AAMEG CALLS ON THE ASX AND ASIC TO EXTEND COVID-19 RELIEF TERMS FOR JUNIORS
By AAMEG | 1 April 2020
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There are more than 168 ASX listed companies with operations in Africa, that are having to make choices about paying fees or paying people at the moment. Responding to the capital raising relief announced by the Australian Stock Exchange (ASX) and the Australian Securities and Investments Commission (ASIC) yesterday, AAMEG has called for further temporary waivers on annual charges applicable to Australian junior exploration and development companies with operations in Africa.
Responding to the capital raising relief announced by the Australian Stock Exchange (ASX) and the Australian Securities and Investments Commission (ASIC) yesterday, the Australia-Africa Minerals & Energy Group (AAMEG) has called for further temporary waivers on annual charges applicable to Australian junior exploration and development companies with operations in Africa.
While assisting companies to raise urgent funds is welcomed, the reality for the junior end of the market who are quite literally trying to stay afloat during the pandemic is that capital raising may not be an option right now.
“There are more than 168 ASX listed companies with operations in Africa, that are having to make choices about paying fees or paying people at the moment,” explains William Witham, CEO of AAMEG.
In a sustained period of starved capital markets, any reduction in fees for smaller companies is going to help save jobs. The principal issue for juniors at the moment is that an inability to raise capital ultimately turns to making tough decisions and reducing discretionary costs. This might start with freezing field operations, before moving onto cutting essential staff and removing overheads.
“Our listed members are now, more than ever, incredibly vulnerable,” says Witham. “As such, AAMEG is calling on ASIC to consider a temporary waiver of its annual industry levy, and asking the ASX to offer a reduction in its scaled listing fees.”
“In most cases, for a company with a market cap below $40-50M (AUD) these combined fees can be equivalent to that of an average annual salary.”
Australian mining companies in Africa play a key role in our economy, and in the calendar year 2019, the Australian resources sector in Africa generated billions of dollars and invested hundreds of millions in new capital expenditure. The sector also paid significant Australian company taxes while supporting a total of over 50,000 jobs.
“It’s in the best interests of the ASX to ensure a healthy ecosystem of juniors,” says John de Vries, Black Rock Mining Ltd’s CEO. “If the junior end of the market is extinguished then there won’t be a future pipeline of larger projects to contribute to socio-economic development both at home and in Africa.”
“We appreciate the current steps taken by ASIC and the ASX, but we also request that they also consider a fee-free period to help our junior member companies operating in Africa survive this difficult time,” said Witham.
