I can see there is a lot of confusion here about dual listings. I hope this post brings some clarity for those who need some.

Q: Is it the same as shorting?

A: No it is not, as there is no net short position

There is a weird financial fact that exists between Canada and the US. It is very hard for Americans to buy Canadian stocks as none of the discount brokerage accounts allow TSX-V stocks. None. Conversly , Canadians cannot open US trading accounts. All other jurisdictions across the globe are perfectly fine with both the Canadian and US regulators, but CND-US doesn't go. I do not know the legal reason, but it is a fact. Accept it.

Therefore, many TSX-V issuers have US listings on the Pink Sheets as do many international, non-US junior issuers. These listings were not necessarily put there by the issuers. I have seen it many cases that someone will have inventory and open a PK listing for the company so they can trade it in their US accounts. The same goes with Frankfurt listings – often not initiated by the company. Usually if a TSX-V, or even full TSX issuer wants an overseas listing, they will go with the OTCBB, AMEX, AIM, or any exchange where they need to be fully reporting. You do not need to be a reporting issuer to have a PK listing.

That being said, it is not all bad that there is a PK mirror listing for the GNH. It enables Americans to participate in this exciting play in which they would otherwise not have access.

Here is how a mirror listing works:

• There is a market for GOLHF – the “F” at the end stands for “Foreign Issuer”
• That market has bids and offers like any other
• The orders that are up are predominantly from market makers who do not hold positions but facilitate liquidity.
• If someone wants to buy/sell and there is actually orders up from someone who holds stock (inventory) then there is no need to go to the TSX-V:GNH to get stock
• If there is more order inflow or outflow than there is inventory available, the market maker has to go to the TSX-V:GNH listing to get the appropriate size to fill the client order while still making money on the spread for himslef (not easy).
• The spread the market maker makes money on is between the price he gets the stock at and what he is selling it to his client for – it is an arbitrage play for him. So you might get a fill at a worse price than the market maker gets and he keeps the difference – fractions of a cent add up over the days and large volume. Most of this stuff is all automated, there is no guy behind that desk.

These are mirror markets and attempt to mimic the parent listing while accounting for FX discrepencies. They are not perfect but they do serve a purpose.