All that glittered was gold for mining companies on the Toronto Stock Exchange (TSX) last year.
According to financial firm Ernst & Young, the total market capitalization of the top 100 miners listed on the TSX and TSX Venture totalled $467 billion in 2010, compared with $325 billion the year before.
And 61% of the market’s new entrants were focused on one commodity – gold.
“Strong commodity prices and the fundamental need to develop long-term reserves will continue to drive activity in 2011, particularly in the gold sector,” commented Tom Whelan, E&Y’s national mining leader.
That’s good news for Vancouver’s mining sector, which is considered a global hub and home to more than 800 companies.
In 2010, 80 companies on the TSX had market capitalizations that exceeded a $1 billion market capitalization, compared with 54 in 2009.
As well, 52 mining initial public offerings (IPO) across the TSX and TSX Venture raised more than $1.3 billion last year.
And issuers raised more than $17.7 billion through IPOs, public offerings and private placements in 2010.
Whelan expects more IPOs in 2011, with larger firms spinning out projects into separate companies.
Recent examples include the creation of new mining ventures such as Pretium Resources (TSX:PVG), Tahoe Resources (TSX:THO) and Primero Mining (TSX:P) (see “Mining veterans driving interest in junior exploration companies” – issue 1112, February 15 to 21.)
Whelan also believes the proposed merger between the TSX and the London Stock Exchange (see “Miners question benefits of TSX-LSE merger” – issue 1113, February 22 to 28) could be good news for Canada’s mining sector.
Whelan said, “Mining is truly a global industry … A merger of these premier markets would bring together two complementary platforms, widening mining companies’ access to capital.”