GOLD mining firms listed on the Toronto Stock Exchange are considering secondary listings in London after an increase in the price of bullion increased investment appetite, especially among generalist funds, said Reuters.
The gold price has soared 32% this year as central banks dial up stimulus measures in response to the Covid-19 pandemic. That has fuelled a cash surge for miners, who have hiked dividends and pledged cost discipline to broaden their appeal beyond a shrinking pool of resource-only investors, Reuters said.
London has space for new gold mining firms following the merger of Barrick Gold with Randgold Resources which subsequently saw the removal of Randgold from the UK’s investment radar. There is also a better understanding for the risk posed by gold mining firms operating in Africa, said Reuters citing an analyst. “That’s an unquantifiable aspect that I think is driving London,” he said.
Endeavour Mining, which operates in Burkina Faso and Mali, is considering a secondary listing either in London or New York whilst Resolute Mining, which works in Mali, recently completed a secondary London listing.
“There is a lot of dumb money sloshing around in London in the mining space, and the gold miners want to soak it up,” Henry Steel, a London-based portfolio manager at Odey Asset Management told Reuters.
Canada’s Yamana Gold said it had applied for a secondary listing on the London Stock Exchange, which it said lacked sizeable pure-play gold producers with annual production of one million ounces or more. There is “a good hand-to-glove fit of what is being looked for by investors and what we can offer,” said Peter Marrone, executive chairman of Yamana.