A Vancouver junior exploration company focused on Peru is going into retreat through a planned voluntary move onto the NEX – the Toronto Stock Exchange’s storage area for dormant companies.
Zincore, which is focused on new zinc and other base metal properties in Peru, said it can’t raise the capital it needs to continue to finance exploration and development projects.
According to its most recent financials, the company was forced to write down $34 million on its flagship project, the Accha Zinc Oxide District, and has a negative working capital of $3.6 million.
Since 2011, its share values have dropped from a high of $5.16 to $0.03 per share.
Earlier this month, the company received notification from the TSX that it was under review for failing to meet listing requirements.
A move to the NEX is not typically voluntary. It’s most often required by the TSX and TSX Venture exchanges when a company fail to meet its ongoing listing requirements.
Shares can still be traded for NEX-listed companies, but there are restrictions on the kind of business the company can conduct. The listing costs and requirements are lower than on the upper tier of the TSX and TSX Venture exchanges.
"An NEX listing will continue to offer investors an opportunity to buy and sell Zincore shares, while at the same time reducing our expenses,” Zincore CEO Jorge Benavides said in a press release.
“Given that it remains extremely difficult to raise funds in the current markets and we are subject to a TSX listing review … we have reviewed the company's options and believe that delisting our shares from the TSX now and transitioning to the NEX is in the best interests of our shareholders."
As reported in last week’s Business in Vancouver, Tony Simon, a founder of the Venture Capital Markets Association, recently calculated that close to 600 junior mining and exploration companies listed on the TSX Venture exchanges have negative working capital.
He and other retail investors question how they are continuing to meet their listing requirements, say that they are weighing down the exchange as a whole, to the detriment of viable companies.
