1 / 38

Exploration, Investment and Development for Miners, Financiers and Investors Canada as a source of investment for Afric

Exploration, Investment and Development for Miners, Financiers and Investors Canada as a source of investment for African mining Africa Mining Congress 2010. Bruce Shapiro President, MineAfrica Inc. President, Canada-South Africa Chamber of Business www.mineafrica.com

nam
Download Presentation

Exploration, Investment and Development for Miners, Financiers and Investors Canada as a source of investment for Afric

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Exploration, Investment and Development for Miners, Financiers and InvestorsCanada as a source of investment for African miningAfrica Mining Congress 2010 Bruce Shapiro President, MineAfrica Inc. President, Canada-South Africa Chamber of Business www.mineafrica.com www.canadasachamber.com

  2. Why should Africa’s mines turn to Canada? 1. Toronto is the mining finance capital of the world Canada is a global leader in the mining industry and Toronto is the world's most active centre for mining equity finance. Over the past five years, issuers listed on both the Toronto Stock Exchange (TSX) and the TSX Venture Exchange have led all international exchanges in mining equity financings. Over 10,000 transactions; • 80% of all mining financings in number (US$136.9 billion). • 36% of total equity capital raised globally. • 27% compound annual growth rate in number of listings. • Record $22.2 billion in 2009 alone.

  3. Importance of Toronto To emphasize the importance of Toronto as a source of mining equity, its main competition in terms of number of listings is; • ASX at 9%. • LSE-AIM at 8.5%. • US markets combined at 0.35%.

  4. Total # of listings as of 2009 Mining Listings

  5. Number of New Mining Listings 2005-2009 YearTSX/TSXV LSE/AIM ASX NYSEAmex NYSE HKEx JSE 2009 104 4 22 1 1 1 0 2008 138 29 9 5 3 3 2 2007 186 142 33 13 3 n/a 4 2006 112 70 55 14 6 n/a 10 2005 86 53 67 17 3 n/a 6 The table shows a consistent increase in the number of new listings on the TSX and TSX-V from 86 in 2005 to 104 by last year. On the other hand, listings on the competing exchanges have been going down.

  6. Top 10 Caps on TSX Market Capitalization in 2009

  7. TSX/TSXV and Africa Toronto is the top exchange for mining in Africa; • 169 mining companies listed in 2009 out of about 300 non African based comanies. • 681 mining properties as of 2009. • $2.6 billion in equity capital raised out of 68 financings. • Projects in 44 African countries.

  8. Top 10 Financings into Africa in 2009 • Paladin Energy - uranium in Namibia $400m • First Quantum – copper, diamonds in DRC, Mauritania, Zambia $345m • IAMGOLD - gold in Burkina Faso $345m • Katanga Mining - copper in DRC $282m • Anvil Mining - copper in DRC $200m • Equinox Minerals - copper in Zambia $184m • Red Back Mining -gold in Ghana, Mauritania $165m • Banro Corp - gold in DRC $117m • Centamin Egypt - gold in Egypt $98m • Mantra Resources - uranium in Tanzania Mozambique $52m

  9. Canadian projects in Africa

  10. 2. Expected Canadian mining growth to boost foreign investment Like in most other jurisdictions, the Canadian mining sector suffered losses during the recent financial crisis. Canada Mining Report 2010; • Canadian mining shrank 10% year-on-year. • Predictions of 7.4% annual growth for next 4 years. • Investment outflows to foreign development expected.

  11. 3. Leader in CSR in the mining sector Canadian miners are working with the federal government on a Corporate Social Responsibility Strategy to help developing countries reduce poverty and build their economies through responsible development of their natural resources. Canada’s CSR Strategy for the International Extractive Industry in Developing Countries sets out government's expectations on; • Social responsibility. • Environmental stewardship. • Health and safety. Canada's mining industry has its own independent CSR program, Towards Sustainable Mining, which involves consultations, public reporting and third party verification.

  12. How different jurisdictions can access Canadian finance 1. Listing on the TSX and TSX-Vor CNSX Stock listing is a proven way to; • Raise capital, particularly for junior miners. • Attract long-term investment. • Draw expert advice in project finance and management.

