Canadian mining issuers are showing an increased interest in
at-the-market equity programs (ATMs) to access funding. Since July
2019, ATM offerings on Canadian exchanges worth well over $500
million have been announced in the mining sector.
An ATM is a non-fixed price distribution of equity securities
under the shelf prospectus procedures through the facilities of one
or more public markets using a registered investment dealer as
agent. The ATM program establishes a maximum amount of shares which
can be sold over time and share sales are conducted on an ongoing
basis at prevailing market prices, as and when the issuer wishes to
sell.
ATMs can be attractive for issuers in capital-intensive
industries as a complementary source of alternative financing. They
have been used extensively in the United States, and Canadian
issuers in the utilities and the cannabis sectors have established
ATM programs in recent years as well.
