Obtaining a Secondary Listing 
on the TSX is now a Viable Option

Many mining companies listed on non-Canadian exchanges have investigated the possibility of obtaining a secondary listing on the Toronto Stock Exchange.  Often, they have been discouraged from doing so on the basis that their shares would be "foreign property" to Canadian pension plans and other tax-exempt savings vehicles (primarily, so-called "registered retirement savings plans" or "RRSPs").  Generally, these pension plans and RRSPs, which comprise a large segment of the Canadian market, may only invest 30% of their assets in foreign property. 

In the past, the only way in which companies could avoid their shares being foreign property was  for them to redomicile to Canada (i.e.. become a Canadian incorporated company).  This generally involves a complex and expensive reorganisation which, among other consequences, brought the company fully into the Canadian income tax net.

The Canadian federal budget released last week (on February 23, 2005) has eliminated the foreign property restrictions for these plans, effective immediately.  Thus, pension plans and RRSPs can now invest all of their assets in mining companies provided their shares are listed on the Toronto Stock Exchange or certain other enumerated exchanges, including the London Stock Exchange, most major US exchanges and various other exchanges around the world.  However, it is noteworthy that shares listed on AIM are not considered to be listed on the London Stock Exchange and are therefore not qualified investments for pension plans and RRSPs. 

By obtaining a secondary listing on the Toronto Stock Exchange, AIM-listed mining companies can now have full access to the investment capital of Canadian pension plans and RRSPs.  Mining companies listed on other enumerated exchanges such as the JSE Securities Exchange, South Africa and the Australian Stock Exchange also now have full access to the investment capital of these plans.

The London office of Stikeman Elliot has been specialising in cross-border issues since 1969.  With 13 lawyers in London, the firm has by far the biggest office of any Canadian law firm in the City.  The London practice includes a team of six lawyers focused on mining and mining finance. 

Stikeman Elliott LLP's Global Mining Group is recognized as one of the best in Canada. The Canadian Legal LEXPERT Directory (2004) describes Stikeman Elliott LLP as "consistently recommended" for mining law. Jay Kellerman, head of our Mining Group, is recognized by LEXPERT as a "most frequently recommended" lawyer for mining law, is listed in LEXPERT/American Lawyer's The Leading 500 Lawyers in Canada (2004) for mining, and is cited as a leading lawyer in the energy/natural resources field by the London-based Guide to the World's Leading Energy & Natural Resources Lawyers (2003). Partners Jay Kellerman (Toronto), Michael Allen (London) and Derek Linfield (London) are all listed in The International Who's Who of Mining Lawyers (2005) as among the world's leading mining practitioners. Martin Byatt (London) has appeared as a leading expert in mining and oil and gas in Chambers Global Guide to the World’s Leading Lawyers, in the Legal 500 and in the Euromoney’s Guide to the World’s Leading Energy and Natural Resource Lawyers.