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MINE PERU: Dual-Listed Companies on TSX/TSX-V and BVL/BVL-V. Presenters: Jennifer Armstrong Patricia Prato-Casado Associate, Macleod Dixon LLP Associate, Macleod Dixon LLP Phone: +1 (416) 203 4462 +58 (212) 276 0059

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MINE PERU: Dual-Listed Companies on


Presenters: Jennifer Armstrong Patricia Prato-Casado

Associate, Macleod Dixon LLP Associate, Macleod Dixon LLP

Phone: +1 (416) 203 4462 +58 (212) 276 0059

October 5, 2011


The Toronto Stock Exchange

Source: Standard and Poors World Exchange


Lima Stock Exchange (“BVL” after its initials in Spanish)

Source: Standard and Poors World Exchange



Peru: A Mining Center

  • Peru is one of the world’s main Silver producers. Moreover it is the No. 2 producer of silver and copper in the world and in Latin America
  • It is the No. 1 producer of gold, tin, zinc, lead, indium, tellurium, bismuth in Latin America
  • It ranks as the No. 2 zinc producer; No. 3 tin producer; No. 4 lead producer; and No. 6 gold producer worldwide

Companies listed on the BVL

Source: web pages of BVL and BVL-V


Junior Mining Companies listed on BVL–V

Source: web page of BVL-V

*In process of entering the BVL / recently entered the TSX


Canadian Regulatory Overview

  • Canadian Securities Laws
    • Laws are largely harmonized through national instruments:
      • Prospectus offerings
      • Exempt offerings (private placements) - applicable 4-month hold period for purchased securities
      • Take-over bids
      • Continuous disclosure obligations
      • Corporate governance
    • Companies deal with a designated principal regulator
  • Toronto Stock Exchange Rules
    • TSX Company Manual
    • TSX Venture Exchange Corporate Finance Manual
  • Corporate Laws
    • Company not required to be incorporated in Canada
    • No requirement to have resident Canadian directors

Peru Regulatory Overview

  • Peru shows itself as having a friendly market environment for business
  • There are no taxes or restrictions on short term or long term capital flows in or out of the country
  • The exchange rate is market driven and there are no taxes or restrictions to buying/selling foreign currency in Peru
  • Canada and Peru have signed 3 agreements effective August 1, 2009:
    • Canada-Peru Free Trade Agreement
    • Labour Cooperation Agreement
    • Agreement on the Environment


  • Bolsa de Valores de Lima (BVL) is the only stock exchange in Peru. Moreover, it is the only one in the region which has a Mining Venture Exchange
  • The BVL is regulated by the Comisión Nacional Supervisora de Empresas y Valores – CONASEV (Securities Exchange Commission)
  • The BVL is a public company and its shares are traded on the Peruvian equity market
  • Trading is conducted through an electronic system, which guarantees a transparent and efficient market. IT IS THE ONLY STOCK EXCHANGE LINKED TO CDS, which makes for easy clearing and settlement for dual-listed companies
  • The SEC recognizes the BVL as a designated offshore securities market under “S” regulations


  • The BVL-V is the venture market specially designed for mining companies
  • It is the only Venture Exchange segment in Latin America
  • It is only for mining companies in the prospecting phase
  • It provides liquidity through stock sales
  • The BVL-V is a segment based on high international standards (AIM, TSX-V, ASX)
  • It provides attractive investment options
  • Once your company is listed on the BVL-V it can be easily listed on the BVL, Peru’s regular stock market

Practical differences for BVL companies interested in listing on the TSX

  • Peruvian companies wishing to achieve a TSX listing or interested in raising capital should be prepared for a greater volume and complexity of legal documentation
  • TSX listings and Canadian capital raisings involve lawyers to a far greater degree than in Lima (even for routine placements), since transactions are “lawyer-driven”, due to Canadian stock exchange and securities regulation
  • There are differences in documentation required for TSX and BVL listings
  • TSX requires that the Board have independent directors, and directors with experience in Canadian capital markets
  • Increased costs in terms of management time, frequent travel to Canada, and additional resources to list as a TSX entity, should be contemplated

Advantages of listing on the TSX and the TSX–V

  • Market sentiment: Certain North American investors may be more attracted to a company with a "local" listing
  • Access to capital for growth: BVL does not provide access to the levels of investment capital that are available on the TSX
  • Heightened company profile: Increased press coverage and analyst's reports, helping to maintain liquidity of shares
  • Objective market value: Potential re-rating or revaluation of the company
  • Increased liquidity
  • New market for shares

