By Jeff Lewis and Helen Reid
TORONTO/JOHANNESBURG, Aug 18 (Reuters) - Gold miners in
Canada keen to tap new investors are eyeing secondary listings
in London and New York, underscoring pent-up demand for the
precious metal from generalist funds.
Gold prices have soared 32% this year as central
banks dial up stimulus measures in response to the COVID-19
pandemic.
That has fueled a cash surge for miners, who have hiked
dividends and pledged cost discipline to broaden their appeal
beyond a shrinking pool of resource-only investors.
A listing in New York or London opens the door for miners'
shares to be included in many more exchange-traded funds (ETFs)
- guaranteeing substantial liquidity and broadening their
investor basis further.
"There is a lot of dumb money sloshing around in London in
the mining space, and the gold miners want to soak it up," said
Henry Steel, London-based portfolio manager at Odey Asset
Management, which manages $4.9 billion.
That would help plug a large gap https://www.reuters.com/article/us-randgold-rsrcs-m-a-listing/randgolds-hook-up-with-barrick-to-leave-large-void-in-london-market-idUSKCN1MC11L
in the London market left by Barrick Gold's
2018 tie-up with Randgold Resources, which had been listed in
London. Mining company listings in London have slowed in recent
years.
Canada's Yamana Gold Inc and Endeavour
Mining are among those weighing secondary listings.
Nearly half of global public mining companies are listed on
the Toronto Stock Exchange and TSX Venture Exchange, owner TMX
Group said.
But the number of mining IPOs and new issues in Toronto has
fallen since 2018, indicating the market is losing some luster.
In July, Yamana said it had applied for a secondary listing
on the London Stock Exchange (LSE), which it said lacked
sizeable pure-play gold producers with annual production of 1
million ounces or more.
There is "a good hand-to-glove fit of what is being looked
for by investors and what we can offer," said Peter Marrone,
executive chairman of Yamana, in an interview.
Toronto-listed Endeavour said it would decide by year-end
whether to pursue a secondary listing in either London or New
York after completing its acquisition of rival Semafo.
The company's management is London-based, making it a
"natural landing for us," Chief Executive Sébastien de Montessus
said on a call.
London investors have more risk appetite and are more
comfortable with the complexities of African mining
jurisdictions than in Toronto or New York, said a
Johannesburg-based banker. Endeavour mines in Mali and Burkina
Faso.
"That's an unquantifiable aspect that I think is driving
London," he said, declining to be named.
Greenland-focused gold exploration firm AEX Gold listed on
AIM, the LSE's small company sub-market, on July 31.
"There's definitely room for more," said Paul Jourdan, CEO
of Amati Global Investors in Edinburgh, which holds a 6.9% stake
in AEX Gold.
"What AEX shows is that there is appetite in the London
market, even for something early stage like that."
(Reporting by Jeff Lewis in Toronto and Helen Reid in
Johannesburg; additional reporting by Clara Denina and Zandi
Shabalala in London; editing by Ernest Scheyder and Sandra
Maler)
