Financing Opportunities for Mining Ventures and Going
Public with the TSX Venture CPC Program
Tim Babcock
Director, Listed Issuer Services
TSX Venture Exchange
1
Disclaimer
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© 2009 TMX Group Inc.
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Contents
1. Globally Competitive Exchanges
2. Experts in Mining
3. TSX Venture Exchange and the Capital Pool Company Program
3
TMX Group is a Multi-Asset Class Market Leader
Equities
Derivatives
(53% Ownership)
(19.9% Ownership)
Energy
Fixed Income
Data
(47% Ownership)
4
Toronto Stock Exchange and TSX Venture
Exchange
th
8largest
exchange
group
Based on domestic market cap of listed
issuers on TSX and TSXV (WFE, Dec 2008)
st
1
in North America
nd
2 globally
Based on number of listed issuers on TSX
and TSXV (WFE, Dec 2008)
5
th
7
largest
exchange
group
By equity capital raised (WFE, Dec 2008)
Unique Market Structure
2,262 companies
45 graduates in 2008
72 graduates in 2007
1,570 companies
TSX Venture Exchange
Toronto Stock Exchange
• Access to capital for earlier stage
companies or smaller financings
• Senior market for well established
businesses and management teams
with experience in public markets
• Total market cap of $17.0 Billion &
average market cap of $7.5MM
• Cost effective stepping stone for
international companies looking to list on
a quality North American market
• Exchange mandate to mentor
management of newly public companies
• Streamlined graduation to TSX when
senior market requirements are met
• 102 year history
6
• Total market cap of $1.3 Trillion &
average market cap of $815MM
• 32% of TSX issuers >$500M are
interlisted on a US exchange
• Access to larger, more international
institutional investors and greater
analyst coverage
• Globally visible specialized indices
• 156 year history
Investor Relations is key to success
The Equicom Group is a leading
Investor Relations consulting firm
and a trusted resource in the
capital markets.
Service Offerings
 IR strategy
 Financial media relations
 Broker relations
 Investor roadshows
 News releases and filings
(SEDAR)
www.equicomgroup.com
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Contents
1. Globally Competitive Exchanges
2. Experts in Mining
3. TSX Venture Exchange and the Capital Pool Company Program
8
More mining companies are listed on TMX equity
exchanges than any other market in the world
TOTAL NUMBER OF MINING ISSUERS
NUMBER OF NEW MINING LISTINGS IN 2008
138
1427
684
216
TSX
TSXV
9
ASX
LSEAIM
29
84
68
55
48
HKEx
NYSE
Amex
JSE
NYSE
Source: Exchange Websites
*Includes RTOs and QTs on TSXV
TSX
TSXV*
ASX
9
5
3
3
2
LSE-AIM
NYSE
Amex
NYSE
HKEx
JSE
Our exchanges have the most diversified roster of public
mining companies by stage of development
MARKET CAPITALIZATION OF TORONTO STOCK EXCHANGE AND TSX VENTURE EXCHANGE MINING ISSUERS (C$M)
April 30 2009
43%
16%
1%
<1
18%
14%14%
9%
8%
1-5
5-10
10-25
15%
4%
25-50
13%
16%
2%
1%
9%
0%
50-100
100-250
250-500
TSX Venture
6%
0%
10%
0%
500-1B
>1B
TSX
Toronto Stock Exchange mining issuer base: 344 issuers, $229.4B Market Cap
TSX Venture Exchange mining issuer base (excludes NEX): 1077 issuers, $12.3B Market Cap
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We have 123 international mining companies –
the most of any exchange in the world
TMX Group International Listings
by Sector
Financial Services
& Products, 18,
7%
Cleantech, 15,
5%
TMX Group Mining International Listings
by Country/Region
Life Sciences, 11,
4%
UK/Europe, 13,
10%
Australia/New
Zealand/Papua
New Guinea, 27,
21%
South
Africa/Africa, 11,
9%
China, 10, 8%
Tech, 16, 6%
Central &
S.America, 4, 3%
Mining, 123, 45%
Oil & Gas, 27,
10%
Other*, 3, 2%
USA, 59, 47%
Diversified
Industries, 63,
23%
Exposure to different countries through the mining sector on TMX
11
*Other includes Caribbean, Channel Islands, Guernsey
Our mining companies have operations around
the world
50% of the 10,000+ mineral exploration projects held by TSX and TSXV companies are outside of Canada
12
Source: InfoMine
Mining sector activity has increased in the first
five months of 2009
25 New Mining Listings
(Includes 14 Mining QTs)
Q1 Value of Mining Equity Financings (C$ Millions)
