Category: Canada

Toronto Stock Exchange-listed exploration and development concern, International Lithium Corp (ILC), is preparing to announce the results of its exclusive prospecting orders (EPOs), valued at US$219,250, which will mark the beginning of its mining operations in Zimbabwe. This country has been identified by ILC as a key focus for its global expansion, highlighting its importance in the company’s future plans.

By Ryan Chigoche

ILC is a Canadian firm specializing in lithium and rare metals exploration, with strategic interests in Canada, Zimbabwe, and Ireland. Being listed on the TSX, one of the world’s largest trading platforms valued at nearly US$3 trillion, ILC is in a strong position to drive growth through its mining projects, particularly in regions that are rich in mineral resources like Zimbabwe.

In a statement, ILC expressed its optimism about Zimbabwe’s potential, saying, “We see Zimbabwe as a highly strategic target market. We have applied for and are optimistic about receiving EPOs there.” While the company is actively pursuing projects in Canada, such as the Raleigh Lake lithium and rubidium project and the Firesteel copper project, it is clear that Zimbabwe is a major focal point in its global strategy.

“We see our key mission in the next decade as making money for our shareholders from lithium and other battery metals while at the same time contributing to a greener, cleaner planet and less polluted cities,” the company said in a filing to the TSX. This mission includes maximizing the value of existing projects and exploring new opportunities, with Zimbabwe playing an important role in this vision.

Zimbabwe’s rich mineral resources and position among the top 10 global producers of lithium make it an attractive destination for ILC. The company emphasized that the government of Zimbabwe has adopted a more business-friendly approach in recent years. “Zimbabwe has a well-educated population with strong experience in the mining sector,” ILC noted, “and recent legislative changes show that lithium is increasingly taken seriously at the governmental level.”

In light of these developments, ILC pointed out some important legislative changes in Zimbabwe’s mining laws that have made the country even more appealing for exploration. These include a “use it or lose it” approach to mining claims and grants, the introduction of a 5% royalty on lithium (a rate previously applied to gold and platinum), and new regulations that prohibit the export of unprocessed raw materials.

ILC believes these changes create a promising environment for generating solid returns for its shareholders while also contributing to Zimbabwe’s economic growth. The company is mindful of the broader impact, aiming to provide local employment opportunities and support the country’s economic renewal.

“We believe there’s a real opportunity to capitalize on these changes,” ILC added. “We look forward to making more announcements as our plans in Zimbabwe progress.” With its focus on Zimbabwe alongside its ongoing projects in Canada, ILC is positioning itself to make significant strides in the global mining landscape, and the company’s next steps will be closely watched by industry observers.

Canada’s Allied Gold has started a process to apply for a listing on the New York Stock Exchange, joining an industrywide migration to the world’s top bourse.

The Toronto-based gold producer was advised that it meets the criteria for a listing in New York and expects a decision on an application in the first half of the year, according to Allied Gold’s CEO Peter Marrone. The company trades only on the Toronto Stock Exchange, but would join a long list of gold miners that trade on both Canadian and US exchanges.

New York’s status as a global hub for gold equities has expanded in recent years after a series of major gold deals transformed the industry and created two North American titans — Barrick Gold and Newmont — that trade in the US city. The concentration of industry-specific exchange-traded funds has also added to the appeal.

“Canada is a great place to be a mining company, but New York is the king of the mountain in terms of listing seniority,” Marrone said in an interview. “That’s where we want to be.”

Allied Gold’s Canadian shares have risen nearly 50% in the past year on the Toronto Stock Exchange, and has a current market value of C$1.44-billion.

Allied Gold, formed by Marrone and other Yamana Gold executives who left after it was acquired, operates three gold mines in West Africa that produce about 375,000 ounces of gold per year.

Canadian miner Equinox Gold has entered a definitive arrangement agreement with Calibre Mining for an at-market business combination, with Equinox acquiring all issued and outstanding common shares of Calibre.

