TSX, TSXV miners raise most cash in a decade

The amount of money raised for mining on Canada’s leading stock markets the TSX and its Venture Exchange jumped 62% in this year’s first half compared with 2023’s same period, in a promising sign for the industry, according to data from parent company TMX.

Mining industry companies listed on the indexes sold shares for $6.8 billion in this year’s first six months vs. $4.2 billion in the year-earlier period, figures show. The industry is TMX’s largest sector by capital raising, listed stocks and volume traded, according to monthly reports.

“The first half has been very, very encouraging,” TMX global head of mining Dean McPherson said in a July 25 interview with The Northern Miner. “In terms of financing, that’s a key indicator of investors’ attitude and that’s been trending up.”

The TSX and TSXV hold listings for more miners than anywhere else, including stock markets in London and New York, with some 40% of the industry on the Toronto-based exchanges. This year’s figures mark another step in a mining sector rebound from a recent low-point of $4 billion raised on the indexes in 2022 and look to be the highest in at least a decade.

The equity amount raised was $6 billion in 2021, $2.4 billion in 2020, $1.6 billion in 2019, $4.4 billion in 2018 and $3.8 billion in 2017.

Top issuers

First Quantum Minerals (TSX: FM) accounted for nearly a quarter of the mining sector’s total in stock offerings with a more than $1.5-billion raising in February after the Panamanian government shut its Cobre Panama copper mine. The issue was part of debt restructuring that also included US$1.6 billion in bonds.  

Capstone Copper (TSX: CS; ASX: CSC) and major shareholder Orion Resource Partners raised $431 million in one of the largest capital raisings this year for a miner on the TSX. The deal helps fund the Mantoverde open-pit mine and the nearby Santo Domingo project in Chile.

New mining listings accounted for 29 of 121 total companies new to the Canadian markets during the year’s first half. The respective figures for the year-earlier period were 17 of 112. The TSXV had 25 initial public offerings (IPOs) by mining companies this year to June 30 compared with 11 in last year’s period, while the respective TSX figures are four and six.

“We have several IPOs on the Venture, but we haven’t had any real large IPOs yet on the TSX so that part of the market is still not quite there yet,” McPherson said. “Perhaps with the easing of interest rates that could be the last piece of the puzzle that will bring some pretty large IPOs that have been sitting on the sideline for a while to market.”

Canada’s central bank has cut benchmark interest rates twice this year, in June and July, to 4.5%. Analysts expect the United States Federal Reserve to begin cutting rates from 5.5% when it meets in September.

Across all industries, the TSX and TSXV raised $10.2 billion and $2 billion, respectively, for a total of $12.2 billion during the first half. During the same period last year, the figures were $5.4 billion for the TSX and $2.5 billion on the TSXV for $7.9 billion in total.

Commodity prices

The average financial raising in the year to June 30 was $44 million on the TSX and $3 million on the TSXV, data show. In 2023’s first half the respective amounts were $27.3 million and $3.4 million.

McPherson said he expects commodity prices to help miners, especially with record prices for gold approaching US$2,500 an oz., although copper has slid since a peak in May. The growth of artificial intelligence, which requires vast amounts of energy, could boost uranium, which has eased from more than US$100 a lb. in February, he said.

“Precious metals are hitting record highs and compounded with the whole energy transition thesis,” he said. “When you think about AI as well coming into focus, particularly when you think about uranium, there’s a lot of reasons to be very, very optimistic.”