Why do some companies change their domicile? Answer: usually to get access to a wider spread of potential investors and also to get included in stock market indices from which their existing domicile precludes them. Not an awful lot has been written about Ivernia West's plans to shift its domicile from Limerick to Toronto and switch its primary listing from Dublin's less-than-prestigious exploration securities market to the markedly more prestigious Toronto Stock Exchange.
The problem with listing in Dublin is that companies with established mining assets, like Ivernia and Arcon, tend to be lumped with the dross of the exploration securities market - companies that puff themselves on the basis of the wonderful exploration things they are doing in Outer Mongolia or some obscure central Asian former Soviet republic.
For decades, Irish exploration companies - both the good and the bad - have suffered from a credibility problem; that and the fact that there is no natural investor to tap into, other than the instant fortune-seekers who try and ramp shares up and then get out with a quick profit.
It's unfortunate but understandable that Ivernia feels the need to shift its domicile to Toronto. And judging from a report from Canadian investment house Newcrest Capital, the prospects for Ivernia on the Toronto exchange are good. According to Newcrest - which has slapped a "strong buy" tag on the stock - Ivernia has the capacity to hit two Canadian dollars - that's the equivalent of £1.25 or #1.58 - within 12 months of its Toronto listing. That compares with its current price of #0.67 on the Dublin market.
Newcrest is forecasting earnings of Can$0.20 for Ivernia in 2001, the first year of full production from the Lisheen mine, with cash flow of Can$0.30. It describes Ivernia as "providing excellent leverage to a rise in the zinc price, this from a long-life, low-cost mine in a politically correct geographic country".
What exactly a politically correct geographic country actually is goes unexplained by the Newcrest analysts, but presumably it means it has something to do with political stability.
Another Irish-domiciled company on the move is Vislink, the son of Silvermines. No real surprise here, Vislink is British in everything but its domicile. All its directors are British, none of its assets are Irish and only a small minority of shareholders have Irish addresses.
Shifting its nameplate to London means that Vislink will qualify for inclusion in various FTSE indices - and that can only be good news for the share.
