>Canadian Miners Don’t Love the London Stock Exchange – Deal Journal – WSJ

>Canadian Miners Don’t Love the London Stock Exchange
– Deal Journal – WSJ:
“By Phred Dvorak and Edward Welsch

When the London Stock Exchange Group Ltd. announced its proposed takeover of Toronto’s bourse, one of the supposed benefits was access–for Toronto-listed firms–to London’s deep pools of capital.

EPA/Adrian Bradshaw

That’s a topic dear to the hearts of roughly 1,500 cash-hungry start-up miners that populate the Toronto bourse and its venture affiliate. Those “junior miners”–and their constant need for money to drill, test and explore — have made the Toronto Stock Exchange, operated by TMX Group Inc., the mining-finance market of choice.

So what do those juniors think about the proposed deal? Not much, according to some of the attendees Deal Journal interviewed at the Prospectors & Developers Association of Canada conference in Toronto, the world’s largest gathering of small-cap miners.

Kerry Knoll, chairman of Canada Lithium Corp., with some $140 million in market cap, looked into listing on the LSE’s AIM market for smaller firms a few years ago and found it a much more expensive proposition than going public on the Toronto bourse. If London controlled the Toronto exchanges as well, the combined entity could raise the cost of listing in Canada, Knoll worries: “I would fear they’d bring that (higher-cost model) here and really put a crimp in our incubator.”

LSE and TMX executives selling the deal in recent weeks have said the Toronto exchange would remain Canadian-operated and regulated, and would benefit capital-seeking firms by offering truly global scale.

But David McPherson, president of Pure Nickel Inc., at some $14 million market cap, said he’d worry the interests of small, Canadian firms like his may get lost in a bigger exchange.

Pure Nickel raised money on the Toronto Venture Exchange, TSE’s junior market, in 2007 to buy land. It moved up to Toronto’s big board later that year. It’s already raised money from London institutional investors, but it doesn’t expect any additional U.K. retail-investment opportunities from a TSX-LSE combination.

“All I see is the risk that we could become insignificant in a much larger exchange,” he said.

But there are some fans, including Graham Downs, the CEO of ATAC Resources Ltd., market cap north of $600 million, thanks in part to a new discovery of gold in the Yukon.

“There’s a big resource component of the London Stock Exchange, but they are so focused on Africa and all these other places that they know,” Downs says. “They don’t have a lot of access to us, so I think it’ll open more pockets [of money] to Canadian ventures.”

Even though money may initially flow more toward London than Canada while the market finds its equilibrium, Downs says, in the end there will be a bigger pool of capital available to the best companies.

“If you’ve got good projects, if you’ve got a quality team, the money will find you,” he says.

Canadian Miners Don’t Love the London Stock Exchange – Deal Journal – WSJ

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Canadian Miners Don’t Love the London Stock Exchange – Deal Journal – WSJ

Canadian Miners Don’t Love the London Stock Exchange
– Deal Journal – WSJ:
“By Phred Dvorak and Edward Welsch

When the London Stock Exchange Group Ltd. announced its proposed takeover of Toronto’s bourse, one of the supposed benefits was access–for Toronto-listed firms–to London’s deep pools of capital.

EPA/Adrian Bradshaw

That’s a topic dear to the hearts of roughly 1,500 cash-hungry start-up miners that populate the Toronto bourse and its venture affiliate. Those “junior miners”–and their constant need for money to drill, test and explore — have made the Toronto Stock Exchange, operated by TMX Group Inc., the mining-finance market of choice.

So what do those juniors think about the proposed deal? Not much, according to some of the attendees Deal Journal interviewed at the Prospectors & Developers Association of Canada conference in Toronto, the world’s largest gathering of small-cap miners.

Kerry Knoll, chairman of Canada Lithium Corp., with some $140 million in market cap, looked into listing on the LSE’s AIM market for smaller firms a few years ago and found it a much more expensive proposition than going public on the Toronto bourse. If London controlled the Toronto exchanges as well, the combined entity could raise the cost of listing in Canada, Knoll worries: “I would fear they’d bring that (higher-cost model) here and really put a crimp in our incubator.”

