This event should allow European capital to more easily flow into the TSX and put a bit more stress on the serial shorts. Perhaps it is time for an ECU roadshow in Europe?

Cheers - VHF

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Toronto and London Exchanges to Merge Creating Mining Equities Giant

Ian Mcllelland

February 8, 2011

Merger and Acquisition activity amongst stock exchanges across the globe has accelerated in recent years, driven by intense competition and to meet the need to tap into deep pools in international capital and finance.

This evening another deal was announced, between the London Stock Exchange (LON:LSE) and TMX Group (TSE:X), which owns the Toronto Stock Exchange (TSX), Venture Exchange (TSX-V) and Montreal`s derivative exchange.

The deal is being touted as a merger of equals, with the TMX Group currently carrying a market capitalization of CDN$3 billion compared to the LSE`s £2.4 billion. Current discussions envision the merged group retaining headquarters in both London and Toronto.

London`s financial markets are considered to have far deeper pools of capital, and are also well regarded as a destination for mid and large cap commodity focused companies looking to raise large amounts of finance for capital intensive projects; like building mines or oil fields.

London investor`s are also highly regarded for their risk tolerance, often investing in companies operating in parts of the world that many of their North American counterparts would balk at. With this reputation, the LSE and its junior market, AIM, is often the destination of choice for mining and energy companies operating in Africa, Asia and the FSU.

This attraction is not reserved for junior companies either; a number of large cap IPO`s in recent years in London have been mining or energy companies from Russia, India, Ukraine and Kazakhstan.

This is perhaps what makes this evening`s news so intriguing.

The TSX and TSX-V have built up a strong presence among junior mining and energy companies in particular, but the recent commodity boom has massively boosted valuations across the board and significantly increased access to capital.

A merger of these two exchanges would create the largest concentration of mining companies on the planet in an era when commodity prices are soaring. By capturing a dominate presence in the commodity equities sector, the merged exchanges could benefit immensely from their ability to offer liquidity, finance and international exposure to this vast pool of companies.

Speculation will no doubt intensive on whether the merged company will remain independent for long, there will certainly be interest from other large bourses to capture the bigger prize of both the LSE and TSX.