Mining Companies now prefer listings in London or New York

Canadian mining companies who want to attract new investors are increasingly opting for secondary listings in London and New York, which underlines the pent-up demand for the precious metal from generalist funds. Gold Prices XAU = are up 32% this year as central banks take stimulus measures in response to the COVID-19 pandemic. This has sparked a surge in liquidity for the miners, who have increased their dividends and pledged cost discipline to increase their appeal beyond a shrinking pool of pure commodity investors. A listing in New York or London opens the door for miners' stocks to be added to many more exchange-traded funds (ETFs) - which guarantees substantial liquidity and further broadens their investor base. "There is a lot of stupid money floating around in the mining industry in London and the miners want to suck it up," said Henry Steel, the London-based portfolio manager at Odey Asset Management, which manages $ 4.9 billion. That would help fill a huge void here in the London market created by the 2018 merger of Barrick Gold (ABX.TO) (GOLD.N) with Randgold Resources, which was listed in London. Mining companies' listings in London have slowed in recent years.  The Canadian Yamana Gold Inc. (YRI.TO) (AUY.N) and Endeavor Mining (EDV.TO) are among the companies that are listed in the second row. Almost half of the world's publicly traded mining companies are listed on the Toronto Stock Exchange and the TSX Venture Exchange, said owner TMX Group (X.TO). But the number of IPOs and new issues by mining companies in Toronto has declined since 2018, suggesting the market is losing some of its luster.  In July, Yamana said it had applied for a secondary listing on the London Stock Exchange (LSE), which it claims lacks sizeable pure gold producers with annual production of 1 million ounces or more. There is "a good match between what investors are looking for and what we can offer," said Peter Marrone, Executive Chairman of Yamana, in an interview. Toronto-listed Endeavor said it would decide by the end of the year whether to seek a secondary listing in London or New York after completing its takeover of rival Semafo. The company's management is based in London, which makes it "a natural landing for us," CEO Sébastien de Montessus said on a call. London investors are more risk averse and more comfortable with the complexities of African mining jurisdictions than in Toronto or New York, said a Johannesburg-based banker. Look for mines in Mali and Burkina Faso. "This is an unquantifiable aspect that I think is driving London," he said, declining to be mentioned. The Greenland-focused gold exploration company AEX Gold was listed on July 31st on the AIM, the submarket for small companies of the LSE. AEXG.L "There is definitely room for more," said Paul Jourdan, CEO of Amati Global Investors in Edinburgh, which has a 6.9% stake in AEX Gold. "What AEX shows is that there is an appetite in the London market, even for something like this at an early stage".