  13. Listing Costs TSX TSX-Venture Listing Fees $10,000-$200,000 $7,500-$40,000 Accounting/Auditing Fees $75,000-$100,000 $25,000-$100,000 Legal Fees $400,000-$750,000 $75,000+ Underwriters’ commission 4-6% Up to 12% Other fees to consider include: Securities Commission fees, Transfer agency fees, Investor relations costs, Geological or engineering reports, Printing and translation costs, Valuation reports and Director and Officer liability insurance Listing Timetable and Costs Details of an approximate time table and the various costs involved can be found in the white paper in the binder

  14. Canadian National Stock Exchange – CNSX • CNSX has created a unique exchange to trade listed securities that is designed to meet the needs and characteristics of public companies and their investors. CNSX matches enhanced disclosure and streamlined issuer regulation with leading edge technology. Combined with comprehensive regulatory oversight CNSX provides an efficient new stock exchange that fosters integrity, transparency and liquidity for trading securities. • The costs of listing on this exchange are much lower than the TSX or TSX-V and the listing requirements are considerably easier to comply with. However the issuer will have to have its own pool of investors to take advantage of this option. • It is possible to move from the CNSX to the TSX or TSX-V at a later stage if there is benefit in this.

  15. 2. Partnering with Canadian Investors Joint ventures and strategic alliances; • Canadian industry completed 442 deals worth $10.2 billion in 2009. • Advantage in providing risk-sharing. • Canadian knowledge of technical, financing, legal & regulatory landscape. • Contacts for political, financial & professional purposes. • Access to Canadian Financing institutions such as Export Development Corporation.

  16. 3. Participating in promotional events PDAC’s annual exhibition - largest mining convention of its kind; • Among top networking platforms for investors, financiers, developers and brokers. • Junior miners particularly enhance their chances of being noticed. • PDAC 2010 drew a record 22,000 delegates and 1,000 exhibitors in trade show.

  17. 4. Participating in African focused promotional events held in Canada Canada-South Africa Chamber of Business & MineAfrica; • Host largest North American African focused annual mining breakfast and seminar during PDAC - record 340 attended. • MineAfrica rents out space at its booths to African juniors, service providers and governments. • Hosts seminars in Canada and London, UK that are dedicated to mining in Africa. • MineAfrica hosts similar seminars which include Africa but are not Africa specific, through its new international division, On The Ground Group.

  18. 5. Participating in Non-African focused promotional events held in Canada • There are many opportunities to promote your mining project in Canada but other than the Canada-South Africa Chamber of Business and MineAfrica events, none of these opportunities focus exclusively on Africa.

  19. Africa’s mining sector: competing against global leaders 1. Advantages – Abundant resources International Development Research Centre rates Africa as new frontier for innovation • Resevoir of young talent. • Growing market for cutting-edge technologies. • Source of fresh ideas. And Africa has the geology

  20. Africa’s mining sector: competing against global leaders The Fraser Institute recently released its annual mining survey comparing all mining regions in various categories including policy potential, which is the main area of concern for investors when it comes to opportunities in Africa. The table in the following slide shows the policy potential for 10 of Africa’s mining jurisdictions. The Fraser Institute scored them on a progression scale from 2006/2007 to 2009/2010. It also ranked them out of the total of similar jurisdictions measured over the same period. You will notice that there are African jurisdictions that are in the top third, such as Botswana and Burkina Faso and yet there are others that are in the bottom five, e.g. DRC and Zimbabwe.

  21. Categories assessed for policy potential • Policy formulation • Administration, interpretation and enforcement of regulations • Environmental concerns • policy inconsistencies • Concern on native/aboriginal land claims • Taxation regimes • Availability of infrastructure • Socioeconomic agreements • Community development conditions • Political stability • Labor regulations and agreements • Geological data bases • Security

