By Kizito CUDJOE
The Ghana Stock Exchange (GSE) is poised to welcome a new mining venture to the market before the end of the first quarter of 2024.
This move reflects the Exchange’s strategic push to diversify its portfolio and enhance investment opportunities in collaboration with both local and international mining ventures, and likewise bolster ongoing efforts to promote local ownership of the country’s mineral resources.
According to the Head of Listings and New Products at GSE, Joyce Esi Boakye, discussions with the company, with Australian origins, are progressing significantly.
Already, she said some mining companies, including Asante Gold Corporation and AngloGold Ashanti Plc, are listed on the market, with others still undergoing the various stages of processes to also join the market.
In an exclusive conversation with the B&FT in Accra, Mrs. Boakye said: “As an exchange, our goal is to create a platform for the raising of capital and trading,” while underlining the importance of transparency to build public confidence in business activities.
The move to encourage miners to float shares on the stock market follows a Legislative Instrument (LI) 2431, which requires mineral rights holders (mining companies) to list at least 20 percent of their equity on the GSE.
This requirement applies to mining companies with planned expenditure exceeding a determined limit within five years after the commencement of mining operations.
Further to this requirement, the Minerals Commission (MinCom) and the GSE have developed draft guidelines (the Draft Guidelines) to, among other things, prescribe the limits of capital expenditure which, when met, would trigger the listing requirement under LI 2431.
As cited by Bentsi-Enchill, Letsa & Ankoma, “Under the Draft Guidelines, the listing requirement would apply to mining companies that have been in operation for over 5 years. The Draft Guidelines set the threshold of capital expenditure at US$100,000,000”.
Accordingly, any mining company that has been operating for more than five years and whose planned capital expenditure for ensuing years matches or exceeds the US$100,000,000 threshold would be required to list at least 20 percent of its shares on the GSE, in accordance with LI 2431.
To determine the capital expenditure of mining companies, firms are required to annually assess a forecast of their planned capital expenditure over a period of five years with a prescribed start date of 1 January of the ensuing year. The assessment must be submitted to MinCom by March each year.
Meanwhile, the Head of Listings and New Products at GSE also mentioned that her outfit has signed a Memorandum of Understanding (MoU) with Minerals Income Investment Fund (MIIF) toward establishing a practical framework for the development of stronger business relations between the two parties.
The MoU also sets forth the procedures to create an asset class and promote trade in mineral securities on any of GSE’s markets.
As part of the collaboration, MIIF is expected to recommend all mining companies in which it has equity investments for listing on the GSE. Furthermore, MIIF will develop a sustainable mining programme for small-scale miners that will provide feedstock, certified gold, for an Exchange Traded Fund.
It is understood that GSE, among other things, will make available its platforms for companies working with MIIF to access capital from any of its markets.
MIIF will also lead the education and sensitisation of market players on some mineral asset classes to be created while the GSE will provide technical assistance in the development of a gold-backed ETF or other mineral-backed ETFs.
The Ghana Chamber of Mines (GCM) has already expressed its willingness to support member-companies seeking to raise capital through the GSE.
