Chess Depositary Interests (CDIs) in the Context of Capstone Copper’s Listing

Staff Writer

CHESS and Capstone Copper

Capstone Copper is set to list on the Australian Securities Exchange (ASX) with an issue type that might be unfamiliar to some investors – Chess Depositary Interests (CDIs). Here’s a breakdown of what CDIs entail and their significance in the upcoming listing:

1. What Are Chess Depositary Interests (CDIs)?

Chess Depositary Interests are a mechanism used on the ASX to facilitate the trading of foreign-listed securities. When a company like Capstone Copper, which is primarily listed on the Toronto Stock Exchange (TSX), decides to be listed on the ASX, CDIs are issued to Australian investors. These CDIs represent an interest in a specific number of shares held by a depositary nominee.

2. How CDIs Work

  • Issuance: When Capstone Copper lists on the ASX, a depositary nominee holds the actual shares on behalf of Australian investors.
  • CDI Allocation: In return, the depositary nominee issues CDIs to Australian investors. Each CDI typically represents a specific number of shares in the foreign-listed company.
  • Trading: CDIs are then freely tradable on the ASX, allowing Australian investors to buy and sell them like any other security listed on the exchange.

3. Key Aspects of CDIs

  • Unique Code (Security Code): Each company listed on the ASX, whether native or foreign, is assigned a security code. In Capstone Copper’s case, it is “CSC,” representing its Chess Depositary Interests.
  • Capital Raising: Unlike traditional IPOs where new shares are issued to raise capital, the issuance of CDIs doesn’t involve a specific capital-raising amount for the company. Instead, it provides an avenue for existing shares to be traded on the ASX.
  • No Fixed Offer Close Date: The lack of a specified offer close date suggests that the issuance of CDIs is not part of a traditional public offering with a set timeframe for investors to subscribe.

4. Significance in Capstone Copper’s Listing

  • Liquidity and Accessibility: By issuing CDIs, Capstone Copper enhances its liquidity and accessibility to Australian investors. CDIs allow local investors to trade shares in the company without directly participating in the foreign market.
  • Global Exposure: For Capstone Copper, the ASX listing with CDIs is a strategic move to broaden its exposure within the Asia Pacific region. It provides a conduit for Australian investors to engage with the company’s copper mining and production activities.

A bridge between its primary listing on the TSX and the Australia

In the context of Capstone Copper’s listing, Chess Depositary Interests serve as a bridge between its primary listing on the TSX and the Australian investment landscape. CDIs make it possible for Australian investors to participate in the potential success of Capstone Copper, contributing to the global reach of the company in the copper mining sector. Investors considering Capstone Copper should familiarize themselves with the unique characteristics of CDIs to make informed decisions in the lead-up to the listing on 2 February 2024.