Allied Gold bypasses London for North American listings

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The boss of a newly listed gold mining company has said that its future lies in Toronto and New York, as more precious metals miners are bypassing the London Stock Exchange to list their shares.

Allied Gold, an Africa-focused producer, listed in Canada on Monday following a reverse takeover transaction, raising $267mn in the country’s largest mining initial public offering since 2010 with a market capitalisation of C$1.3bn ($970mn) on the first day.

Peter Marrone, chair and chief executive of Allied Gold since April, said that the company had been considering listing in London about 18 months ago, but it will most probably opt for a New York via Toronto route.

“New York is a very interesting place. There’s a lot of money that is a multiple of what one finds in the rest of the world,” he said in an interview. “In the precious metals world, they are becoming more comfortable with the emerging markets.”

The change in listing plans for Toronto-based Allied Gold comes after Johannesburg-based AngloGold Ashanti announced plans in May to switch its primary listing to New York in pursuit of a higher valuation underpinned by the US east coast city’s large pool of investors.

London has long been home to Russian gold producers but the likes of Polymetal and Polyus have been forced to pursue delisting plans following western sanctions in response to Russia’s invasion of Ukraine. That leaves few gold producers of large scale after Randgold departed in 2018 following its merger with Canada’s Barrick Gold.

The London market’s waning ability to attract companies is not limited to gold miners, however. Some London-listed companies, facing wide valuation gaps, are looking to the US, while Washington’s green tax incentives are also proving to be a draw for the New York market.

Among companies opting for a US listing include Irish paper maker Smurfit Kappa which is moving its primary listing to the US and UK-based chip designer Arm, which opted for a New York IPO. WeSoda, which produces soda ash in Turkey, pulled out of a $7.5bn London IPO earlier this year.

London has historically been the home for natural resource companies whose production is based in Africa owing to the timezone, but Marrone believes that the UK capital’s investors have become increasingly skittish about emerging market risk.

“Whereas in the past, Europe and London had a better focus on Africa and emerging markets in Asia and some parts of Europe, I think the American portfolio manager is now catching on to that. I think the landscape is changing,” he said.

Marrone is the former chair of Canada’s Yamana Gold, which added a secondary London listing in 2020 before being sold last year for $4.2bn to two competitors.

Allied Gold operates three mines in Mali and Ivory Coast that produce about 375,000 troy ounces annually. Marrone aims to lift output to more than 700,000 ounces over six years through organic growth including investing $500mn in the Kurmuk project in Ethiopia. In that time, the company aims to triple core earnings from $200mn to $600mn.

Marrone said he would consider opportunities for mergers and acquisitions to build a portfolio of emerging market gold mines, which could include partnering with competitors to buy bigger rivals and divide up their assets.

“I would like to get to a platform of 1mn to 1.5mn ounces per year that leans towards the emerging markets,” he said.