Listing

Requirements Regarding Control Over Mining Assets

A mineral company seeking listing on the Exchange must be able to demonstrate that it has the right to actively participate in the exploration for and / or extraction of resources either through:

  • 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. This will normally be interpreted as an interest of more than 50%; or
  • Adequate rights arising under arrangements acceptable to the Exchange, which give it sufficient influence in decisions over the exploration for and/or extraction of the resources. Arrangements which may be acceptable include joint ventures, production sharing contracts or specific government mandates.

As mineral assets are often held under complex holding structures and/or are located in jurisdictions where the relevant national mining legislation contains restrictions on control over the assets including restrictions on foreign ownership, and of which the Exchange could not be expected to be familiar, it is essential to clearly establish for the benefit of the Exchange and for prospective investors alike that the mineral company has control over a majority (by value) of the assets and adequate rights arising under arrangements acceptable to the Exchange, which give it sufficient influence in decisions over the exploration for and/or extraction of the resources.

For the avoidance of doubt, and to save any unnecessary complications further along in the listing process, Charltons recommends that mineral companies or their sponsors describe how the mineral company enjoys control over a majority (by value) of the assets in which it has invested and adequate rights they exercise over mineral assets in pre-listing preliminary submission(s) to the Exchange to ascertain whether or not the Exchange is of the view that the mineral company is possessed of the aforementioned rights and is a suitable candidate for listing.

Information should be provided on the structure and local licensing regime under which the assets are held. Although not required at the pre-application stage, a legal opinion from counsel in the jurisdictions where the underlying assets are located should be included with the submission if available. Other documentation containing information on local mining laws or describing how the mining assets are held (or extracts thereof) can also be provided as part of the submission.

Charltons is experienced in making pre-application submissions to the Exchange to explain both the control and adequate rights the mineral company has over mineral assets. We are further experienced in liaising with local counsel as required and in making follow-up presentations to representatives of the Exchange's listing committee.