TORONTO STOCK EXCHANGE 14 Producing Mining Company Mineral Exploration & Development Company Senior Mining Company Pre-tax Cash Flow from Operations - - $1,250,000 in the fiscal year immediately preceding the TSX listing application AND Average of $900,000 for the two fiscal years immediately preceding the TSX listing application Market Support $50,000,000 market capitalization $50,000,000 market capitalization $100,000,000 market capitalization Adequate working capital to carry on the business: This is required for senior mining companies in lieu of a run rate calculation and is assessed on the basis of the applicant’s most recent financial statements (interim or annual) subject to subsequent material events. In some cases, pro forma statements may also be useful. Appropriate capital structure: As per footnote 2 to Section 309, appropriate capital structure is evidenced either by (a) positive working capital (calculated as excess of current assets over current liabilities in the most recent interim and audited annual periods) or (b) alternate evidence of liquidity, which for a Senior Mining Company, may be satisfied by its pre-tax cash flow. This capital structure requirement is historical and is separate from the run rate calculation, which is forward-looking. Accordingly, servicing of debt should be accounted for in an applicant’s run rate calculation, and, if classified as a current liability, the principal amount of the debt should be accounted for in the working capital calculation. Generally, TSX Staff expects that applicants under Subsection 314(b) will not have long term debt on their balance sheets at the time of listing. Applicants that cannot meet the positive working capital test may present alternate evidence of liquidity in order to demonstrate appropriate capital structure. This may include firm financing commitments but may not include a pattern of successful historical financings or a proposed future raise. Note that a raise concurrent with TSX listing which is designed to provide sufficient program funding for the applicant’s run rate calculation may not satisfy the test for alternate evidence of liquidity if it is insufficient to cover debt servicing and/or retirement as well as the program funding in question. Qualified person: As defined by NI 43-101. Note that reports prepared by independent qualified persons, and the acceptability of the authors, must conform to NI 43-101 and be acceptable to the Exchange. Qualifying Property: This is any property upon which an applicant applying under Section 314 is relying on in order to meet the OLR. Run rate calculation: Please note that pursuant to Subsections 314(a) & (b), specifically, the run rate calculation for applicants in either category must be signed by a qualified person in addition to the applicant’s CFO. Work program: TSX Staff will consider applicants undertaking an exploration or development program of at least $3,500,000 on a Qualifying Property if planned program expenditures on all properties aggregate at least $5,000,000. The additional properties will be considered with the submission of appropriate technical documentation, conforming to NI 43-101. Work program costs must be accounted for in the applicant’s run rate calculation. Note regarding lithium: When extracted by conventional hard rock and brine extraction processes, lithium will generally be considered to not be an industrial mineral, given that it is readily marketable.
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