Miners poised to lead fundraising in Canada, says TSX CEO

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Band Divya Rajagopal

TORONTO, June 27 (Reuters)Miners looking to accelerate exploration of scarce critical minerals are expected to lead fundraising in Canada this year. the manager of the Toronto Stock Exchange said on Mondayas sectors such as technology get in the background in the middle of the market Volatility.

A major source of capital for the critical minerals sector this year comes from large companies such as BHP Ltd BHP.AX and Rio Tinto RIO.AX, the throwing their weight behind young miners to speed up exploration projects.

Young miners are encouraged by the Canadian government Plan announced in this year’s budget to provide CA$4 billion (US$3.1 billion). to critical minerals.

“I think we’re going to see a sort of mining renaissance that we haven’t seen in years, just given what’s happening with global demand and supply,” said Loui Anastasopoulos, CEO of the Toronto Stock Exchange (TSX). told Reuters, pointing to the focus on investments in critical minerals.

Miners raising capital on the TSX will boost Canada’s prospects development its vast deposits of critical minerals, including cobalt, lithium, nickel and copper, which are key to its success the transition away from carbon-based energy. It could also help reduce dependence on China for critical minerals. The Asian economic superpower hosts approximately 50% of the world’s critical mineral deposits.

So far this year, Canadian listed miners have raised $3.1 billion, representing 25% of the total capital raised on the TSX and TSX TSX Venture Exchange (TSXV), Compared to 18% in the same period last year, TSX data shows while overall fundraising is down about 54%. Last year, technology companies led the equity sector with CA$13.8 billion in raised funds, followed by mining at CAD$10 billion and financial services at CAD$6.9 billion.

That The TSX is betting that miners looking to add critical minerals to their portfolios will help close some of the fundraising deficit this year.

Based in Calgary Lithium Chile LITH.V and Based in Toronto Northern Graphite Corporation NGC.V Lead capital raising in 2022 totaling $51 million through private placements. Anastasopoulos said at least six more mining companies are expected to list on the stock exchange the TSX this year.

‘CARELY OPTIMISTIC’

Investment bankers also expect the trend of big miners injecting capital to young miners to continue after BHP and Rio Tinto announced it her plans to invest in explorers.

In June, Rio Tinto agreed to pay 10 million CAD for a 10% interest in British Columbia-based Nano One Materials Corp NANO.TO, which deals with the production of cathode materials for lithium batteries. In February, BHP bought a 5% stake Vancouver based Copper Gold Explorer filo Mining for CAD 100 million.

Lauren Bermack, a partner and national deals mining leader Consulting firm PwC Canadasaid when sentiment drops, it becomes more difficult to raise capital in mining compared to blue chip companies.

However, with the outlook for critical minerals bright, risk-taking investors are looking for assets that are trading at reasonable prices, she added.

Anastasopoulos the TSX also sees positive sentiment for the mining sector.

“We’re cautiously optimistic… but something pretty interesting is about to happen the mining space over the next 12 to 24 months,” he said.

(Reporting by Divya Rajagopal Editing by Paul Simao)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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