Perth-based Nkwe Platinum Ltd has chosen to list on London Stock Exchange’s Alternative Investment Market, marking a change from the flurry of Australian resource companies turning their attention, and their pockets, towards Canada.
Some four or five years ago AIM was the place to go for Australian resource companies, with the dual-listing process there considered easier than on the Australian Securities Exchange.
DJ Carmichael & Co head of research Paul Adams said in Australia hundreds of shareholders were required for a company to list, as opposed to the handful of investors needed in London, which leads to an illiquid stock.
However following some high profile collapses on AIM including Asia Energy Ltd, the herd mentality that appears to be prevalent in Australia saw local firms head more and more onto the Toronto Stock Exchange.
Recent TSX listings include gold mining companies Dioro Exploration NL and Troy Resources NL, while Africa-focused Bannerman Resources Ltd raised $22.4 million, Argentina-focused Andean Resources Ltd pocketed $42.6 million.
Papua New Guinea-focused Marengo Mining Ltd also plans to list on the TSX shortly.
“The TSX is the home of the junior mining company on a worldwide basis,” Mr Adams said. “There is a greater appetite but there’s also a more mature appreciation of sovereign risk in Canada. I think Australian investors are a little bit parochial with respect to where they go.”
Mr Adams added the primary issue of heading towards the TSX was to get access to North American institutions which consider $2 million to $3 million as coffee money, and secondly to increase valuation multiples which in a perfect world should translate to an increase in value on the ASX.
However the lure of the TSX was not the right fit for Nkwe where executive director Pater Landau said it was more a circumstance based on where the company’s investors were.
“It was more our connection with London and the time zone in South Africa,” Mr Landau said.
Nkwe expects to list on AIM and on the Johannesburg Stock Exchange some time in July.
