Toronto’s mining sector, once a global leader, is facing challenges as exploration companies exit Canada, impacting the Toronto Stock Exchange’s (TSX) dominance.
The sector’s traditional model, which involved prospectors attracting investors and established producers acquiring them, is under strain, reported Bloomberg.
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The consolidation of the industry has reduced head offices and listings, making it harder for companies to attract investors.
In the past nine months, three companies – Lithium Argentina, Solaris Resources and Falcon Energy Materials – have relocated their headquarters from Canada.
Cornish Metals and Almonty Industries are planning similar moves, the report said.
Barrick Gold, the world’s second-largest miner, has also considered relocating to the US.
Solaris Resources moved to Ecuador after cancelling a financing deal with Zijin Mining Group.
Falcon Energy relocated to Abu Dhabi after failing to secure a $12.7m (92.39m yuan) investment from China’s Carbon ONE New Energy Group.
Lithium Argentina moved its headquarters to Switzerland in January, citing strategic and commercial advantages.
The TSX and TSX Venture Exchange currently host 1,097 mining listings, down from 1,531 in 2010.
This decline is partly due to competition from stock markets in London, Sydney and New York.
Allied Gold is applying for a listing on the New York Stock Exchange, joining other gold miners with dual Canadian and US listings.
New York’s status as a global hub for gold equities has grown, with major deals creating North American titans like Newmont and Barrick.
According to TMX Group, Toronto’s declining mining listings are due to consolidation and shifting focus, with mergers and acquisitions accounting for half of the delistings.
Furthermore, a lack of initial public offerings (IPOs) has contributed to the decline, with no significant mining IPOs in the past year.
The financing drought dates back to the early 2010s commodities boom, which left miners with heavy debts and shareholders with losses.
Gold Royalty CEO David Garofalo noted the sector’s overspending on exploration and expansions, which has led to “massive amounts of debts on balance sheets, and significant cost escalation”.
