Canada’s Mining Sector 101

A mining company is any company that owns, manages, or derives a significant portion of its revenue from mines. A mining company may be involved in the extraction of a valuable mineral or a geological material from the earth. Miners may extract many things, including gold, diamonds, zinc or coal.

Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) offer investors a diversified roster of public mining companies. In fact, Canadian stock exchanges are home to around half of the world’s mining companies.

Canada is a Natural Choice for Miners

The TSX and TSXV exchanges are a natural home for the world’s mining industry. Companies are able to access a large capital pool and attract a sophisticated investor base with an appetite for mining exposure. From 2000 through 2020, 300 mining companies graduated from the TSXV exchange to the TSX exchange which implies long-term investors were rewarded with strong returns.

The TSX and TSXV exchanges are home to more mining companies than any other market in the world. Source: TMX ‘2021 Guide to Listing, page 20

While Canada is known for its strong mining industry, 47% of the 5,200 mineral exploration projects operated by a TSX or TSXV listed company takes place outside of Canada. In addition, 37% of all global mining equity capital was raised by TSX and TSXV-listed companies.

Over the past five years, Canadian-listed mining companies raised $44 billion as part of 7,000 financing deals. By contrast, the Australian ASX exchange ranked second at $27.2 billion in capital raised over the past five years.

Company Profile: Barrick Gold

Barrick Gold ranks as one of Canada’s most valuable mining companies, with a market capitalization of around C$60 billion. The company rewarded loyal shareholders with a regular quarterly dividend of US$0.09 on top of a special dividend of US$750 million. Combined, Barrick Gold returned a record high US$1.4 billion during 2021.

Company Profile: Franco-Nevada

Franco-Nevada was valued at around $35 billion towards the end of 2021. Unlike a traditional mining company, Franco-Nevada does not operate mines, rather it generates revenue through royalties and investments in other mines. This allows management to focus on the company’s growth instead of the day-to-day responsibilities of managing a mine.

Company Profile: Newmont

Newmont Corporation boasts a market capitalization of around C$58 billion as of November 2021. Newmont is also the world’s leading gold company and the sole gold producer in the American S&P 500^Ⓡ Index.

On Oct. 29, 2021 the company announced a 38% year-over-year increase to its quarterly dividend at US$0.55 per share. The payout implies a yield of around 4% which ranks it as the top dividend payer within the entire gold industry and among the top 10% of S&P 500 large-cap dividend payers.

Company Profile: Nutrien

Valued at around C$48 billion, Nutrien ranks among Canada’s largest mining companies by market capitalization. The company is the world’s largest provider of crop inputs and services, and is responsible for producing and distributing 25 million tonnes of potash, nitrogen, and phosphate products across the world.

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Originally Posted November 8, 2021 – Canada’s Mining Sector 101

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