However, the forces driving Australian companies to operate overseas are not the same as those driving companies to list overseas.

Increasing interest in foreign exchanges has coincided with globalisation of capital markets and portfolio diversification strategies, as well as an industry trend seeing cross-border equity financing replacing foreign bank loans and direct foreign investment.

If a mining company simply can’t achieve its required funding at home, its financial advisors may well recommend this course of action.

In this case, knowing the advantages and disadvantages of any particular exchange before making a commitment can save a significant amount of frustration, if not time and money.

International marketplaces hosting Aussie miners include the Toronto Stock Exchange, the Johannesburg Stock Exchange, the Honk Kong Stock Exchange and London’s AIM.

Companies pursue listings on these markets to access investors not available on the local market, with Toronto historically representing the most enticing environment for mining fundraising.

Last year, TSX boasted the best access to capital in the world for mining juniors with some $C6.9 billion ($A6.8 billion) raised through 1400 transactions.

This, however, comes with some bureaucratic baggage, driven by a multi-tiered system across the TSX’s two exchange boards, which conspicuously spotlights the small cap status of companies.

In a quest to find out if these lucrative international listings are worth the headaches, MiningNewsPremium spoke with Norton Rose Fulbright partner Jeremy Wickens.

Wickens says that while need for international capital may rightfully steer a company into trading on a foreign exchange, the Australian Securities Exchange remains the best option for local miners.

“My firm view is that in terms of regulation, ASX is far and away the preferable exchange for mining companies to list on,” he said.

“I strongly believe that ASX has an appropriate level of regulation and its regulation is sufficiently well crafted to be a one-size-fits-all, so we don’t need a main board and second board.

“If you weren’t being told that you need to be somewhere else to make a raising succeed, Australia is the natural, sensible and best choice for Australian mining companies.”

If setting up shop on a foreign exchange does become necessary, the first question is where to go.

Attracting Asian dollars is the logical strategy for many Australian companies, but the Hong Kong and Singapore exchanges require companies to hold producing assets to be accepted. Thresholds are less exclusive on the other major mining exchanges, but ASX remains the least prohibitive, with no mining-specific application requirements.

Beyond the application, deciding where to list demands consideration for what kind of money the company expects to raise. AIM is an exceptional market in this regard as it requires no shareholder spread.

AIM-listed companies may raise retail investor capital or exclusively venture capital with only a handful of institutions as shareholders.

Wickens identified another consideration as the location of company assets and the makeup of personnel.

“If you’ve got wholly Australian management and a bunch of relationships with a bunch of Australian people, and you don’t have any real connection to Toronto, you’re making life much harder for management to succeed with their initial capital raise and their ongoing capital raise,” he said.

“Likewise, for any city that you’re signing up to, having your senior people travel persistently to that city, and developing relationships with all of the investing and other communities that are interested in the market there – it’s a big commitment.”

Investors are likely to be happier with companies with projects in the local exchange’s jurisdiction, but they’re becoming increasingly broader in their investment practices, with TSX having long entertained a substantial presence of Latin America-focused operators.

Corporate activity

Quarterly financial reporting and capital raising on foreign exchanges varies in procedure from being extremely onerous (TSX) to comparatively laissez-faire (AIM).

Toronto is the standout in this regard, with a prickly requirement for a time-intensive management discussion and analysis document for each quarter.

Wickens described a Canadian system where lawyers are needed to check off on data that would be considered non-litigious in Australia, performing line-by-line reviews in exhausting detail.

Topping the company up with secondary raisings, meanwhile, is met with the same bureaucracy.

“Companies don’t realise how good they’ve got it in Australia for raising money on a secondary basis,” he said.

“It’s ridiculously easy. You don’t have to do a prospectus, you can do just your one-page cleansing statement where you have nothing extra to disclose and run a rights issue.

“There’s a power to do things with very simple documents and a very light touch of regulation.”

The best exchange in this regard may be AIM, which holds no restriction on secondary raisings in its listing rules. Hong Kong, meanwhile, disallows secondary raisings within the first six months of listing and requires a mandate to make any sort of placement other than a rights issue.

ASX scores another point by maintaining the most efficient takeovers regime, with the takeovers panel regulating strong levels of hard-to-stop mergers and acquisitions activity.

In Canada, by contrast, efforts to clamp down on hostile takeovers often involve court actions.

Regarding time needed to list, the worst exchange may be Hong Kong, where thorough vetting and rounds of detailed questions can lead to three months or more of application delay.

Inventory reporting

Johannesburg requires the SAMREC code – which is not greatly different to JORC – while Hong Kong and AIM allow for a variety of resource reporting codes.

The one to watch on this issue is once again TSX, with its more stringent NI 43-101 code and requirements for an independent qualified person.

“Every technical report needs to be signed off by someone outside your organisation in Toronto, so you are persistently paying the costs of those Toronto-based consultants that are enabled to give the technical report you need,” Wickens said.

“It makes a difference to Aussie companies to have to comply with that requirement, and that is needed for every material change to reported reserves, resources and a variety of other trigger events.

“There are also a few more specific rules that apply under NI 43-101, and if your folks are used to reporting under JORC, they are going to need training in order to meet the different requirements.

“And if they’ve worked off a body of material, there would need to be substantial work in adapting the reporting to deliver it under the different code.”