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Save Canadian Mining pens open letter to Minister of Finance

Sep 13, 2021

Dear Honourable Peter Bethlenfalvy,

Predatory short selling is continuing to impact Ontario’s mining sector, and we are calling on you to act quickly in order to avoid further erosion of this vitally important economic segment. Under the existing regulatory regime, small business mining companies cannot effectively raise money in our capital markets, meaning they cannot grow, hire and attract talent.

Since its inception in the fall of 2019, Save Canadian Mining (SCM) has invested a great deal of resources in research and educating the public and governments about the structural problems within Canada’s capital markets.

Fact 1: The decline in mining investment is not linked with commodity prices. As of January 2020, there was a 60% gap between the metals and minerals index and the TSX Venture Exchange – the largest gap in at least 12 years.

Fact 2: There has been a distinct decrease in issuers listing on the TSX and TSX Venture Exchange. The number of mining companies listing on the TSX and the TSX Venture Exchange recently reached its lowest number in 10 years.

Fact 3: Equity capital raised by junior mining companies on the TSX Venture Exchange is a fraction of what was raised prior to 2012. During the recession of 2008-2009, equity raised by junior mining companies on the TSX Venture Exchange averaged $2.9 billion which represents 42% more than equity raised by the same sector in 2019.

Fact 4: Mining companies are accounting for less economic activity in Canada than ever before. The mining sector accounted for $4.2 billion of spending in local economies in 2011 compared with $2.2 billion in 2018, representing a 62.5% drop.
SCM and their supporters are confident that the discrepancies revealed in our research are due to the enablement of predatory short sellers and the resulting lack of confidence within the industry to continue to invest.

Specifically, we are calling on your government and regulatory bodies such as IIROC and the Ontario Securities Commission (OSC) to announce the following key measures:

  1. Immediately announce a 10-year review of the repeal of the “Tick Test”. The tick test was a regulation that had safeguarded vulnerable junior mining companies for 142 years prior to its removal by IIROC in 2012. The decision was initially made without sufficient consultation with the stakeholder groups that were to be most impacted – junior issuers. There are now 10 years of data and a frustrated segment of the economy. A review would allow junior issuers to be heard and more appropriate decisions to be made.
  2. Immediately implement the recommendations made by your government’s Capital Markets Modernization Taskforce (“Taskforce”). There were many good recommendations proposed in the final report of the CMM Taskforce. SCM and its supporters are particularly interested in the implementation of the following two recommendations:
    • Recommendation #25 – Modernize Ontario’s Short Selling Regulatory Regime to ensure short-sellers are taking appropriate steps to confirm that adequate securities are available to them to settle any short sale execution prior to the entry of the order in the marketplace; and
    • Recommendation #26 – Prohibit short selling in connection with prospectus offerings and private placements.


Save Canadian Mining, along with its founding partners and supporters including Eric Sprott MiningOsisko Gold, the Ontario Mining Association and the Ontario Prospectors Association and:

McEwen Mining
First Majestic Silver
Rio2 Inc
Canadian Palladium
Tudor Gold
Kore Mining
Power Nickel
Abraplata Resources
Kuya Silver
Warrior Gold
Brixton Metals
Spanish Mountain Gold

Metals Group
Benchmark Metals
Altiplano Metals
Saint John Carbon
Midas Letter
Cambridge House
American Manganese
Resource Stock Digest
Proactive Investors
Investment News Network

Plus over 3,000 junior mining supporters, urge you to take our request seriously and reflect these two asks within the draft legislation we anticipate will be posted soon.

Ontario’s small businesses are counting on you and Premier Ford to do the right thing and introduce more protections that will curb predatory short selling perpetrated by large institutions many of which are located outside of our borders.

We need to give junior minors hope. We need them to see that they can in fact raise the capital they need on a level playing field, attract the next generation of mining professionals, sustain Ontario’s position as a global leader in mining, grow and become big employers for the province.

Thank you for your attention to this open letter and Ontario’s junior mining sector looks forward to working with you in the coming weeks and months.
Yours truly,

Terry Lynch

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