Newcrest Mining Share Price Lifts on North American Listing (ASX:NCM)

The share price of Aussie mining giant Newcrest Mining Ltd [ASX:NCM] has lifted slightly today with the company announcing they will be listed on the Toronto Stock Exchange (TSX).

NCM shares have been in a bit of a rut recently.

Since hitting a high in early August, the NCM share price has fallen nearly 15%, despite the company recording a 15% lift in profits in FY20.

At the time of writing, NCM shares are trading at 30 cents or 0.96% higher to $31.43 per share.

ASX NCM Share Price Chart

Source: Tradingview

Why list on the TSX?

In general, one of the major benefits of dual listing is gaining access to a larger pool of potential investors.

Companies also benefit from getting access to additional liquidity, increased access to capital and the ability for its shares to trade for longer periods.

In NCM’s case, they have observed an increase in interest from North American investors over the past six months.

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Which could be due to the current record highs in the gold price.

NCM’s CEO Sandeep Biswas said:

A North American listing is part of our strategy of pursuing growth in the Americas following our 70% acquisition of the Red Chris mine in Canada in 2019 and our investments in Ecuador.

We believe the TSX listing will improve the global visibility of the Company and broaden our access to the large North American capital pool.

NCM anticipates meeting the remaining conditions for the listing to proceed.

Trading in the company’s shares are scheduled to commence on the TSX on 13 October 2020, local time.

There is no equity offering planned to be associated with this listing.

What does the dual listing mean for Newcrest Mining’s Australian investors?

While there are clearly benefits for companies to list on multiple exchanges, the practice has been called out by some of the world’s biggest investors.

The main complaint is that when companies dual list, they create multi-class shares that offer some investors more power.

As is the case for dividends.

Take BHP for example.

Its dual listing was called out by activist investor Elliott Management.

At the time, BHP defended its dual listing saying unifying its shares would increase the amount of tax paid on profits generated by its Singapore marketing hub.

On the other hand, collapsing the structure could negatively impact one class of shareholders more than the other.

Distributing franked dividends to all shareholders, rather than just the ASX-listed shareholders, would likely waste the value of franking credits.’

That’s according to Morningstar senior equity analyst, Matthew Hodge.

Although, it’s unclear how this will playout for NCM’s dividends.

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Kind regards,

Lachlann Tierney
For The Rum Rebellion

Lachlann Tierney is a writer for The Rum Rebellion and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. 

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