Advantages of listing on the BVL and the BVL–V

  • Peruvian investors have an appetite for locally-listed companies
  • BVL has streamlined its processes to match the TSX / TSX-V more than other international exchanges (AIM, ASX, Johannesburg)
  • Favorable economic conditions and a rapidly growing globalization process
  • Local industry knowledge
  • Secure funding for the exploration phase through the BVL-V, allowing you to save other sources of funding for other phases of the mining process
  • Enjoy the benefit of having the shares of your company listed in two different stock markets at the same time, following a simplified procedure

Doubling Up: The TSX / TSX-V and BVL / BVL-V

  • If your company is already listed on TSX, you may list on BVL without making a Primary Public Offer
  • On-going expenses - underwriting, legal (all applicable jurisdictions), audit, registrar and transfer fees, fees to stock exchanges, fees to securities regulators
  • Corporate governance more complicated since issuer is listed in multiple jurisdictions
  • Continuous disclosure obligations and regulatory compliance
  • Dual-listings help to increase companies’ liquidity in their main market
  • Check to see if there are exemptions under various rules for foreign issuers

Doubling Up: MILA Integrated Market

  • MILA - after its initials in Spanish - is the Integrated Latin American Market formed by the BVL and the Colombian and Chilean Stock Markets - “Bolsa de Valores de Colombia (“BVC”)” and “Bolsa de Comercio de Santiago (“BCS”)”
  • It started functioning on May 30th, 2011, pursuant to Resolution 107-2010, issued by CONASEV on October 29, 2010
  • MILA is the largest market in the region in number of issuers, the second largest in market capitalization and third in terms of trading volume after Brazil and Mexico
  • The listing is automatic for an issuer listed on the BVL, at its request
  • Any investor able to invest in its local market, can do so through MILA without additional requirements
  • It allows the issuer to: have access to a wider market, expand demand for its own financing by attracting the interest of more investors, and reducing capital costs for companies
  • Ensures harmonization of practices, standards and market regulations with the realities of a globalized market
  • Markets are access through an automatic and international routing model
  • Technology strengthening implementation of international standards
  • Recognition of securities/foreign issuers (integrated market) for public offering in the three markets

Doubling Up: MILA Integrated Market (cont.)

  • Each Exchange continues to manage its own market. Moreover, the negotiations are conducted according to the rules of the market where the securities are listed. The exchanges manage accounts according to the rules where the shares are listed
  • Supervision of issuers is the responsibility of the authority of the country in which the respective issuer and/or security (i.e. in Peru, CONASEV) is listed
  • Relevant information or events of importance of the issuers must be simultaneously available to all market participants of the integrated market, pursuant to the rules of its primary market
  • MILA provides different options for investors, since BCS is strong in commercial and energy stocks, BVL has a solid reputation in the mining sector and BVC is well known for petroleum and holding companies
  • Transactions are performed in local currencies (Colombian pesos / Peruvian soles / Chilean pesos)
  • The relationship of intermediaries in each country will be with the local Exchanges, with local deposits and local authorities
  • In order for a Colombian or Chilean intermediary to have access to the Peruvian shares traded on MILA, subscription service agreements with local intermediaries are required
  • Foreign investment treatment makes it easier for capital flows among the markets

MILA Trading Volume

Integrated Shares Market trade: US$250-$300 Million daily


Listing foreign securities on BVL–V already listed on TSX–V

  • The mining companies already listed on TSX-V, pursuant to Section 314 (b) of the Corporate Manual issued by the TSX, are deemed Junior Mining Companies Category II by the BVL-V, and therefore the submission requirements for such companies to list their securities on BVL-V are less strict and very straightforward
  • The securities of a Junior Mining Company Category II will be automatically listed on the BVL, upon request by the issuer or a stock exchange agent, and after complying with certain requirements, and verifying that the securities are indeed traded on TSX-V
  • The BVL will be responsible for facilitating access to the public information system which provides the information submitted by the Junior Company to the TSX-V

Requirements for listing foreign securities on the BVL–V that are already listed on the TSX–V

  • Information of the Issuer: commercial denomination of the issuer, date of incorporation, domicile, country of origin, main economic activity and area of business, total amount of shareholders, capital stock paid expressed in local and foreign currency
  • Information on the securities to be listed: nominal value, rights conferred, international securities identification number (“ISIN”), mnemonic, the exchange on which they are listed, and they type of right pending payment, and information regarding the custodian institution of such securities
  • Information about the Company's Representatives: of the individuals authorized to act on the name of the company before the BVL during the term of the listing (who shall be domiciled in Peru); and of those persons authorized to file for the listing. A copy of the power of attorney granting such authorizations is required

Requirements for listing foreign securities on the BVL–V that are already listed on the TSX–V (cont.)