  22. Policy Potential Index Score Rank 2009/ 2008/ 2007/ 2006/ 2009/2008/ 2007/ 2006/ 2010 2009 2008 20072010 2009 2008 2007 • Botswana 66.5 64.9 74.3 47.3 21/7218/71 11/68 38/65 • Mali 58.2 53.6 24.7 41.4 27/7233/71 58/68 42/65 • Ghana 53.3 51.3 63.1 45.3 34/72 35/71 23/68 40/65 • Burkina Faso 49.6 45.1 45.5 34.5 36/7242/71 38/68 46/65 • Namibia 49.2 52.5 51.4 * 37/7234/71 33/68 * • Tanzania 44.9 41.8 35.0 41.3 44/7248/71 49/68 43/65 • Zambia 36.5 44.4 49.8 31.0 52/72 44/71 34/68 50/65 • South Africa 26.2 40.4 34.6 29.0 61/72 49/71 50/68 53/65 • DRC (Congo) 18.9 24.1 34.4 17.4 68/72 63/71 51/68 57/65 • Zimbabwe 14.7 19.1 2.9 2.9 69/72 65/71 67 /68 65/65 The table above ranks the 10 sampled African countries for the 13 policy areas covered by the Fraser Institutein order of their standing out of 72 major mining jurisdictions surveyed by the Fraser Institute worldwide. The higher the ranking, the higher the country’s potential to attract new mining investment on the basis of policy.

  23. Access to Canadian finance boosted South America’s mining sector • Increasing investment concentration • 256 (169) Canadian mining companies in South America • 1,015 (681) Canadian mining properties. • $3.0B ($2.6B) in equity capital raised in 2009 – from 125 (68)financings. African figures in brackets

  24. Top 10 Financings for South American Projects in 2009 • Mirabela Nickel - nickel, copper in Brazil $267m • Silver Standard Resources - gold, silver in Argentina $170m • Kinross Gold - gold in Chile & Ecuador $516m • Medoro Resources - gold in Colombia $102m • Andean Resources - gold in Argentina $90m • Jaguar Mining - gold in Brazil $86m • Rusoro Mining - gold, copper in Venezuela & Chile $80m • Quadra Mining - gold, copper in Chile $78m • Colossus Minerals - gold, platinum in Brazil $72m • MBAC Fertilizer - phosphate, potash in Brazil $57m

  25. Canadian projects inSouth America

  26. Policy Potential Index Score Rank 2009/ 2008/ 2007/ 2006/ 2009/ 2008/ 2007/ 2006/ 2010 2009 2008 2007 2010 2009 2008 2007 • Chile 79.1 79.9 82.0 64.1 7/72 7/71 6/68 27/65 • Mexico 58.1 57.7 63.0 64.1 28/72 28/71 24/68 28/65 • Peru 47.7 56.6 54.1 30.1 39/72 30/71 28/68 52/65 • Brazil 46.1 47.1 45.0 51.2 40/72 39/71 39/68 36/65 • Colombia 40.6 43.0 26.3 24.6 48/72 46/71 56/68 55/65 • Panama 31.2 42.4 6.1 * 56/72 47/71 65/68 * • Argentina 28.4 33.0 40.3 40.9 59/72 56/71 43/68 44/65 • Guatemala 21.9 5.1 * * 64/72 69/71 * * • Honduras 20.4 11.8 0.0 * 65/72 68/71 68/68 * • Bolivia 20.1 16.5 7.0 9.2 66/72 66/71 64/68 63/65 • Ecuador 10.5 4.1 4.9 30.1 71/72 70/71 66/68 51/65 • Venezuela 6.9 3.7 20.3 4.8 72/72 71/71 59/68 64/65 Just like in the case of Africa, the table above ranks the 10 sampled South American countries in order of their standing out of 72 major mining jurisdictions surveyed by the Fraser Institute worldwide. The higher the ranking, the higher the country’s potential to attract new mining investment on the basis of 13 policy categories previously stated.

