VANCOUVER: A doubling in zinc prices since late 2015 and strong outlook for the commodity has fueled a flurry of zinc miner listings on the Toronto Stock Exchange as companies cash in on investor demand for producers of the metal.
Brazil-based Nexa Resources, a top five global zinc producer, is seeking to raise up to $651 million in an initial public offering in Toronto and New York in what would be the world's biggest zinc-focused IPO since China's Western Mining Co Ltd in 2007, according to Thomson Reuters data.
At least three other zinc miners, including Titan Mining and Dublin-based Group Eleven Resources Corp, are planning listings on the Toronto Stock Exchange or the TSX Venture Exchange (TSX-V) market for small start-ups, according to company filings.
That comes on top of six small listings this year on the Toronto markets, home to more than half of the world's public mining companies.
"Zinc is a hot commodity right now and people are looking for ways to play the zinc market," said Richard Warke, chief executive of Titan Mining, which wants to raise C$45 million ($36 million) in an IPO.
"It is very slim pickings in the zinc space," he said, referring to the dearth of pure-play zinc producers. The metal, used to rust-proof steel and protect noses from sunburn, is often a byproduct of silver and other mines.
Titan expects to list on the TSX this month and plans to use the funds to restart the idled Empire State zinc mine in New York.
Zinc prices last week hit a decade high of $3,308.75 per tonne and have doubled since end-2015 after several large mines shut down. Prices were last at C$3,238 a tonne.
BMI Research forecasts a global refined zinc shortage of 204,000 tonnes this year and 313,000 tonnes by 2019, with prices averaging $2,800 a tonne in 2018 and $2,900 in 2020 and 2021.
Trevali Mining Corp, the TSX's only pure-play producer, is up 300 percent this year. Australia's New Century Resources has surged 200 percent since its July listing.
Group Eleven, which has zinc projects in Ireland, wants to raise up to C$10 million in an IPO, according to a filing.
Wangton Capital Corp, a shell company, plans to change its name to Euro Zinc Mining Corp and list as an exploration company on the TSX-V, it said on Sept. 25.
Yukon Zinc, which owns the shuttered Wolverine zinc mine in Canada's Yukon, is considering an IPO, two sources familiar with the talks said. Company spokesman Alex Wu said it has no "immediate plan" for an IPO.
"When I look across the base metals complex - copper, zinc, nickel - zinc is by far the commodity that excites me the most because of the supply-side constraints," said Jason Mayer, senior portfolio manager at Sprott Asset Management.
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