Key Requirements for Listing
The key requirements for listing on the Main Board of the Exchange by a mineral company are as follows:
The mineral company must have:
- A trading record of not less than three financial years,
- Management continuity for the last three financial years,
- Ownership continuity for at least the most recent audited financial year, and
- One of the following:
A profit in the most recent year of not less than HK$20 million, and in respect of the previous two years, an aggregate profit of not less than HK$30 million (such profits to exclude any income or loss generated by activities outside the ordinary and usual course of the business or by associated companies or entities whose results are recorded in the company's accounts using the equity method of accounting);
Market capitalisation/revenue/cash flow test:
A market capitalisation of at least HK$2 billion, revenue of at least HK$500 million in the most recent financial year, and positive cash flow of at least HK$100 million in aggregate in the last three years; or
Market capitalisation/revenue test:
A market capitalisation of at least HK$4 billion and revenue of at least HK$500 million in the most recent financial year, and at least 1,000 shareholders at the time of listing.
- If a mineral company is unable to satisfy the track record or financial requirements described above, it may still apply to be listed if it can establish to the Exchange's satisfaction that its directors and senior managers, taken together, have sufficient experience relevant to the exploration and/or extraction activity that the mineral company is pursuing. Individuals relied on must have a minimum of five years' industry experience.
- A mineral company must establish to the Exchange's satisfaction that it has the right to participate actively in the exploration and/or extraction of natural resources either through control over a majority of the assets in which it has invested together with adequate rights over the exploration for and/or extraction of natural resources, or through adequate rights which give it sufficient influence in decisions over the exploration for and/or extraction of the natural resources.
- A mineral company must establish to the Exchange's satisfaction that it has at least a portfolio of indicated resources or contingent resources identifiable under a recognised reporting standard (such as the JORC or SAMREC Codes) and substantiated in a report prepared by a suitably qualified person ("Competent Person's Report").
- A mineral company must demonstrate to the Exchange's satisfaction that it has available working capital for 125% of the group's present requirements, that is, for at least the next 12 months, which must include general, administrative and operating costs, property holding costs and costs of any proposed exploration and/or development.
- If a mineral company has not yet begun production, it must disclose its plans to proceed to production with indicative dates and costs. These plans must be supported by at least a scoping study, substantiated by the opinion of a Competent Person.
- A mineral company must ensure that any estimates of mineral reserves disclosed are supported, at a minimum, by a pre-feasibility study.
For further details on the listing of mineral companies on the Exchange please refer to our note "Introduction to the Main Board and GEM Listing Rules for mineral companies"