The resulting entity, New Equinox Gold, will be an Americas-focused diversified gold producer with an estimated market capitalisation of C$7.7bn.

The combined company’s operations will span five countries, including two Canadian gold mines, Greenstone and Valentine.

Post-transaction, Equinox and Calibre shareholders will own approximately 65% and 35% of New Equinox Gold, respectively.

Calibre shareholders will receive 0.31 Equinox common shares for each Calibre share held.

The merger brings together a vast reserve of mineral resources and a “highly prospective” pipeline of development, expansion and exploration projects for sustainable growth.

New Equinox Gold is projected to produce around 950,000oz of gold in 2025, excluding contributions from the Valentine or Los Filos mines.

With the Greenstone and Valentine mines at full capacity, the combined company could exceed 1.2 million ounces (moz) of gold annually.

Calibre president and CEO Darren Hall said: “The merger with Equinox provides combined shareholders a diversified gold production base with significant growth opportunities.

“The combination of two new, long-life, low-cost, open-pit gold mines, Valentine and Greenstone, will be the cornerstone of an exciting new major Canadian gold producer that will be positioned to generate substantial shareholder value. I look forward to working with the combined team to continue Calibre’s track record of superior execution and delivering on our commitments.”

The transaction requires approval from Calibre’s shareholders, with a special meeting anticipated before 31 May 2025.

It also needs regulatory approvals, including Canadian and Mexican competition authorisations and the listing of new Equinox shares on the Toronto Stock Exchange (TSX) and New York Stock Exchange-A.

Subject to conditions being met, the merger is expected to close in the second quarter of 2025.

Shareholders of both companies stand to gain from the merger, with enhanced production, cash flow and exposure to growth opportunities.

Simultaneously, Calibre has entered into subscription agreements to issue $75m in unsecured convertible notes to Equinox, Vestcor and Trinity Capital Partners.

These notes will have a 5.5% annual interest rate and a five-year maturity, and are convertible into Calibre common shares at C$4.25 per share, a 37.5% premium to the stock’s 21 February 2025 closing price.

The funds raised will cover transaction expenses and general corporate purposes.

The private placement is expected to close by 4 March 2025, pending TSX approval.

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TFI International is going back on its decision to re-domicile into the U.S., instead opting to remain in Canada based on shareholder feedback.

While the trucking company did not go further beyond acknowledging the feedback in its statement, one minority shareholder had openly expressed dissatisfaction with the U.S. relocation.

Pension fund Caisse de Depot et Placement du Quebec (CDPQ), which owned a 4 percent stake in TFI as of Dec. 31, was frustrated that the company did not inform its brass before making the decision.

That fund has a mandate to try to boost the economic development of Quebec, and as such has fought to stop efforts from businesses to leave the province.

Ironically, one of the initial reasons CEO Alain Bedard cited for the move was to “better align with our shareholder base.” The plurality of TFI’s shareholders is U.S.-based, the company said in a statement. According to Bedard in Wednesday’s earnings call, 49.9 percent of shareholders were based in the U.S. as of last summer, outpacing the 45 percent that were Canadian.

Currently, TFI International Inc. is publicly traded in both the U.S. and Canada, on the New York Stock Exchange and the Toronto Stock Exchange. Bedard said the company can stay on both exchanges as long as U.S. shareholders don’t surpass 50 percent.

Shareholders aside, a move to the U.S. would have put the trucker more in line with its client base. Roughly 70 percent of the Montreal-based company’s business is domestic trucking in the U.S., while 25 percent remains in Canada.

Additionally, re-domiciling would have been beneficial for TFI’s flatbed trucking segment, Daseke. Daseke partners with the U.S. Department of Defense, which “creates a little bit of issues” for TFI as a foreign parent owner.

But in the end, the decision was always going to come down to shareholder approval, which would have been required for the relocation to occur.

The initial decision, and its quick reversal, come amid the highest tensions between Canada and the U.S. in recent memory, along with a freight recession has suppressed trucking demand since mid-2022.

