Mining

Listing Requirements: From Junior Explorer to Global Mining Company

Published

2 years ago

February 10, 2021

Nicholas LePan

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 1	TSXV 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:

Gain exposure and access to more capital
Help in improving a company’s structure of corporate governance
Attract more and better talent
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.

	NASDAQ	NYSE
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 $75,000,000	n/a
Market Value of Public Float	$3,000,000 to $20,000,000	$100,000,000 or $40,000,000 (if IPO)
Stockholders Equity	$4,000,000	No more than $60,000,000
Minimum Share Price	$2 to $3	$4
Operating History	0 to 2 years	n/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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Energy

Visualizing the Uranium Mining Industry in 3 Charts

These visuals highlight the uranium mining industry and its output, as well as the trajectory of nuclear energy from 1960 to today.

Creator Program

Published

1 week ago

May 26, 2023

Pallavi Rao

When uranium was discovered in 1789 by Martin Heinrich Klaproth, it’s likely the German chemist didn’t know how important the element would become to human life.

Used minimally in glazing and ceramics, uranium was originally mined as a byproduct of producing radium until the late 1930s. However, the discovery of nuclear fission, and the potential promise of nuclear power, changed everything.

What’s the current state of the uranium mining industry? This series of charts from Truman Du highlights production and the use of uranium using 2021 data from the World Nuclear Association (WNA) and Our World in Data.

Who are the Biggest Uranium Miners in the World?

Most of the world’s biggest uranium suppliers are based in countries with the largest uranium deposits, like Australia, Kazakhstan, and Canada.

The largest of these companies is Kazatomprom, a Kazakhstani state-owned company that produced 25% of the world’s new uranium supply in 2021.

A donut chart showing the biggest uranium mining companies and the percentage they contribute to the world's supply of uranium.

As seen in the above chart, 94% of the roughly 48,000 tonnes of uranium mined globally in 2021 came from just 13 companies.

Rank	Company	2021 Uranium Production (tonnes)	Percent of Total
1	🇰🇿 Kazatomprom	11,858	25%
2	🇫🇷 Orano	4,541	9%
3	🇷🇺 Uranium One	4,514	9%
4	🇨🇦 Cameco	4,397	9%
5	🇨🇳 CGN	4,112	9%
6	🇺🇿 Navoi Mining	3,500	7%
7	🇨🇳 CNNC	3,562	7%
8	🇷🇺 ARMZ	2,635	5%
9	🇦🇺 General Atomics/Quasar	2,241	5%
10	🇦🇺 BHP	1,922	4%
11	🇬🇧 Energy Asia	900	2%
12	🇳🇪 Sopamin	809	2%
13	🇺🇦 VostGok	455	1%
14	Other	2,886	6%
Total		48,332	100%

France’s Orano, another state-owned company, was the world’s second largest producer of uranium at 4,541 tonnes.

Companies rounding out the top five all had similar uranium production numbers to Orano, each contributing around 9% of the global total. Those include Uranium One from Russia, Cameco from Canada, and CGN in China.

Where are the Largest Uranium Mines Found?

The majority of uranium deposits around the world are found in 16 countries with Australia, Kazakhstan, and Canada accounting for for nearly 40% of recoverable uranium reserves.

But having large reserves doesn’t necessarily translate to uranium production numbers. For example, though Australia has the biggest single deposit of uranium (Olympic Dam) and the largest reserves overall, the country ranks fourth in uranium supplied, coming in at 9%.

Here are the top 10 uranium mines in the world, accounting for 53% of the world’s supply.

A map of the largest mines and countries that undertake uranium mining.

Of the largest mines in the world, four are found in Kazakhstan. Altogether, uranium mined in Kazakhstan accounted for 45% of the world’s uranium supply in 2021.

Uranium Mine	Country	Main Owner	2021 Production
Cigar Lake	🇨🇦 Canada	Cameco/Orano	4,693t
Inkai 1-3	🇰🇿 Kazakhstan	Kazaktomprom/Cameco	3,449t
Husab	🇳🇦 Namibia	Swakop Uranium (CGN)	3,309t
Karatau (Budenovskoye 2)	🇰🇿 Kazakhstan	Uranium One/Kazatomprom	2,561t
Rössing	🇳🇦 Namibia	CNNC	2,444t
Four Mile	🇦🇺 Australia	Quasar	2,241t
SOMAIR	🇳🇪 Niger	Orano	1,996t
Olympic Dam	🇦🇺 Australia	BHP Billiton	1,922t
Central Mynkuduk	🇰🇿 Kazakhstan	Ortalyk	1,579t
Kharasan 1	🇰🇿 Kazakhstan	Kazatomprom/Uranium One	1,579t

Namibia, which has two of the five largest uranium mines in operation, is the second largest supplier of uranium by country, at 12%, followed by Canada at 10%.

