"The clean energy transition will see a huge growth opportunity in Latin America in 2021 and beyond. There will be a need of more than 3 billion tons of minerals and metals to develop cleaner energy technologies and deploy wind, solar geothermal power, as well as energy storage."
Can you provide an overview of the performance of TSX and TSXV in Latin America’s mining industry in 2020?
Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) had great momentum in the mining sector in 2020. Latin America is a very important mining market for us, and currently represents 36% of all mining issuers on TSX and TSXV. As of December 31st, 2020, there were 410 companies mining in Latam listed on TSX and TSXV, with 1,061 mining properties. In 2020, we saw C$7.5 billion raised in equity capital (C$4.1 billion on TSXV and C$3.4 billion on TSX), and C$2.9 billion of that equity capital was raised with companies that have mining projects in Latam. We also saw 1,467 financings on TSXV and 175 financings on TSX (a total of 1,642), which represents a 30% increase in comparison with 2019.
In global mining, TSX and TSXV continue to be number one in terms of amount listed, with 1,146 companies, and in terms of the equity capital raised from 2016 to 2020, which constituted 37% of the total mining equity capital in that period. In addition, 42% of global public mining companies are listed on TSX and TSXV, and 47% of the over 5,200 mineral TSX and TSXV exploration projects are held outside of Canada. There were 57 new listings on TSX and TSXV in 2020, 11 of which were in Latam.
What are the main themes you see impacting Peru’s and Latam’s mining sector in 2021, and what should investors be aware of in terms of risk and reward?
In the mining sector, Latin American markets are competing for capital more than ever. Investors are paying close attention to risks and opportunities in this region, including political stability and business environment. They are also aware of the measures that mining jurisdictions are taking to adapt and mitigate the impact of Covid-19, and how they are tackling ongoing challenges for investment in Latin America such as environmental permitting, processes, and social licenses to operate.
In Peru, specifically, mining is the engine of its economic growth. The country has made great efforts to welcome foreign investments through an open and stable mining regulatory environment, strong fundamentals, and stable macroeconomic indicators. Issuers and investors are well aware of this positive investment landscape in Peru, where investments will be a critical part of Peru’s success in the future. There are currently 62 TSX and TSXV-listed mining companies operating in Peru, with 137 mining properties, and we play an active role developing the country’s mineral wealth.
Beyond 2021 investors can rely on two essential factors for the mining sector in Latin America: qualified human capital and close attention to ESG factors.
Can you elaborate and summarize the main points of your article: “Green supply chain for a clean energy transition: the opportunities for Latam mining companies to move into a low carbon future”?
The clean energy transition will see a huge growth opportunity in Latin America in 2021 and beyond. There will be a need of more than 3 billion tons of minerals and metals to develop cleaner energy technologies and deploy wind, solar geothermal power, as well as energy storage. Peru, with its impressive mineral potential, has the possibility of playing a key role in the low carbon future. For this, it is imperative that we see more management teams from Peru and Latin America positioning their companies for future growth. TSX and TSXV have the markets that are necessary to raise the capital to finance this growth. We believe Peru has the entrepreneurial capacity to move up the value chain.
Can you explain the new features of the Capital Pool Company (CPC) program?
As a result of extensive consultation with stakeholders across the TSXV community, the Capital Pool Company (CPC) program underwent key changes that took effect January 1, 2021. These changes include increased flexibility, new jurisdictions added, residentiary restrictions eased, spending restrictions simplified, reduced regulatory burden, relaxed requirements on shareholder distribution and shareholder approval, and improved economics.
The CPC program is a unique Canadian listing vehicle that is offered by TSXV which has accounted for 30% of new TSXV listings in the last 10 years. At the end of December 2020, there were 129 CPCs listed on TSXV that had not yet completed their qualifying transaction. Since the inception of the program, over 2,200 CPCs have been listed and gone on to make their qualifying transaction. These companies raised about C$75 billion in equity, and this is the most common way that companies go public on TSXV.
The CPC program is quite relevant to the Latam junior mining sector as it allows access to our two-tiered ecosystem, where a company can list on our junior market TSXV and then graduate to the main board TSX when the timing is right to meet growing capital needs. There are over 700 companies that have graduated from TSXV to TSX so far, and some of the largest mining companies listed on TSX have started on TSXV. Approximately 52% of TSX mining issuers graduated from TSXV.