On Monday, President Donald Trump said his tariffs on both Canada and Mexico are “on time” and “on schedule.” The Trump administration is slapping 25-percent duties on most Canadian imports, with energy products such as oil and electricity being tariffed at 10 percent.

The tariffs are set to go into effect March 4, after a month-long deferral, as the countries negotiate on other issues including border security.

Although only roughly 4 percent business encompasses cross-border trade at TFI, the trucking company couldn’t issue guidance due to the potential tariff impacts.

TFI’s fourth quarter was a “disaster,” Bedard said in the earnings call. While revenue increased 5.5 percent to $2.08 billion, it came in well below estimates and was buoyed by the Daseke acquisition early in 2024. Less-than-truckload (LTL), TFI’s largest segment, saw revenue decline 9.8 percent to $737.3 million when not accounting for fuel surcharges.

Net income came in at $88.1 million, down from $131.4 million in the prior year period.

Yellow offloads more two terminals to ArcBest

As TFI’s flip-flop on location unfolds, more trucking companies are participating in the fire sale of another former LTL provider’s real estate.

The estate of Yellow, the former century-old trucking business that ceased operations in summer 2023, sold off two more leased terminals to ArcBest for $11.5 million.

ArcBest, which owns LTL carrier ABF Freight, acquired a 32.5-acre, 108-door terminal in Aurora, Colo. for $7 million and a 60-door terminal on 12.6 acres in Kent. Wash for $4.5 million.

The trucking firm already had acquired four terminals from Yellow totaling $38 million across two rounds of auctions held at the end of 2023. Those auctions raised the estate $1.9 billion and $82.9 million.

ArcBest’s deal comes a week after a handful of trucking companies entered their own agreements to scoop up Yellow’s service centers.

Knight-Swift Transportation, in its pursuit to expand further into LTL, forked over $9.9 million for three California-based terminals in San Diego, Downey and Santa Maria, and another facility in Roanoke, Va.

A. Duie Pyle paid $4.5 million for terminals in Bowling Green, Ohio, and Charleston, W. Va., while TFI International bought a $700,000 terminal in Fayetteville, N.C.

Yellow’s estate has sold more than 175 terminals for more than $2.2 billion since its liquidation first began in late 2023. The insolvent trucking firm is currently selling off its real estate through both private sale transactions, with a three-day auction also scheduled for March 11.

Following a surge of adoption and acceptance over the past two decades, ESG—the investment and corporate policy trend that evaluates companies on environmental, social and governance factors—has been taking a beating recently. Among the examples of anti-ESG blowback making headlines: 

• A slate of Fortune 500 companies has dialed back on ESG and diversity commitments, several in response to pressure by U.S. conservative activist Robby Starbuck, who has targeted Meta, McDonald’s, Walmart, Boeing, Molson Coors and others.
• Texas Attorney General Ken Paxton and the attorneys general of nine other states have targeted BlackRock, Goldman Sachs, JPMorgan Chase, Bank of America, Citigroup and Morgan Stanley over investment policies that they claim give short shrift to traditional energy investing. 
• BlackRock chief executive officer Larry Fink has minimized exposure to ESG strategies, calling for “energy pragmatism” and a more nuanced path to decarbonization.
• In January, JPMorgan was the last large U.S.-based bank to leave the Net Zero Banking Alliance, following the exits of Citi, BofA, Goldman Sachs, Morgan Stanley and Wells Fargo. That month, the Net Zero Asset Managers Initiative also suspended its activities, following major defections that included BlackRock.

So, is ESG dead? If it is, it looks like nobody told a lot of family offices. At the same time as some big U.S. financial players have been leaving the ESG fold, North American family offices appear to have been increasing their overall exposure to responsible investing. The North America Family Office Report 2024 by Campden Wealth and RBC notes that 28 per cent of family offices are engaged in responsible investing—somewhat below the global average of 40 per cent—but among those, responsible investments comprise an average of 41 per cent of their portfolios, up from 36 per cent the year before. Those family offices also said that this number will increase to around 50 per cent over the next five years. 

