Advising on Requirements for Listing

Charltons advises mineral companies on the listing criteria for both the Main Board and the Growth Enterprise Market of the Hong Kong Stock Exchange (“Exchange”). In 2010 the Exchange updated its requirements for listing mineral and petroleum companies.  The updated requirements aim to encourage more listing by mineral companies in Hong Kong by providing investors with a framework of material, relevant and reliable information, and by aligning the Exchange’s rules with global standards.

Under the Listing Rules, a company is defined as a mineral company if its major activity (i.e. an activity representing 25% or more of the total assets, gross revenue or operating expenses of the applicant and its subsidiaries) (“Major Activity”) is the exploration for and/or extraction of natural resources. An existing listed  company will be considered to be a mineral company if it engages in a major acquisition (i.e. 25% or greater of existing activities) of mineral or petroleum assets.

A mineral company can seek to list by meeting one of the financial track record requirements ("Track Record Tests") set out under Rule 8.05 of the Listing Rules. A mineral company that cannot satisfy one of Track Record Tests (exploration and pre-production stage companies) may still apply to be listed if it can establish that the combined experience of its directors and senior managers is sufficient and relevant to the exploration for and/or extraction activity that the applicant is pursuing, The applicant will also be required to have at least a portfolio of "Indicated Resources" (in the case of minerals) or "Contingent Resources" (in the case of petroleum) that are identifiable under one of the accepted reporting standards and substantiated in the report of an independent suitably qualified expert. Applicants should also have control over a majority (by value) of the assets in which it has invested together with adequate rights over the exploration for and / or extraction of resources which give it sufficient influence in decisions over the exploration for and/or extraction of the resources.