By Jeff Lewis and Helen Reid
TORONTO/JOHANNESBURG, Aug 18 (Reuters) - Gold miners in Canada keen to tap new investors are eyeing secondary listings in London and New York, underscoring pent-up demand for the precious metal from generalist funds.
Gold prices XAU= have soared 32% this year as central banks dial up stimulus measures in response to the COVID-19 pandemic. has fueled a cash surge for miners, who have hiked dividends and pledged cost discipline to broaden their appeal beyond a shrinking pool of resource-only investors.
A listing in New York or London opens the door for miners' shares to be included in many more exchange-traded funds (ETFs) - guaranteeing substantial liquidity and broadening their investor basis further.
"There is a lot of dumb money sloshing around in London in the mining space, and the gold miners want to soak it up," said Henry Steel, London-based portfolio manager at Odey Asset Management, which manages $4.9 billion.
That would help plug a large gap https://www.reuters.com/article/us-randgold-rsrcs-m-a-listing/randgolds-hook-up-with-barrick-to-leave-large-void-in-london-market-idUSKCN1MC11L in the London market left by Barrick Gold's ABX.TO GOLD.N 2018 tie-up with Randgold Resources (LON: RRS ), which had been listed in London. Mining company listings in London have slowed in recent years.
Nearly half of global public mining companies are listed on the Toronto Stock Exchange and TSX Venture Exchange, owner TMX Group X.TO said.
But the number of mining IPOs and new issues in Toronto has fallen since 2018, indicating the market is losing some luster.
In July, Yamana said it had applied for a secondary listing on the London Stock Exchange (LSE), which it said lacked sizeable pure-play gold producers with annual production of 1 million ounces or more.
There is "a good hand-to-glove fit of what is being looked for by investors and what we can offer," said Peter Marrone, executive chairman of Yamana, in an interview.
Toronto-listed Endeavour said it would decide by year-end whether to pursue a secondary listing in either London or New York after completing its acquisition of rival Semafo.
The company's management is London-based, making it a "natural landing for us," Chief Executive Sébastien de Montessus said on a call.
London investors have more risk appetite and are more comfortable with the complexities of African mining jurisdictions than in Toronto or New York, said a Johannesburg-based banker. Endeavour mines in Mali and Burkina Faso.
"That's an unquantifiable aspect that I think is driving London," he said, declining to be named.
Greenland-focused gold exploration firm AEX Gold listed on AIM, the LSE's small company sub-market, on July 31. AEXG.L definitely room for more," said Paul Jourdan, CEO of Amati Global Investors in Edinburgh, which holds a 6.9% stake in AEX Gold.
"What AEX shows is that there is appetite in the London market, even for something early stage like that."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-Mining IPOs and new issues on the London marke - Interactive
https://tmsnrt.rs/3iICG6C GRAPHIC-Mining IPOs on the London market
https://tmsnrt.rs/3h6jjnM GRAPHIC-Toronto losing its shine for mining companies
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.