4,233
356 financings
4
3,250
4 New Mining Listings
May 31 2009:
339 Mining Companies on TSX
Market Cap C$276.8B
(up 34% since Dec.31.2008)
1,876
20
1079 Mining Companies on TSXV
Market Cap C$13.8B
(up
885
58% since Dec.31.2008)
Equity Capital Raised YTD May 2009:
TSX: C$6.02B
TSXV: C$0.676B
(represents 80% of the total mining equity
capital raised on TSX and TSXV in all of 08)
QTs = Qualifying Transactions on TSX Venture Exchange
13
39
TSX-TSX
Venture
NYSE
ASX
LSE-AIM
1
1
165
129
Hong Kong
NASDAQ
Source: Gamah International, YTD March 2009
Compiled by TMX Group
2
8
Other
Mining activity on Toronto Stock Exchange
has increased in the last five months
2500
450
400
$1,970
2000
350
300
$1,507
$1,452
1500
250
$1,032
$1,018
200
1000
150
$537
100
500
$345
$254
$239
$212
$102
$88
$63
$44
Aug-08
Sep-08
50
$95
0
0
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Mining Equity Capital Raised on TSX (C$M)
14
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
TSX Mining Market Cap (C$B)
Mar-09
Apr-09
Market Capitalization (C$B)
Equity Capital Raised (C$M)
$2,113
Contents
1. Globally Competitive Exchanges
2. Experts in Mining
3. TSX Venture Exchange and the Capital Pool Company Program
15
Companies list on TSXV and TSX using
various listing vehicles
Going Public Activity on TSX Venture Exchange
Going Public Activity on TSX
366
223
329
259
204
197
207
281
237
126
2004
2005
IPO
16
2006
CPC IPO
RTO
2007
QT
Other
2008
2004
2005
2006
IPO Company
IPO ETF/Structured Product
Other
2007
2008
IPO Income Trust
TSX Venture Graduate
Capital Pool Company (CPC) Program is
a unique reverse merger listing vehicle
17
Successful Track Record of the CPC™ Program
Capital Pool Company (CPC™) Program:
•
2,021 listed since program inception (1987)
•
79% of CPCs have completed their QT
•
247 former CPCs currently trade on a senior exchange
•
22% of the 45 graduates to TSX in 2008 were CPCs
–
28% of the 72 graduates to TSX in 2007 were CPCs
•
On average since 2004, 8% of TSX’s new listings were CPCs
•
A new clean CPC shell has none of the hidden costs of a shell with
previous operating history
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As at December 31, 2008
Why/When a CPC
Company
Wants/
Needs
Market
Conditions
Critical
Success
Factors
19
•
•
•
•
Alternative access to capital; Retain higher ownership
Want to be public company (M&A currency, stock options, visibility)
Greater flexibility, certainty and control in the process
Going public risk reduced
•
•
•
•
Company is too early stage for a broadly distributed regular IPO
IPO market is not strong enough in general
VC financing is not viable or management prefers not to use
Market appears to reward growth business of target company’s
sector
•
•
•
•
•
Management
Long term strategy to grow as a public company
Reasonable valuation = Viable share structure
Investor support
Appropriate advisors (lawyer, broker, investment banker)
TSX Venture graduates have succeeded in the
senior market
31 Companies that started on TSXV are now in S&P/TSX Comp Index
(11 were former CPCs)
Alamos Gold Inc.
AltaGas Income Trust
Baytex Energy Trust
Birchcliff Energy Ltd.
Boardwalk Real Estate Investment Trust
Calloway Real Estate Investment Trust
Crescent Point Energy Trust
Daylight Resources Trust
Ensign Energy Services Inc.
European Goldfields Limited
First Quantum Minerals Ltd.
HudBay Minerals Inc.
Lundin Mining Corporation
New Gold Inc.
Niko Resources Ltd.
Osisko Mining Corporation
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Pacific Rubiales Energy Corp.
Pan American Silver Corp.
Pason Systems Inc.
Petrobank Energy And Resources Ltd.
Peyto Energy Trust
Precision Drilling Trust
Provident Energy Trust
Red Back Mining Inc.
Savanna Energy Services Corp.
Silver Standard Resources Inc.
Silver Wheaton Corp.
Silvercorp Metals Inc.
Tanzanian Royalty Exploration Corporation
Thompson Creek Metals Company Inc.
Vermilion Energy Trust
Tim Babcock
Director, Listed Issuer Services
TSX Venture Exchange
416-365-2202
Email: tim.babcock@tsxventure.com
Greg Ferron
Senior Manager, Global Mining
Toronto Stock Exchange & TSX Venture Exchange
greg.ferron@tsx.com
416.947.4477
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