Market Existential Episode 35 | November 2024

Episode Description:

The webinar discusses the listing of mineral and petroleum companies on the Hong Kong Stock Exchange, focusing on the specific requirements laid out in Chapter 18 of the Main Board Listing Rules. Chapter 18 allows these companies to bypass certain financial tests required for listing, provided they meet specific criteria related to resource indication and management experience.

Mineral companies must demonstrate that their core activities involve exploration and extraction, with significant assets and rights in these activities, while listing also mandates sufficient working capital for future operational expenses. Notably, the Exchange may grant waivers for material exclusion from Competent Person’s Reports if certain conditions are met, such as early exploration stages or lack of available information.

Disclosure standards require that both mineral and petroleum resources and reserves are reported using internationally recognized frameworks, such as the JORC Code or PRMS, ensuring transparency and consistency. Furthermore, listed mineral companies must provide regular updates on exploration and production activities and disclose information about resource and reserve changes in their annual and half-yearly reports.

Companies acquiring new assets must include a Competent Person’s Report and, for acquisitions, a valuation report prepared by a competent evaluator. The Exchange stresses the importance of a clear path to commercial production and imposes strict guidelines on reporting standards to protect investors.

Finally, the Exchange allows exceptions and waivers for certain reporting and disclosure requirements, underscoring a flexible but stringent regulatory environment.