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Save Canadian Mining hopeful short-selling safeguards will be reinstated

Nov 18, 2020

Dear Supporter – Thank you for your continued support of Save Canadian Mining and our work with the Ontario government as they and the Capital Markets Modernization Taskforce deliberate on potential changes to the Ontario Securities Act. With your support we have been able to make some real progress, and feel that we are closer to getting the amendments we want to help protect the junior mining industry.

Where we are at:

  • Our coalition of support has grown significantly – through our various efforts to reach out to the mining sector, SCM has attracted over 2,500 supporters. We believe we are on track to reach 5,000 by the start of 2021. In addition, our coalition’s leadership remains formidable with continued participation from the TSX Venture Exchange, the Ontario Mining Association (OMA), the Ontario Prospectors Association, Eric Sprott Mining, Rob McEwen Mining, and several larger mining companies. We couldn’t be this large without your support and we thank you for your continued interest.
  • The initial report by the taskforce is out and has been responded to - as SCM publicly commented at the time of its release in early July, the campaign is encouraged by the initial direction of the taskforce. There are a number of inclusions that address predatory short selling and reducing “red tape” on smaller issuers. On behalf of the campaign, we publicly and privately (through direct interactions with members of the taskforce) expressed a degree of disappointment that the initial recommendations did not go as far to include the reinstatement of the tick test. We are confident they are aware of the degree of small business support this request has.
  • The submissions are in – SCM has been able to produce two comprehensive submissions to the taskforce as part of their consultation. These documents make clear the need for better restrictions on predatory short-selling and the impact that the repeal of the tick test in 2012 by IIROC has had on mining juniors. Our submissions are being weighed along with over 100 others from various stakeholders.
  • The taskforce is preparing its final report – originally set to have been released in the month of November, we are hearing the taskforce’s final report will be delayed. The consultation period is now over and we are awaiting their final report / list of recommended changes to the Ontario Securities Act. Based on our current intelligence, we should be expecting this to be made public before the end of the calendar year. This means there is still time to affect their decisions through continued advocacy.

What we have done:

SCM and our partners have been busy over the past several months as the campaign has made itself an important part of the government’s consultations. Here is a list of what SCM has been up to:

  • Met with the CEO and Executive Team at IIROC twice – SCM has met with the Ontario Securities Commission and IIROC to share information. In these meetings, it was revealed to the campaign that the tick test has indeed had an impact on a specific segment of securities. While we are encouraged by some of the broader initiatives that IIROC is conducting to address predatory short selling, we still are still debating with them around the importance of our ask that they reinstate the tick test.
  • Meetings with the Ford government – SCM continues to meet with key offices within the Hon. Doug Ford administration. The last round of meetings focused on socializing SCM’s position on the tick test based on new data shared with us by IIROC. SCM will continue to interact with these offices as they deliberate on the soon-to-be released final recommendations by the taskforce.
  • Drafted and submitted two comprehensive documents to the taskforce – SCM has made two separate submissions to the taskforce as part of their consultation. The first highlighted SCM’s own research on the disparity between stock valuations and commodities. This proprietary research was conducted by Murenbeeld and showed that there is a clear structural problem in Canada’s capital markets. The second submission encouraged the taskforce to keep the recommendations that address predatory short selling, but it also restated our case for the tick test. The second submission included data provided to us by IIROC that proves the repeal of the tick test has indeed had a negative impact on junior mining companies.
  • Publicly responded to the taskforce initial consultation report – SCM continued to make a case for the inclusion of the reinstatement of the tick test in a public release that included quotes from key supporting partners like the OMA and the TSX.V.
  • Executed a number of webinars with leaders from the mining sector – SCM has hosted a number of webinars that featured leaders in the mining sector. These online sessions attracted a great deal of attention, and focused almost entirely on the impact that predatory short selling has had and will have on the industry unless changes are made.

What’s next:

  • Continue dialogue with the taskforce and government – SCM and its founders will continue to interact with decision makers both within the taskforce and in the Ontario government as developments occur and as SCM continues to strengthen its arguments.
  • Mining sector town hall event – SCM is in the planning process to host two mining sector town halls that will seek to shed more light on the structural issues of our capital markets. The first will be targeted at Mining Executives to broaden understanding and support for the advocacy. The second will build on the support developed in Town Hall 1 to reach out to an investor audience and gather their support. We have more than 2,500 supporters at moment and we would like to push that to 10,000 and beyond to demonstrate how broadly interested investors are in an improved Capital Markets process. Stay tuned!
  • Expansion of the coalition of support – SCM is appreciative of all the support the campaign has received from the mining industry and juniors in other markets. We will need to continue efforts to build the coalition and achieve the critical mass needed to affect real change.  
  • Media and news releases – SCM continues to build profile for the importance of our campaign through the media. We will host a number of events on our Podcast series. With the US election dominating attention, we decided to delay events until starting them again until November 20th and we would expect to run the series until Government policy has been announced. In addition, while many interviews have already been conducted SCM will continue to welcome media inquiries as developments occur.
  • Public response to the final recommendations – SCM will continue to be a vocal stakeholder as the taskforce continues to deliberate on the submissions they’ve received and after they release their final report.
  • Work with the Ford administration on implementation – SCM will re-engage with the Ford administration following the release of the final recommendation to help ensure that those recommendations that help our industry are adopted, and to continue to fight for the re-instatement of the tick test as one of those structural tools.

As always, we encourage supporters to remain active in our campaign. Please visit https://savecanadianmining.com/ to sign our petition and make a donation. Every little bit counts, particularly given the progress made and the fact we are in the final stretch before the government announces their changes.
Thanks again for your interest and support.
Best Regards,
Terry Lynch

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