  27. Comparison of African & South American Policy Potential Indexes Score Rank 2009/ 2008/ 2007/ 2006/ 2009/ 2008/ 2007/ 2006/ 2010 2009 2008 2007 2010 2009 2008 2007 • Chile 79.1 79.9 82.0 64.1 7/72 7/71 6/68 27/65 • Botswana 66.5 64.9 74.3 47.3 21/72 18/71 11/68 38/65 • Mali 58.2 53.6 24.7 41.4 27/72 33/71 58/68 42/65 • Mexico 58.1 57.7 63.0 64.1 28/72 28/71 24/68 28/65 • Ghana 53.3 51.3 63.1 45.3 34/72 35/71 23/68 40/65 • Burkina Faso 49.6 45.1 45.5 34.5 36/72 42/71 38/68 46/65 • Namibia 49.2 52.5 51.4 * 37/72 34/71 33/68 * • Peru 47.7 56.6 54.1 30.1 39/72 30/71 28/68 52/65 • Brazil 46.1 47.1 45.0 51.2 40/72 39/71 39/68 36/65 • Tanzania 44.9 41.8 35.0 41.3 44/72 48/71 49/68 43/65 • Colombia 40.6 43.0 26.3 24.6 48/72 46/71 56/68 55/65 • Zambia 36.5 44.4 49.8 31.0 52/72 44/71 34/68 50/65 • Panama 31.2 42.4 6.1 * 56/72 47/71 65/68 * • Argentina 28.4 33.0 40.3 40.9 59/72 56/71 43/68 44/65 • South Africa 26.2 40.4 34.6 29.0 61/72 49/71 50/68 53/65 • Guatemala 21.9 5.1 * * 64/72 69/71 * * • Honduras 20.4 11.8 0.0 * 65/72 68/71 68/68 * • Bolivia 20.1 16. 7.0 9.2 66/72 66/71 64/68 63/65 • DRC (Congo) 18.9 24.1 34.4 17.4 68/72 63/71 51/68 57/65 • Zimbabwe 14.7 19.1 2.9 2.9 69/72 65/71 67 /68 65/65 • Ecuador 10.5 4.1 4.9 30.1 71/72 70/71 66/68 51/65 • Venezuela 6.9 3.7 20.3 4.8 72/72 71/71 59/68 64/65

  28. Comparison of Africa and South America The policy potential index tables show that on average, African countries fare better than South American countries. • Only Chile ranks 7th out of 72 jurisdictions • Most other South American countries rank towards tail end of scale. • Ecuador and Venezuela are actually ranked 71st and 72nd respectively. • Majority of African countries rank in mid-table.

  29. Comparison tableCanada Africa South America Canadian Companies 169 256 Mining Properties 6811015 Financings in 2009 68125 Capital Raised in 2009 $2.6B $3.0B

  30. Africa – South America Comparison – Global

  31. Projects by All CompaniesGlobal

  32. Projects by TSX and TSX.V Companies

  33. Global Capital Raisings from Jan 1, 2009

  34. Capital Raisings from Jan 1, 2009TSX Listed Companies

  35. Several reasons why Canadian investors favour South America 1. History • Major Canadian investment to South America began in 1980s. • Canadian investment to Africa ballooned only after 2000. 2. Policy • Many South American gov’t’s have similar policies to Canada. • Africa behind in mineral policy changes. 3. Capacity for Risk • Canada is a resource based economy and Canadian investors accept a greater risk profile than other western countires 4. Geology • The two regions have almost similar geological attributes. 5. Other • Less important considerations include proximity and different time zones both of which impact on communication and travel costs.

  36. Sources and Thanks to: • Innocent Madawo (Researcher) • Canada-South Africa Chamber of Business • MineAfrica Inc. • The Fraser Institute • National Resources Canada • Canada Mining Report – 2010 • The Vancouver Sun • TMX • Canadian Securities Law • International Development and Research Centre • Intierra Resource Intelligence

  37. Useful Websites • imadawo@yahoo.com • http://www.mineafrica.com/ • http://www.canadasachamber.com/ • www.fraserinstitute.org • http://www.nrc-cnrc.gc.ca/eng/index.html • http://www.reportsandreports.com/market-reports/canada-mining-report-2010/ • http://www.vancouversun.com/business/Will+mining+suffer+Bill+becomes/3072115/story.html • http://www.tmx.com/en/listings/listing_with_us/faq/index.html • http://www.canadiansecuritieslaw.com/2010/04/articles/mergers-acquisitions/mining-ma-opportunities-and-trends/ • http://www.mineafrica.com/miningseminar/mineafricapdac2010report.htm • http://www.idrc.ca/AfricaNewFrontier/ • http://www.fraserinstitute.org/commerce.web/product_files/miningsurvey2009-2010.pdf • http://www.fraserinstitute.org/commerce.web/product_files/miningsurvey2009-2010.pdf • http://www.nrc-cnrc.gc.ca/eng/index.html • intierra.com

  38. For More Information Bruce Shapiro President, MineAfrica Inc. President, Canada-South Africa Chamber of Business Toronto, Ontario, Canada bruce@mineafrica.com www.mineafrica.com www.canadasachamber.com

More Related