The 2017 Prospectors & Developers Association of Canada (PDAC) conference wrapped up last week, and it’s safe to say attendees were much more positive than they have been in the last few years.
But is that optimism justified? Some investors are concerned that it isn’t, and perhaps for good reason — after all, given the political and economic uncertainty in the world today, it’s certainly possible that the resource space could do an about face.
Luckily there’s increasing evidence that the recovery is secure. Speaking to the Investing News Network at PDAC, Chris King, vice president, international corporate services, at OTC Markets Group, said he’s seen a few encouraging signs.
“We are seeing a significant increase in the number of resource companies coming to the market,” he said, noting that currently there are 1,500 resource companies listed on the OTCQX, OTCQB and OTC Pink exchanges.
All three exchanges are administered by OTC Markets Group, a platform that allows US broker-dealers to execute trades in about 10,000 securities. The OTCQX is the top tier, while the OTCQB and OTC Pink are the middle and bottom tiers.
What’s even more noteworthy is that those resource companies are performing well. “We’re seeing considerably improved performance as a sector,” said King. In fact, he said, about half of the companies on this year’s OTCQX Best 50 Companies list are resource companies.
Released annually, the list is a ranking of the top 50 companies on the exchange based on a variety of factors. This year’s list was topped by Cordoba Minerals (TSXV:CDB,OTCQX:CDBMF), which is focused on its copper–gold San Matias project in Colombia.
King is pleased to see the influx of resource companies on the OTC exchanges, and believes listing on the exchanges can be beneficial, particularly for companies looking to attract US investors.
“As the marketplace what we encourage companies to do is to take advantage of everything that’s available to them,” he said. “What I mean by that is if you’re already public — if you’re on the CSE or the TSX or the Venture — the reality is that your financials are in the local market … your news is not naturally disseminating to where US investors carry out their research.”
He added, “[for example,] if you’re a SEDAR filer, you’re producing financials and news that is in the Canadian format. As part of the QB and QX listing … we’re able to convert that into the US format and push that out into the areas in which investors do their research.”
In 2017, OTC Markets Group will continue to build out its offerings on the OTCQX and OTCQB exchanges. “[Initiatives] include increased exposure, increased visibility to a broader audience. Last year we introduced the Morningstar research element of the listing,” said King.
He also commented that investors may see more cannabis companies list on the three OTC exchanges this year. “There’s significant demand from cannabis companies looking to gain access to capital, raise money, become public,” he said. “On the flip side of that … it’s of interest to a lot of people who want to trade [cannabis stocks].”
Overall, 2017 looks set to be an exciting year for OTC Markets Group. “We encourage companies to take ownership … of their US ticker, and by doing so they see far more success,” King said.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in contributed article. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.