As global markets continue to suffer through uncertainties and turmoil, many mining companies have turned their eyes to Canada to raise funds. Canadian markets are a viable and prolific source of funding for foreign mining companies, particularly for those aware of the advantages Canadian stock markets present over their local stock exchanges. Many of these foreign companies are turning to Vancouver-based professional services companies in search of mining finance expertise, creating an often unseen but nonetheless lucrative economic opportunity for Vancouver professionals.
Over the past five to seven years, we at Lawson Lundell have seized on this opportunity, and have assisted numerous exploration and early-stage development companies with their fundraising needs, even though they are not Vancouver-based. As the global marketplace in effect shrinks, we increasingly act for foreign companies, including a substantial number of management teams based in Australia's mining capital of Perth. This is currently a very active practice area for us, with four new listings underway from Perth-based management teams.
One of the great strengths of Canadian capital markets is that that they will support a mining project based on an assessment of its geological merit and political risk, regardless of where it is located. The local stock markets in many countries, including Australia, often fail to support companies with projects based in far-flung regions of the planet. Other internationally-minded stock exchanges, such as the London Stock Exchange, tend to be successful capital-raising venues for only the biggest companies.
As a result, the Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSXV) are attractive to mining companies from across the world. Offering unrivalled sector expertise, the two exchanges have the most diversified roster of public mining companies by commodity and stage of development. Mining companies listing on the TSX benefit from experienced mining analysts, specialized indices, flexibility and tailoring of listing requirements not offered by any other global exchange.
In 2010, more mining companies were listed on the TSX and TSXV than any other market in the world, with 60% of the world's mining equity capital - totalling $17.8 billion - being raised on these two exchanges alone. In comparison, its nearest rival, London's sub-market AIM exchange, raised only 7.5% of the mining world's equity financing. This strong gravitation towards the Canadian exchanges has continued unabated in 2011, with 123 mining companies listed in Canada by July.
A substantial number of foreign mining companies are coming to Vancouver for the professional services and merchant banking advice they require for their financing. These companies are often headquartered abroad, and are raising funds for exploration, surveys, feasibility studies and the development of projects mainly outside of B.C. In fact, 50% of more than 9,500 mineral exploration projects held by TSX and TSXV companies are outside of Canada. However, a significant volume of this professional and banking work is being channelled through Vancouver, which is a facet of the economy that many in our city are unaware of.
Companies are attracted to Vancouver for its reputation as one of the world's pre-eminent mining centres, and numerous leading mining companies are headquartered here. For many of the almost 40 Australasian companies listed on the TSX and TSXV, Vancouver's professional advisors offer another more practical advantage over competitors in Toronto: a more amenable time zone. Being in the Pacific time zone, several hours of the workday overlap with mining clients based in Western Australia, facilitating better client service.
For gold mining companies in particular, the current market turmoil is a blessing. It has resulted in a spike in the price of gold and increased demand for their shares. Many copper producers (and those nearing production) have also seen rising demand for their shares. However, the ability of companies to raise financing in the current markets is commodity specific. For example, uranium producers have faced great challenges in the aftermath of Japan's Fukushima disaster earlier this year.
Despite the market challenges facing other industries, the mining sector appears to be weathering the storm well. For the Canadian exchanges and Vancouver-based advisors in particular, their in-depth mining expertise has become a commodity of its own, and is more attractive than ever to foreign mining companies looking to finance current operations and future growth. Indeed, it would be fair to say that mining finance remains one of Canada's great exports, and one of Vancouver's competitive advantages.
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