Compared with their American peers, Canadian investors in general also seem to have a continuing appetite for ESG investing. In 2023, Ortec Finance, a provider of technology and advisory services for risk and return management, surveyed 50 Canadian wealth managers and financial advisors. The survey reported that 96 per cent of their clients are increasing their focus on ESG credentials in their investment portfolios.

If investors are increasingly interested in incorporating responsible investments into their portfolios, why is ESG under assault?

Dragged into the “culture war”

ESG has become divisive because it means different things to different people, depending on their views of business, politics and society. ESG supporters, for example, may envision a universal set of positive business practices; detractors may see an unwieldy basket of politicized initiatives in which management seeks to appease external stakeholders while ignoring its fiduciary duty to investors. 

Part of the answer, too, is a political shift in the U.S., reflected in the policies of Donald Trump and a slate of state governors who have targeted ESG investing as a “woke” folly. 

“American politicians dragged ESG into the so-called culture war, making it a wedge issue,” says Dustyn Lanz, chief executive officer of proxy voting analytics firm OxProx, past CEO of Canada’s Responsible Investment Association and a former senior advisor with ESG Global Advisors Inc. “At first, we in the industry dismissed a lot of these attacks as bogus, because they are, but then red states started to target asset managers involved with ESG and climate-related initiatives. So, asset managers had no choice but to start taking these attacks seriously, like a form of political risk. As a result, we see some asset managers talking about ESG and sustainability much less, and leaving collaborative initiatives as a way to remove the target from their backs.” 

A February report by Canadian ESG advisory service Millani concurs, noting that Canadian institutional investors are embedding their commitments to ESG and refining their approach. “The focus has shifted from public-facing commitments to internal strategy refinement, risk management, and outcomes-oriented engagement,” the report says.

Has the industry outgrown ESG?

A consistent definition of ESG has long been an elusive goal, further muddying the waters for supporters and detractors alike. While a few ESG rating providers such as Bloomberg and Sustainalytics dominate the industry, companies can choose from dozens of agencies that offer similar services. A research letter published by the CPA Ontario Centre for Sustainability Reporting and Performance Management at the University of Waterloo by researcher Amar Mahmoud suggests that “research documents a low level of correlation between ESG ratings from different providers.”

A recent article in Harvard Business Review, “It’s Time to Unbundle ESG,” by professors Aaron Chatterji (Duke University) and Michael W. Toffel (Harvard Business School), suggests that responsible investing may have outgrown ESG. The authors trace the modern ESG movement to an influential 2004 United Nations initiative, Who Cares Wins, which promised that “ESG integration currently represents an important source of competitive differentiation and value creation for financial institutions that make it part of their strategy.”

While the Harvard authors are all for corporate responsibility, they question whether current ESG ratings systems are good enough going forward. “It was never clear exactly why E, S, and G were the right concepts to bring together with (apparently) equal weighting or how they were connected to each other,” Chatterji and Toffel write. “This awkward bundle would later prove to be a liability to the ESG movement as it went mainstream in the subsequent two decades.”

Lanz agrees that the definition of ESG is sometimes too restrictive, arguing that practical ESG should be less aspirational and philosophical and more comprehensive. 

“For most major institutional investors, ESG integration has little to do with ethics or values,” he says. “It’s about considering all the material information that might impact a company’s performance. Management quality has always been a key consideration among investors. A leadership team’s management of ESG risks and opportunities is simply part of that evaluation.”

Does ESG really make for better investments?

Steven Globerman, a senior fellow at the Fraser Institute, highlights a conundrum for investors who want to increase their exposure to ESG investments in the hopes of reaping the financial benefits of exposure to better-managed companies. His recently published study, “ESG Investing and Financial Returns in Canada,” suggests that there’s no statistically significant relationship between ESG ratings and Canadian stock performance.