Interestingly, the owners of these mines are not necessarily local. For example, France’s Orano operates mines in Canada and Niger. Russia’s Uranium One operates mines in Kazakhstan, the U.S., and Tanzania. China’s CGN owns mines in Namibia.

And despite the African continent holding a sizable amount of uranium reserves, no African company placed in the top 10 biggest companies by production. Sopamin from Niger was the highest ranked at #12 with 809 tonnes mined.

Uranium Mining and Nuclear Energy

Uranium mining has changed drastically since the first few nuclear power plants came online in the 1950s.

For 30 years, uranium production grew steadily due to both increasing demand for nuclear energy and expanding nuclear arsenals, eventually peaking at 69,692 tonnes mined in 1980 at the height of the Cold War.

Nuclear energy production (measured in terawatt-hours) also rose consistently until the 21st century, peaking in 2001 when it contributed nearly 7% to the world’s energy supply. But in the years following, it started to drop and flatline.

A chart plotting the total nuclear energy produced since 1950 and the percentage it contributes to the world's energy supply.

By 2021, nuclear energy had fallen to 4.3% of global energy production. Several nuclear accidents—Chernobyl, Three Mile Island, and Fukushima—contributed to turning sentiment against nuclear energy.

Year	Nuclear Energy Production	% of Total Energy
1965	72 TWh	0.2%
1966	98 TWh	0.2%
1967	116 TWh	0.2%
1968	148 TWh	0.3%
1969	175 TWh	0.3%
1970	224 TWh	0.4%
1971	311 TWh	0.5%
1972	432 TWh	0.7%
1973	579 TWh	0.9%
1974	756 TWh	1.1%
1975	1,049 TWh	1.6%
1976	1,228 TWh	1.7%
1977	1,528 TWh	2.1%
1978	1,776 TWh	2.3%
1979	1,847 TWh	2.4%
1980	2,020 TWh	2.6%
1981	2,386 TWh	3.1%
1982	2,588 TWh	3.4%
1983	2,933 TWh	3.7%
1984	3,560 TWh	4.3%
1985	4,225 TWh	5%
1986	4,525 TWh	5.3%
1987	4,922 TWh	5.5%
1988	5,366 TWh	5.8%
1989	5,519 TWh	5.8%
1990	5,676 TWh	5.9%
1991	5,948 TWh	6.2%
1992	5,993 TWh	6.2%
1993	6,199 TWh	6.4%
1994	6,316 TWh	6.4%
1995	6,590 TWh	6.5%
1996	6,829 TWh	6.6%
1997	6,782 TWh	6.5%
1998	6,899 TWh	6.5%
1999	7,162 TWh	6.7%
2000	7,323 TWh	6.6%
2001	7,481 TWh	6.7%
2002	7,552 TWh	6.6%
2003	7,351 TWh	6.2%
2004	7,636 TWh	6.2%
2005	7,608 TWh	6%
2006	7,654 TWh	5.8%
2007	7,452 TWh	5.5%
2008	7,382 TWh	5.4%
2009	7,233 TWh	5.4%
2010	7,374 TWh	5.2%
2011	7,022 TWh	4.9%
2012	6,501 TWh	4.4%
2013	6,513 TWh	4.4%
2014	6,607 TWh	4.4%
2015	6,656 TWh	4.4%
2016	6,715 TWh	4.3%
2017	6,735 TWh	4.3%
2018	6,856 TWh	4.2%
2019	7,073 TWh	4.3%
2020	6,789 TWh	4.3%
2021	7,031 TWh	4.3%

More recently, a return to nuclear energy has gained some support as countries push for transitions to cleaner energy, since nuclear power generates no direct carbon emissions.

What’s Next for Nuclear Energy?

Nuclear remains one of the least harmful sources of energy, and some countries are pursuing advancements in nuclear tech to fight climate change.

Small, modular nuclear reactors are one of the current proposed solutions to both bring down costs and reduce construction time of nuclear power plants. The benefits include smaller capital investments and location flexibility by trading off energy generation capacity.

With countries having to deal with aging nuclear reactors and climate change at the same time, replacements need to be considered. Will they come in the form of new nuclear power and uranium mining, or alternative sources of energy?