The Toronto Stock Exchange is proposing a series of amendments to its listings requirements, including the creation of a new sub-category to facilitate the listing of development stage oil & gas issuers.

In Friday’s OSC Bulletin, the TSX indicates that it has recently received several applications and inquiries about companies with large development stage projects.

“For example, oil sands projects often do not have proved developed reserves, which are a requirement under current TSX standards,” the exchange says. “In order to list such issuers, we have granted an exception to the reserve requirement.”

The proposed new sub-category would require firms to have:
> contingent resources of $500 million;
> a minimum market value of the issued securities to be listed of $200 million;
> a clearly defined development plan which will advance the property;
> sufficient funds for an 18-month period or to bring the property into commercial production; and
> an appropriate capital structure.

In the OSC Bulletin, the TSX explains that the contingent resources requirement is consistent with the exemptions granted so far. “The requirement is intended to set high standards for issuers listing under this subcategory,” it says. The value of the contingent resources will be required to be calculated the same way the value of proved developed reserves is calculated under the current requirements.

The market cap requirement of $200 million “is intended to ensure that the market value is high enough to support the resource valuation in the technical report and the significant capital expenditures typically required for such projects.”

Additionally, the TSX is also proposing to amend the rules to:
> provide for aggregation of transactions involving insiders over a six-month period;
> allow for conditional rights offerings; and
> no longer require security holder for employment inducements provided that the aggregate number of securities issued to officers under the exemption in the preceding year is not more than 2% of the number of securities outstanding.

The amendments are out for comment until March 7.

IE