Graham Dallas, Head of Business Development, EMEA,


"In the first nine months of 2021, our African mining issuers raised over C$1 billion – which is more than they raised in total in 2020."

How important is mining to TSX and TSXV EMEA?

Though I am responsible for business development (primarily new listings) across Europe, the Middle East, and Africa, the mining business is mostly concentrated in Africa, where we have over 100 issuers with 300 plus projects in 34 different jurisdictions. Our listed issuers have raised over 37% of all mining money raised by public companies anywhere in the world in the past five years.

How have TSX and TSXV performed in 2021?

Despite the challenges, we can say this has been a terrific year for TSX in terms of the number of transactions, registering new listings, and equity raised. These successes are a result of the sophistication of capital markets aided by communications technologies, but also a reflection of the strong performance of mining companies. The first half of 2021 was record-setting, with the strongest IPO market in the last 15 years and the best half-year in our history for equity financing in both of our equity markets. In total, we saw 35 corporate IPOs on both TSX and TSXV.

What is driving M&A activity in the mining industry?

I can identify two main factors driving M&A in Africa and beyond: The first is growing a company’s scale to appeal to a wider investor universe, specifically to generalist investors. It can be argued that there is a gap in the market for large, listed specialist mining companies (focused on precious metals, but probably also other minerals) with sufficient scale and liquidity to attract professional fund managers. Companies like BHP, Rio Tinto, or Anglo American are big, but they are diversified and exist in different investor realms. I suspect this is what drives companies like Endeavour or Kinross to bulk up their business to a market cap where a professional fund manager could target them. Only specialized funds will deploy small investments into small companies, so generalist, big-money companies require scale.

The second factor is ESG. This broad term that has come to mean different things can simply be defined in a mining context as operating mines in a credibly sustainable way. However, this is more challenging for smaller companies, who are limited to the day-to-day dollar spends, while larger miners can afford both financial and human capital to enable sustainable practices – for instance, by rolling out different carbon measurement technologies. Larger companies will also be able to sell their assets easier to ESG-mandated funds. These factors, I believe, are driving further consolidation in the market. It will be interesting to note the impact of ESG investments in mining, which is more diversified in terms of scale, geography and products compared to the O&G industry.

How do you think equity markets currently value mining companies? Are there any commodities or jurisdictions getting more attention in Africa?

In the first nine months of 2021, our African mining issuers raised over C$1 billion – which is more than they raised in total in 2020 (C$761 million). The same trend appears globally: by September this year, the global mining industry had raised C$7.9 billion on TSX and TSXV, almost the equivalent of all 2020 raisings. I stay optimistic that the market is in very good shape and well suited to allocate capital to the exploration and development sector.

Narrowing down to jurisdictional level, as a rule, mining companies love operating in a safe country, but every mining executive I have spoken to has also said that political risk comes second to geological risk. African issuers on TSX and TSXV predominantly operate in Burkina Faso and Mali, followed by Namibia, Ivory Coast and South Africa.

Trends come and go for different commodities, and today it appears that industrial metals involved in the transport and industrial revolution, like copper, nickel, or aluminium, are getting more traction, but this is a trend affecting large operations more so than juniors. In the gold space, the price has been steady.

Do you have a final message to share with our international audience?

Mining is key to TSX and TSXV just as our two stock exchanges are key to the global mining industry. Mining and the Toronto markets are well-entrenched into each other. Mining is understood in Canada better than in any other major economy, and this is because in Toronto, the exchange, regulators, bankers, analysts, and professional investors all show an honest appreciation of mining.