteria and purify water on its spacecraft.

The Industrial Revolution drove the onset of silver’s industrial applications. Thanks to its high light sensitivity and reflectivity, it became a key ingredient in photographic films, windows, and mirrors. Even today, skyscraper windows are often coated with silver to reflect sunlight and keep interior spaces cool.

The 2000s – Present

The uses of silver have come a long way since hacksilver and utensils, evolving with time and technology.

Silver is the most electrically conductive metal, making it a natural choice for electronic devices. Almost every electronic device with a switch or button contains silver, from smartphones to electric vehicles. Solar panels also utilize silver as a conductive layer in photovoltaic cells to transport and store electricity efficiently.

In addition, it has several medicinal applications that range from treating burn wounds and ulcers to eliminating bacteria in air conditioning systems and clothes.

Silver for the Future

Silver has always been useful to industries and technologies due to its unique properties, from its antibacterial nature to high electrical conductivity. Today, silver is critical for the next generation of renewable energy technologies.

For every age, silver proves its value.

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