Listed equity markets continue to represent the most liquid, efficient and transparent avenue for capital formation, and as the regulatory and operating environment for junior mining improves, it can be expected that this sector will become more attractive to investors, thereby supporting future initial public offerings (IPOs) for junior mining companies, highlights Johannesburg Stock Exchange (JSE) origination and deals head Sam Mokorosi.

The JSE has a rich history of supporting the mining industry with capital raising and facilitating corporate restructuring activity for almost 140 years, and its efforts in attracting junior miners include facilitating fast-tracked and dual listing mechanisms that enable junior miners to take advantage of varying investor requirements across multiple jurisdictions as they pursue efficient capital raising.

Mokorosi cites emerging miner Orion Minerals’ successful 2024 fund raise as being, in part, attributable to offerings made available by the JSE.

In being dual listed on the Australian Securities Exchange (ASX) and the JSE, he says Orion Minerals was able to raise capital from South African investors by using Australia’s share purchase plan, which allows listed companies to simplify the process of raising funds from existing shareholders in an efficient and accelerated manner.

“Therefore, the JSE’s dual listing framework will continue to champion mining companies such as Orion Minerals and others to use the JSE’s mechanisms across affiliated jurisdictions to continue attracting investments from both South African and Australian investors at present and into the future,” Mokorosi outlines.

These key developments emerge under the backdrop of mining regulation uncertainty, licensing backlogs, bureaucratic paperwork and volatile commodity prices permeating South Africa’s junior mining sector.

Capital Raising Imperative

To support fundraising in the junior mining sector, Mokorosi says the JSE regularly engages in industry events to highlight alternative public equity exchange potential through the JSE’s alternative exchange and private placements platform as avenues for capital raising.

He adds that these initiatives also support industry advocacy initiatives such as the Minerals Council South Africa’s flow-through shares initiative that seeks to provide tax credits to investors in listed exploration companies as a way of improving the attractiveness of the sector.

Other activities undertaken by the JSE include participating in global discussions with junior miners operating in South Africa, advocating for inward listings to raise capital on the local bourse, and hosting junior mining capital workshops and plenaries.

Mokorosi notes that the JSE also engages with the Department of Mineral and Petroleum Resources (DMPR) and National Treasury, the discussions of which are “encouraging”, having resulted in recent progress made relating to power generation and logistics investments.

“The significant structural reform gains made by [government initiative] Operation Vulindlela are also noteworthy, but more can always be done, and we look forward to an increase in accelerated structural reform,” he says.

Meanwhile, in terms of attracting mineral resource explorers, Mokorosi highlights that a much requested new and modernised cadastre platform should be predicated on enhancing transparency, efficiency and accessibility in managing mineral rights and permits as this is particularly crucial for junior miners, who often face challenges in navigating bureaucratic hurdles and accessing reliable data on mineral deposit rights.

“From the JSE’s perspective, a more transparent and efficient cadastre system could attract increased investment into the junior mining sector and this, in turn, may lead to a rise in miner listings on the stock exchange,” Mokorosi emphasises.

The proposed cadastral system, he says, will improve DMPR processes and national investments into beneficiation and should help to alleviate the junior mining sector’s challenges, making mining projects more attractive to investors, thereby improving their capital-raising potential.