Junior Mining Sector Responds to Predatory Short Selling; Launches “Save Canadian Mining”
Toronto, Ontario–(Newsfile Corp. – November 18, 2019) – Today Terry Lynch, CEO of ChileanMetals Inc. launched Save Canadian Mining (“SCM”) – an advocacy group created to give voice to the specific interests of Canada’s junior mining sector. SCM will work to raise awareness for this important segment of the country’s economy and advocate for positive change on their behalf with government and regulatory agencies. Specifically, the campaign will be lobbying for revisions to existing marketplace rules and regulations that have created severe challenges for junior public companies in the sector.
“The current rules in our equity markets have created an environment for predatory short selling practices to thrive, particularly on our vulnerable junior markets,” said Mr. Lynch. “For smaller cap mining companies, short selling activity spooks true investors into selling prematurely,effectively stunting the growth of these businesses at critical early stages. Save Canadian Mining is dedicated to helping ensure Canada’s capital markets remain viable for junior miners now and into the future.
In 2012, the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Securities Administrators (CSA) removed a 142-year securities trading rule known as the “ticktest.” The tick test restricted short selling to positive price changes at the time of the sale (i.e., an investor could only short a stock if it was on an upward trajectory). This change was applied not only to the main listing venue of the TSX Venture Exchange, but was equally applied across all Canadian trading venues of which there are 14 today. Since the removal of the tick test,Canadian markets have evolved, and there now exists a dynamic where Canada’s junior market sare finding it increasingly difficult to raise capital.
“Short selling activities have increased in the junior mining market since 2012,” said Lynch.”The advent of high frequency trading and algorithmic trading are exploiting the combination ofa lack of a tick test, with 14 different trading markets to the detriment of one of Canada’s most important industries.”
SCM plans to meet with government in the coming weeks to share the stories of many small businesses in the mining sector. The organization will also be sharing its desired regulatory amendments with government and the OSC for consideration shortly.
SCM has already attracted the support of many prominent voices in the mining and investment community, including: Brady Fletcher, Managing Director, and Head of the TSX Venture Exchange; Eric Sprott of Sprott Mining; Garry Clark, Executive Director of the Ontario Prospectors Association (OPA); and Chris Hodgson, President, Ontario Mining Association.
“The practice of short-selling plays a role in maintaining a healthy, efficient market. However,TSX Venture Exchange understands that certain changes to market operations in Canada,specifically related to the removal of the tick test, may have had unintended negative consequences for our junior, or more illiquid issuers,” said Brady Fletcher Managing Director,Head of TSX Venture Exchange. “We look forward to working with Save Canadian Mining and industry stakeholders to engage Canada’s regulators in evaluating the reinstatement of a tick test,and in pursuit of continued improvements to our globally unique venture market, many of which were tabled for discussion in our 2019 Trading Roundtable report available athttps://www.tsx.com/resource/en/2011/.”
“As an active investor in the mining sector, I recognize the need to reinstate the tick test rule.Save Canadian Mining is providing leadership for the junior mining community during an important time. Regulations need to change and this campaign is going to help achieve those changes.” – Eric Sprott, CEO, Sprott Mining Ltd.
“The Ontario Prospectors Association (OPA) is supporting Save Canadian Mining in its mission to work with regulators to make some very specific changes to the investment landscape for junior miners in Ontario and Canada.” – Garry Clark, Executive Director of the Ontario Prospectors Association.
Broad support for the initiative is reflected in the following quotes from prominent industry representatives:
“The Ontario Mining Association (OMA) supports Save Canadian Mining. We understand that as trong mining sector depends on the ability of junior miners to attract investment and grow into larger Canadian companies. We are pleased to see campaigns like this emerge to ensure the health of the sector.” – Chris Hodgson, President of the Ontario Mining Association
“As the CEO of a junior mining and exploration company, I am very encouraged by this announcement. It is becoming increasing difficult for companies like ours to raise the capital required to become successful in Canada and we fully support Save Canadian Mining.” – Wayne Tisdale, CEO, 21c Metals Inc.
“Capital formation is an integral part of company building. It provides the resources necessary to hire labour, purchase equipment, and de-risk projects,” said Daniel Barankin, CEO of 6ix and afounder of Save Canadian Mining. “The restoration of the tick test rule will make Canadian companies more competitive.”
Save Canadian Mining Inc.
Cell (647) 448 8044
Office (647) 649-7283