The CEO of a newly-listed gold mining company said the future lies in Toronto or New York. More precious metals miner are now listing their shares on Toronto or New York instead of London Stock Exchange.
Allied Gold is an Africa-focused gold producer that listed in Canada Monday after a reverse takeover. The company raised $267mn, the largest mining IPO in Canada since 2010, with a C$1.3bn market capitalisation ($970mn on the first trading day).
Peter Marrone has been the chair and chief executive officer of Allied Gold, since April. He said that Allied Gold had considered listing in London around 18 months ago. However, it is most likely to opt for a New York route via Toronto.
“New York is an interesting place.” In an interview, he stated that there is money in New York that is multiples of what you find in other parts of the world. “In the precious-metals world, they’re becoming more comfortable with emerging markets.”
Toronto-based Allied Gold has changed its listing plans after Johannesburg-based AngloGold Ashanti, announced in May that it would switch to New York as a primary listing in order to achieve a higher value underpinned by Allied Gold’s large pool investors on the US east coast.
London has been the home of Russian gold producers for many years, but Polymetal and Polyus were forced to delist their products following sanctions imposed by the west in response to Russia’s invasion of Ukraine. Randgold, which merged with Barrick Gold in 2018, left the UK and was replaced by a few large-scale gold producers.
London’s declining ability to attract new companies isn’t limited to gold-miners. London-listed firms that are facing large valuation gaps are turning to the US. Washington’s green tax incentive is also appealing to the New York Market.
Smurfit Kappa, a paper manufacturer in Ireland that is moving to the US as its primary listing, and Arm, a UK-based chip maker who chose a New York IPO are among those companies choosing a US listing. WeSoda (which produces soda ash) in Turkey pulled out of a £7.5bn London IPO this year.
London is the traditional home of natural resource companies that produce in Africa. However, Marrone says that investors are becoming more cautious about the risks associated with emerging markets.
“In the past, Europe had a greater focus on Africa, emerging markets in Asia, and certain parts of Europe. I believe the American portfolio managers are now catching up to this.” He said, “I think the landscape is shifting.”
Marrone was the former chairperson of Canada’s Yamana Gold. Yamana Gold added a secondary London IPO in 2020, before it was sold to two rivals last year for $4.2bn.
Allied Gold produces about 375,000 troy ounces of gold per year from its three mines located in Mali and Ivory Coast. Marrone wants to increase production to 700,000 ounces in six years by investing $500mn into the Kurmuk Project in Ethiopia. The company hopes to triple its core earnings in that time from $200mn up to $600mn.
Marrone said that he would look at mergers and acquisitions opportunities to build a goldmine portfolio in emerging markets. This could include partnering up with competitors to purchase larger rivals and split their assets.
He said he would like to reach a platform that is 1mn to 1,5mn ounces a year, with inclination towards emerging markets.