Examining data from MSCI, a leading ESG ratings provider, the study looked at statistical relationships between changes in ESG rankings of companies and changes in equity returns, using a sample of 310 companies listed on the Toronto Stock Exchange between 2013 and 2022. The study found that neither upgrades nor downgrades in ESG ratings significantly affected stock market returns. 

“Part of the motivation for the research was to determine whether complying with all those regulations is costly in terms of real resources, management time, etc., that has to be diverted into the compliance reporting exercise—resources that could be used in other ways,” Globerman says. “It’s not appearing in superior performance, at least as measured by stock market returns.”

He’s also skeptical of regulations that would force companies to disclose their fealty to a basket of ESG standards.

“If ESG did improve corporate performance, either by making a company more efficient or reducing risk, companies would not need to be regulated to disclose ESG standards,” he says. “They would do so voluntarily, because changes in corporate behaviour would reward them with a higher stock price.”

Brad Cornell, emeritus professor of finance at UCLA and senior advisor at Cornell Capital Group, also questions whether a company with stellar ESG ratings is necessarily a good investment.

“Suppose I pick a company which is well managed, has great products, behaves ethically and manages risks well,” he says. “Does that alone make Apple a good investment? It depends on how the company stock is priced. Even if you think ESG indicates a lot of favourable things about a company that would lead to superior returns, it would lead to superior returns for investors only if those benefits were not properly priced in right off the bat.”

Likewise, if investors tend to prefer high-profile firms with favourable ESG ratings, then the stock in those firms would be priced higher.

Cornell also points to litmus tests for ESG investing as problematic, citing exclusion screening of companies that produce carbon-based fuels as a prime example. “If you use carbon-based fuels, there are emissions, and there’s a social cost that goes along with that,” he says. “But you shouldn’t ignore the social benefits, such as the ability to heat your home affordably through cold Canadian winters. If you’re going to divest yourself of companies that produce hydrocarbons, why not go all the way and divest yourself of the companies that burn them—airlines, home heating companies or manufacturing companies?”

Some investors are also prioritizing their commitments to broader goals over absolute returns. They’re not investing to lose money, but they’re less concerned about whether a company that receives a high ESG rating delivers comparable returns to a company that doesn’t. They’re not necessarily married to the strict criteria of ESG ratings—but they do want to know the impact their investment will have on the world. 

Kind Capital is a wealth management practice that takes a pragmatic approach to responsible investing. The firm helps match clients to a range of investing strategies that may include ESG, but might also include socially responsible investing or impact investing—which aims to generate positive social or environmental impact alongside a financial return.

“Our clients generally believe that money is a conduit to creating a meaningful and rewarding life, and our job is to help them figure out what that is,” says Kind Capital CEO and founder David O’Leary. “Once they’ve taken care of themselves and their families, they look to something bigger than themselves. We help them understand which levers they have to pull to make an impact on those things.”

Kind Capital clients may want to invest in large, publicly traded companies who are doing the best job of managing ESG risks. Or they may want to make investments that would improve the lives of children in developing countries. They may want to invest in oil and gas companies that do a good job of managing risks in their sector, or they may want to avoid investments in traditional energy companies altogether.

“It’s our job to help them understand what types of activities their investments are supporting, and to help them align those investments with their values,” O’Leary says. “We can then explain whether achieving those goals would require them to sacrifice any financial returns. We want them to be intentional about the impact of their investments.”

While ESG may be in public retreat, companies aren’t abandoning a thorough assessment of business risks—and investors who care about ESG and the impact of their investments remain committed.

“Institutional investors largely have not changed course on ESG,” Lanz says. “Managers will meet demand wherever it exists, and big asset owners continue to consider all issues they deem to be material, including climate change and other ESG issues. While the ESG marketing party may be over, the consideration of ESG issues among investors isn’t going anywhere.”

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