LSE and TMX executives selling the deal in recent weeks have said the Toronto exchange would remain Canadian-operated and regulated, and would benefit capital-seeking firms by offering truly global scale.

But David McPherson, president of Pure Nickel Inc., at some $14 million market cap, said he’d worry the interests of small, Canadian firms like his may get lost in a bigger exchange.

Pure Nickel raised money on the Toronto Venture Exchange, TSE’s junior market, in 2007 to buy land. It moved up to Toronto’s big board later that year. It’s already raised money from London institutional investors, but it doesn’t expect any additional U.K. retail-investment opportunities from a TSX-LSE combination.

“All I see is the risk that we could become insignificant in a much larger exchange,” he said.

But there are some fans, including Graham Downs, the CEO of ATAC Resources Ltd., market cap north of $600 million, thanks in part to a new discovery of gold in the Yukon.

“There’s a big resource component of the London Stock Exchange, but they are so focused on Africa and all these other places that they know,” Downs says. “They don’t have a lot of access to us, so I think it’ll open more pockets [of money] to Canadian ventures.”

Even though money may initially flow more toward London than Canada while the market finds its equilibrium, Downs says, in the end there will be a bigger pool of capital available to the best companies.

“If you’ve got good projects, if you’ve got a quality team, the money will find you,” he says.

Canadian Miners Don’t Love the London Stock Exchange – Deal Journal – WSJ

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Which Gold Miners Might Be Impacted by Possible Unrest in The Ivory Coast ? (Sales Commentary)

CONCLUSION: The situation in the Ivory Coast continues to simmer after recent elections.  Now the army has closed the Ivory Coast borders and is suspending foreign news organizations from reporting issues.  If tensions continue then mining operations in the country could potentially be negatively impacted.

 For reference, here are the gold miners with operations in the Ivory Coast:

Endeavour Mining (not rated. EVD CN, mkt cap C$320mm) – A development project in the Ivory Coast but producing assets are located in Burkina Faso

Cluff Gold (Market Perform, no target, CLF LN, mkt cap £150mm)- A producing mine in the Ivory Coast that accounts for approx. 25% of our NPV.  Key asset is in Burkina Faso and an exploration play in Sierra Leone

Newcrest (Outperform, A$52.50, NCM AU, mkt cap A$31.1bn) – The Ivory Coast assets are only 4% of our project NPV, but the exploration upset 

La Mancha (not rated. LMA CN, mkt cap C$368mm) – Highly levered to the Ivory Coast, with existing production from the country and many exploration targets.

Perseus (not rated. PRU AU, mkt cap A$1.3bn) –  Main development project is Tengrela in the Ivory Coast, with a feasibility expected by year-end and production possible in late-2012

Randgold (Outperform, target US$125, RRS LN, mkt cap £5.5bn) – Growth asset Tongon is in the Ivory coast and is ramping towards production by the end of the year.  The mine is 30% of our project NPV 

Please see attached map from our West Africa gold analyst, to see locations of each asset in the country.

     ABIDJAN, Ivory Coast,  Dec. 3 (UPI) — The United Nations
has urged Ivory Coast election rivals to refrain from violence
while officials try to determine who won a presidential runoff.
     The Army sealed borders after Ivory Coast’s electoral
commission announced that opposition candidate Alassane
Ouattara defeated incumbent Laurent Gbagbo, the BBC reported.
     However, the Constitutional Council said the announcement
is invalid, alleging voter fraud by Ouattara.
     The army announced it closed Ivory Coast borders. It also
said it would suspend foreign news organizations from reporting
issues.
     The election, the first presidential election in a decade,
was intended to reunify the nation, which was torn by a civil
war in 2002.
     The United Nations received reports of violence in parts
of the west and north during recent voting but said overall the
election seemed peaceful.
     “Our job is to remind them of their promises and
commitments and especially not to use violence,” said U.N.
spokesman Hamadoun Toure.
     “They have to abide by electoral law, they have to keep
their promise during the campaigning that they won’t use
violence to settle disputes and they also said they’d abide by
the results,” Toure said.
     The Constitutional Council has one week to publish
official results of the election.
     Ivory Coast is the world’s largest producer of cocoa.
    
—
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All rights reserved.
—
-0- Dec/03/2010 14:49 GMT

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