B2Gold introduces depositary receipts for Namibia
B2Gold, a Vancouver-based mid tier gold producer and developer of the Otjikoto gold project, in conjuction with Bank New York Mellon has scored a first for the country’s financial market by issuing a Namibian Depositary Receipt (NDR) on the Namibia Stock Exchange (NSX).
At the time of its local listing in May, B2Gold Namibia MD, Bill Lytle said the company chose to list on the Namibian Stock Exchange to gain access to the country’s and South Africa’s large savings pool for investment and to show its commitment to developing the local economy.
The company, which is developing the Otjikoto gold project expects to produce 100,000 ounces of gold annually during a 10-year life of mine. It has now gone a step further by issuing depositary receipts for local investors. B2Gold’s Namibian Depositary Receipts will give the company direct access to the local market. The NDR is denominated and pays dividends in Namibian dollars.
The depositary receipts also allow local investors to receive specified rights and entitlements to the ordinary shares of the company. An NDR also enables local investors and employees of the company to trade the security on their home market.
Speaking at the launch of the NDR, Bank of New York Mellon regional manager, Alex Johnstone said a depositary receipt is a flexible mechanism for international companies to facilitate a local listing in Namibia as the listing can reinforce a company’s commitment to the Namibian market.
“Although a number of foreign issuers have listed on the NSX without creating a local security, it can be burdensome for a Namibian investor to invest in non-Namibian securities even when the issuer is listed locally. Challenges can include negotiating foreign exchange transactions, complete cross-border settlement processes, and compliance with foreign regulation in order to access the issuer’s home securities market where the stock trades,” Johnstone said.
CEO of the NSX, John Mandy said although depositary receipts were something new on the African continent, it is an instrument Namibia had to establish.
He said: “In September/November last year there was a Tanzanian Standard Chartered DR and Zambian DR. The JSE hasn’t introduced it yet. It’s something that is new to the African market; it’s something that we have to do and we have to keep pace with the times and we are catching up so it’s timely that we do it.”
Mandy added that they were in discussion with other international companies that hold secondary listing on the NSX such as Old Mutual to see if these companies can also issue local depositary receipts as it reduces the cost of trading international shares.