  • Information regarding the title over the Qualified Property: Sworn Affidavit issued by the Company declaring the type of ownership over the qualified property, whether direct or indirect
  • Corporate authorizations issued by the Company: to incorporate the securities into the stock trading system of the BVL, and to comply with the rules and regulations of the BVL
  • Sworn Affidavit staying that all the information submitted to the TSX-V is available, real time, through a web site to which the public can have access, and provide such address

Requirements for listing foreign securities on the BVL–V that are already listed on the TSX–V (cont.)

  • Sponsor Reports: The Sponsor shall submit the following documents: (i) Report regarding the restrictions to transfers affecting the holders of the securities to be listed, and the conditions, as applicable, and (ii) Listing Report which consists of a general overview of the business of the company, the proposed transaction, the business plan, the main contracts and agreements, the capacity of the directors and managers, and the result from the evaluation on the working capital requirement, and (iii) Declaration that the company meets all the requirements pursuant to Peruvian law to list their securities on the BVL-V
  • All information required by the TSX-V, at the same time required by such markets
  • Pay the required listing fees and maintaining fess
    • Junior companies are required to pay a fee depending on the number of shares they would list. The maximum amount required to be paid for the initial listing is S/. 23,100, which gives the company the right to list any amount of shares they want. The maximum amount required to be paid as maintenance fee is S/.825
    • Regular mining companies are required to pay an initial listing fee and maintenance fee depending on the number of shares they will list and the amount of capital stock registered with the BVL

Comparison of Continuous Obligations for Maintaining Listing on TSX / TSX–V vs. BVL / BVL–V (cont.)


Comparison of Continuous Obligations for Maintaining Listing on TSX / TSX–V vs. BVL / BVL–V (cont.)


Comparison of Continuous Obligations for Maintaining Listing on TSX / TSX–V vs. BVL / BVL–V (cont.)


Comparison of Continuous Obligations for Maintaining Listing on TSX / TSX–V vs. BVL / BVL–V (cont.)


Comparison of Continuous Obligations for Maintaining Listing on TSX / TSX–V vs. BVL / BVL–V (cont.)


Comparison of Continuous Obligations for Maintaining Listing on TSX / TSX–V vs. BVL / BVL–V (cont.)


Exemptions for Foreign Issuers under Canadian Law

  • National Instrument 71-102 – Continuous Disclosure and Other Exemptions Relating to Foreign Issuers
    • An issuer that qualifies as a Designated Foreign Issuer (a "DFI") will receive relief from certain Canadian disclosure requirements
    • If there are de minimus securities owned, directly or indirectly, by Canadian residents (<10%), and the issuer is subject to foreign disclosure requirements in a designated foreign jurisdiction (such as Lima), the issuer will qualify as a DFI
    • Exempt from requirement to prepare Canadian forms of: Material Change Reports; financial statements and MD&A; AIFs; Business Acquisition Reports; Management Information Circulars; and Early Warning Reports, provided, among other things, that the issuer (i) complies with its foreign disclosure requirements relating to such documents, and (ii) complies with applicable Canadian filing obligations and shareholder delivery requirements
    • DFI status does not relieve issuer from all Canadian securities law obligations (e.g. qualification of auditors, certification of financial statements, obligation to notify of change in corporate structure)

Exemptions for Foreign Issuers under Canadian Law (cont.)

  • Issuer required to disclose to its shareholders, at least once a year, that it is a DFI subject to the requirements of a foreign regulatory authority
  • Determinations on DFI status are made at the start of each financial year (i.e. the exemption lasts for one year)
  • Interlisted issuers with 75% of trading value and volume on an exchange other than the TSX will be exempt from certain requirements concerning security holder approvals, private placements and security-based compensation arrangements

National Instrument 43 – 101 - Standards of Disclosure of Mineral Projects

  • Requirement to file technical report triggered: (i) by new previously undisclosed scientific or technical material information about any of the issuer's material properties prior to the filing of a document listed below, or (ii) by a material change to information contained in a previously issued technical report is discovered between the filing of a preliminary prospectus and the filing of the final prospectus
  • A technical report must be filed at the same time an issuer: (i) becomes a reporting issuer, (ii) files a short form or long form prospectus, (iii) files an information circular in relation to the acquisition of a mineral property, (iv) or files an AIF that includes previously undisclosed scientific or technical material information
  • Technical report must also be filed within 45 days following the issuance of a news release that includes previously undisclosed scientific or technical material information which represents a material change

National Instrument 43 – 101 - Standards of Disclosure of Mineral Projects (cont.)

