JOHANNESBURG (miningweekly.com) – The JSE has a new product that is suitable for fundraising by junior mining companies, JSE origination and transaction manager Sam Mokorosi said Friday.
Mokorosi, who was speaking at the Minerals Council South Africa’s Junior and Emerging Miners Desk webinar, highlighted the new product against the backdrop of the JSE’s drive to reverse the low number of junior mining company listings on the purse, which worried her a great deal. (Also watch the attached video from Creamer Media.)
He pointed to the new product in response to a comment from the CEO of the Council for Geosciences Mosa Mabuza that even though the future of South African mining was junior, the country had not made it easy for juniors to list on the stock market.
“It would be amazing if we could start seeing IPOs in our own JSE that would be led by junior miners, which would also be based on the quality of the asset that we would be able to delineate in the next few weeks, months and years,” Mabuza said.
With the tremendous growth in capital formation in the unlisted private market since the global financial crisis of 2008, many stock exchanges around the world, including the Nasdaq private markets, have begun to help unlisted companies raise capital. .
“We are focused on the SMME ecosystem and how we as JSEs can help build capital in this world,” Mokorosi said.
The new JSE private placement platform currently has 15 companies raising capital of R3 billion.
“We also have investors on the platform, including major institutions like Sanlam, Old Mutual and Momentum, as well as private equity funds, venture capital, BEE investment firms and high net worth investors.
“We’ve created this ecosystem that says please come to the JSE private placement for your fundraiser if the registration route isn’t right for you at this point,” Mokorosi told the webinar covered by Weekly mining.
The process has been designed to be as simple as possible and allow the fundraising process to take place as quickly as possible.
“As a junior miner, you would come to us, we would figure out why you are looking to fundraise, do all the FICA checks, and then place the fundraiser on our platform.
“We have setup fees that are between R20,000 and R100,000, depending on how much you raise. By paying this setup fee, the deal goes live and within two weeks we will put you in front of quantified investors who understand your deal,” Mokorosi added.
This opens up an opportunity for the JSE to enter the private equity and debt market in South Africa and across the continent.
The Minerals Council’s Junior and Emerging Miners Desk program represents 38 junior and intermediate producers and exploration/development companies.
In addition, the desk works in close collaboration with mining associations, in particular the South African Diamond Producers Organization (Sadpo) and the Clay Brick Association.
Junior mining and exploration have been identified as key elements in the development and conduct of the entire mining sector.
The release of the Exploration Strategy and Implementation Plan by the Ministry of Mineral Resources and Energy in April highlighted the need to increase exploration to 5% of all global exploration dollars in over the next five-year period.
Chaired by the Junior and Emerging Miners Office Manager Grant Mitchellwebinar panelists and speakers included Orion Minerals and Junior Office Chairman Errol smartIndustrial Development Corporation Mining Industry Champion Kevin HodgesSadpo CEO Yamkela MakupulaTrimble Director of Natural Resources Bill FeastCEO of Lethabo Exploration Mandy Malebeand CEO of ChromTech Jono Gay.
The Toronto Stock Exchange has 1,600 small cap mining companies and the Sydney Stock Exchange 600 compared to the tiny sub-ten of the JSE.