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More than a 100 Canadian mining companies are listed on the Frankfurt Stock Exchange, which offers a cheap, easy way to gain exposure for a junior.
By Karan Kumar – Exclusive to Resource Investing News
Most companies that seek a listing in Frankfurt are “listed in the second quotation board of our open market, which means that their home market is on some other stock exchange,” said Letitia Adam, a spokeswoman for Deutsche Boerse AG, which runs the Frankfurt Stock Exchange.
A second listing on the Frankfurt Stock Exchange can happen extremely fast, sometimes even within a week and affordably, experts say. Marvin Rowe, managing director of Go Public Pros GmbH in Berlin, told Resource Investing News: “Yes, a listing on the Frankfurt is actually very fast and simple, especially compared to the TSX and other exchanges. For example, we, in conjunction with our law firm, list companies in a matter of weeks. The process of listing is quite easy.”
A listing on the second quotation board costs about 20,000 euros in total, not counting a prospectus if a company wants that, Rowe said, adding that it only takes a week “It is very easy and affordable.”
The 102 Canadian miners listed in Frankfurt include the following: Commerce Resources (TSXV:CCE,OTCQX:CMRZF,FWB:D7H), a Vancouver-based tantalum and rare earth exploration firm, Anvil Mining Ltd. (TSX:AVM,ASX:AVM,FWB:FBJA), a copper producer with offices in Canada, Australia, South Africa and the Democratic Republic of Congo. Others include Avino Silver & Gold Mines (TSXV:ASM,OTCBB:ASGMF,FWB:GV6), a gold and silver exploration company with projects in Mexico and Woulfe Mining (TSXV:WOF,OTCQX:WFEMF,FWB:OZ4) a Canadian-based exploration company with a tungsten project in South Korea, listed on the Toronto, Frankfurt and American stock exchanges.
The basic inclusion criteria for a listing in Frankfurt, according to Deutsche Boerse, is an application with an accurate designation of the security to be listed and information as to the domestic or foreign market where prices are already fixed for the shares. In addition, the application must be submitted in written form by a company already admitted to trading at the Frankfurt Stock Exchange.
“The most important question our clients ask is ‘can I raise money on the Frankfurt Stock Exchange?’ The short answer is, ‘yes’, but… investors only invest in companies because they like the company and think the rewards far outweigh the risk. We find that it is easier to raise money in Europe than in the US, for example.”
While a listing is easy, “the hard part begins after the listing, and that is where we find that our clients need the most help,” Rowe said. “The way we deal with the ‘unknown’ for our clients is that we remain on as advisors and partners well after the listing to help with everything. So does our law firm, FSE Law GmbH. I suppose if it were not for this, it might be a fairly daunting task.”
Rowe added that since 2006, about 127 Canadian companies have listed in Frankfurt, with 56 in 2011 alone. “Listings have definitely picked up recently for Canadian companies of all kinds. Frankfurt listings give companies fantastic exposure.”
Rowe said the Frankfurt Stock Exchange has massive exposure to investor capital with greater than 250 international trading institutions and more than 4,500 traders worldwide. “Investors directly connected to trading on the Frankfurt Stock Exchange represent a full 35 percent of the world’s investment capital.”
In addition, a listing in Frankfurt gives a company “the ability to reach the huge European investor market” and provides opportunities to “greatly expand the ability to raise equity or debt financing.”