Barrick Mining Corp. ABX-T has chosen the United States over Canada as the site of its primary stock listing for its coming North American spinoff, dealing a blow to Canada’s capital markets.
Later this year, Barrick plans to spin off a stake of between 10 to 15 per cent in its North American mines, including its promising Fourmile discovery in Nevada.
In a press release on Tuesday the company said that the new standalone unit, North American Barrick, is expected to have its primary listing in New York, with a secondary listing in Toronto.
It is unclear where North American Barrick will be domiciled.
George Joannou, chief development officer with Barrick, declined to comment on the matter.
Bay street veteran Tom Caldwell, chairman of Caldwell Securities Ltd. and past governor of the Toronto Stock Exchange, said that Barrick’s choice of the U.S. over Canada for the listing is a sign this country’s capital markets are in decline.
“You want to get as full a valuation on your shares as you can,” he said in an interview. “If that’s the case, you almost have to go to New York, patriotism aside, legacy and history aside.”
Canadian capital markets have been in “a significant decline for a long period of time,” he said, citing a long list of former Canadian mining champions that have been acquired by foreign buyers, and excess regulation in this country, which he says is at the heart of the problem.
“We used to be the mining exchange for North America,“ he said. ”The ecosystem is no longer there.”
Should Barrick choose to base its North American spinoff in the U.S., it may still qualify for inclusion in Canada’s major stock market indexes.
S&P Dow Jones Indices earlier this month said it is considering foreign companies for inclusion in major Canadian indexes, as long as they are listed in Canada, and meet criteria around liquidity and size. Under the current rules, companies have to be domiciled and incorporated in Canada to be included in the index.
S&P DJI floated the issue after both Anglo American PLC NGLOY and Teck Resources Ltd. TECK-B-T lobbied to modify the rules in an attempt to keep the merged company in the S&P/TSX 60. Teck last September agreed to be acquired by Anglo with the deal expected to close either later this year, or early next year.
Anglo, which is incorporated in Britain, has committed to a secondary listing of “Anglo Teck” in Canada, with the primary listing in London.
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Some large international mining companies set up secondary listings in Canada in the past only to pull them at a later date.
Colorado-based Newmont Corp., a joint venture partner of Barrick’s in many of its North American operations, created a secondary listing on the Toronto Stock Exchange after it acquired Canada’s Goldcorp Inc. in 2019. But owing to low liquidity, Newmont in opted to delist from the TSX in 2025.
Barrick is seeking to spin off its North American operations in an effort to boost its stock market valuation. The miner has long traded at a discount to peers such as Agnico Eagle Mines Ltd. owing to its heavy exposure to risky jurisdictions such as Africa, the Middle East, and Pakistan. By providing a vehicle for investors to gain exposure only to its lower-risk North American operations, Barrick is hoping that will result in a “rerate” of its stock.
While the geopolitical risk is lower in North America, the operational performance of those assets has been disappointing in recent years, with high costs and declining output among the challenges.
Barrick in its Tuesday statement said it has been meeting with Newmont to look at ways to improve performance at its North American mines, as well as discussing the proposed spinoff.
In a February report, RBC Dominion Securities analyst Josh Wolfson said the timeline for the spinoff risked being pushed back in the event that Newmont disputes the move under the joint venture agreement.
Newmont in February said that any transaction concerning its joint ventures “must respect the protections that are contained in those agreements.”
Barrick appeared to push back on the notion that Newmont could hinder the spinoff, saying in its statement on Tuesday that it “is free to pursue the IPO unilaterally.”
The Canadian miner also announced the same day a new standalone executive team for North American Barrick with Tim Cribb named as chief operating officer and Wessel Hamman named as chief financial officer.