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Capital raised by miners on TSX, TSX-V down 60% in January-September

Bnamericas Published: Friday, October 18, 2013

Equity capital raised by mining companies on the TSX and TSX-V exchanges in January-September sunk 60% to Cdn$2.89bn (US$2.81bn) from Cdn$7.29bn in the same period last year, according to the latest figures from the TMX group, which owns the two exchanges.

Investors have turned their backs on the high risk mining sector as Chinese economic growth transitions to slower rates and metals prices have tumbled. Mining companies have also been reporting large falls in profit as higher costs eat into margins.

On the TSX-V exchange, miners saw financings fall 53% to Cdn$1.01bn in the first nine months of 2013 from Cdn$2.12bn in the comparison period. Mining companies on the TSX fared even worse with a 64% drop in capital raised to Cdn$1.89bn from Cdn$5.17bn.

The combined market capitalization of mining companies listed on the TSX-V and the TSX was Cdn$429bn on September 30, 2012. On the same date this year, market cap had fallen to Cdn$252bn.

This September, four mining companies made the top five financings list: Atico Mining (TSX-V: ATY, OTC: ATCMF) (Cdn$19mn), True Gold (TSX- V: TGM) (Cdn$17mn), Roxgold (TSX-V: ROX) (Cdn$10mn) and Argex Titanium (TSX: RGX) (Cdn$10mn). All funds were raised through private placements.

In September 2012, only one mining company made the top five financings list - Canadian gold streaming company Sandstone Gold - with a Cdn$150mn public offering.

The TSX and the TXS-V list the most mining companies in the world and are the number one sources of equity capital raised by mining players. In 2012, the two exchanges accounted for 70% of the equity capital raised globally for mining companies. More than Cdn$280bn of mining equity was traded on the exchanges last year.

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