  • Scientific and technical data must be prepared by a “qualified person” (as defined in NI 43-101)
  • Technical report must be prepared in format required by NI 43-101 and must use definition standards from the Canadian Institute of Mining & Metallurgy ("CIM") to report quantities and grades of “mineral resources” – inferred; indicated; measured – and “mineral reserves” – probable; proven
  • Issuer may make disclosure and file a technical report that utilizes the mineral resource and mineral reserve categories of the JORC Code if such disclosure includes statement that the report was prepared in using the guidelines of the JORC Code, and that the categories used are directly comparable with the classifications of the CIM
  • NI 43-101 does not permit inferred mineral resources to be added to other categories of mineral resources

Technical Reports: TSX and TSX–V

  • TSX Company Manual
  • Appendix B: Disclosure Standards for Companies Engaged in Mineral Exploration, Development and Production
  • TSX Venture Exchange Corporate Finance Manual
  • Appendix 3F Mining Standards Guidelines
  • Appendix 3E News Release Guidelines

Requirements for Peruvian Mining Companies

  • Must submit a list containing the identified mineral substances on the qualified property
  • Must submit a Geological Report of the property where the resources obtained from the issuance would be invested. Such report must contain the recommendations for exploration and development of the project. It must also be prepared in accordance with the Code of Standards to Inform regarding Mineral Resources and Mine Reserves, approved by the BVL
  • Must be the owner of the mining property or at least have an option contract granting an exclusive right to explore such property

Requirements for Peruvian Mining Companies (cont.)

  • Mining Companies must submit the following requirements before the Peruvian Ministry of Mines:
    • Consolidated Annual Declaration informing the Ministry about the mining activities performed the previous year. This declaration will be used to classify the mining company as Big and Medium Size Mines, Small Size Mines, and Artisan Mines; evaluating their impact on the national economy. If the Company fails to comply with this requirement, a fine of between 1 and 6 applicable tax units will be applied
    • Monthly Reports of: (i) Production and (ii) Statistics of Accidents must be submitted before the Ministry. Such reports must be submitted 10 days after the month has concluded
    • Declarations of: (i) planned and (ii) executed investments per month. Such declarations must be submitted 10 days after the month has concluded
    • Obligation to pay annually the validity right (“derecho de vigencia”), which grants the right to exploit the mine

Technical Reports: BVL / BVL–V

  • Code for Reporting of Mineral Resources and Ore Reserves
  • The Code is a required minimal standard for public reporting. It is required to report on exploration results, mineral resources or ore reserves, prepared for the purpose of informing investors or potential investors and their advisers. This includes a report to satisfy regulatory requirements before regulatory authorities.
  • Companies must disclose relevant information concerning the status and characteristics of a mineral deposit which could materially influence the economic value of that deposit; as well as on any material change in its Mineral Resources or Ore Reserves
  • The estimation must be performed by a qualified person who is authorized as so by the Engineer School of Peru
  • Public reports concerning Mineral Resources or Ore Reserves should include a description of the type of deposit and the nature of the mineralisation
  • The difference among inferred mineral resource, indicated mineral resource, and measure mineral resource shall be properly indicated, as well as among probable ore reserve and proved ore reserve

Peruvian Mining Laws

  • Comply with the assigned minimum production. E.g.: a Small Size Mine shall produce: U$ 50.00 yearly per acre; while an Artisan Mine shall produce US$ 25.00 yearly by acre
  • Mining companies shall present/submit environmental assessments (“EA”) or environmental impact statements (“EIS”), per project and at the beginning of such project, and these shall be approved or rejected within 90 days
  • It is required to submit a new EA or EIS if the project suffers changes, modifications, expansions, differences, as well as if it is relocated to another location

Important Links

  • Rules on the High Risk Capital of the Lima Stock Exchange Stock:
  • Law that Regulates the Peruvian Stock Market:
  • Rules of Important Acts, Privileged Information and other Publications:
  • Companies currently listed in the Lima Stock Exchange:
  • TMX Dual-Listing Guide for International Public Companies:

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