Investors ride rich rocks to build the TSX. Harvesting the many resources of Canada built the nation and many institutions across the country. That includes the stock exchange now named the TSX. The TSX evolved from the Toronto Stock Exchange and grew with Canada as a key source of capital for resource development.
This post is Part 5 of the White Top View Series, Stock Markets, basic discussions of the American and Canadian stock markets. Links to all parts of the White Top View Series, Stock Markets are at the end of this post.
The TSX still funds the mining sector. Building from that base, today finance offerings involve a very broad spectrum of companies in other sectors. Although the deep mining foundation remains, the TSX now reaches every sector of the contemporary and diverse Canadian economy.
Investors Ride Rich Rocks To Build The TSX
Canadian stock exchanges began with the oldest, the Toronto Stock Exchange, on Bay Street in the heart of Toronto. Toronto claims the leadership title for population, culture, business, finance and communication services in Canada.
Like everywhere else in Canada, resources are the very foundation of metropolitan Toronto. And like all Canadian Exchanges, resource developments built the Toronto Stock Exchange. From the time of canoes and trading for beaver pelts through the first development of commercial forestry to gold bars, deals to finance resource developers and explorers has served Toronto well.
Following those early eras, the more recent resource financing deals often related to mineral exploration and mine development. Most deals raised money to bore holes or tunnels in rock in the search of treasure. Such financing and deal making continues to enrich and endow Toronto today.
The Canadian Shield Yields Great Wealth To Investors
Most mining deals financed in Toronto historically focused on developing or seeking riches in the vast mineral treasure chest of the Canadian Shield. That is the geological formation that sits like a vast collar encircling the Hudson Bay.
Think of the Canadian Shield as the worn down stub of ancient mountains. They were first thrust up by continental drift and volcanic activity eons ago. Geological and cosmic events, predating human history, seeded those rocks with vast wealth in countless deposits.
Everything from meteors to earthquakes and cycles of tropical to arctic climates through eons long past pummeled those rocks. Rocks formed and morphed by pressure, erosion, weathering, tides, rain, wind and ice ages through multiple climate cycles over many millions of years created this vast region.
This vast complex of Precambrian rock, covers a huge area of Canada and extends south to the upper midwestern United States. It stretches from the Atlantic coast of Labrador across much of the vast Northern Territories. The hard rocks of the Shield sit north of the Canadian prairies and includes the landmass of Ontario and Quebec north of the broad band of rich soil near the American border.
Once erosion exposed geological signs of mineral deposits, great wealth was found. From before recorded history, the rocks of the Shield attracted resource seekers and developers. Exploration and discoveries continue today. Undiscovered deposits, possibly hold vast amounts of rich ore, wait for discovery.
Interestingly, the Canadian Shield is the center of a gravity anomaly detected and mapped by satellites! Geologists can’t agree on what causes that phenomenon. It must have something to do with the process of creating vast deposits of mineral wealth.
Toronto Becomes The Central Business And Finance Hub
The need for financing, drew prospectors, geologists and financiers together in Toronto. Drilling, blasting and boring tunnels to free the wealth from the grip of rock, takes lots of money.
Big payoffs are possible, but finding wealth in rocks is a high risk business. Very often the explorers find less than needed for a mine or nothing at all. But not always! Just often enough, discoveries produce opportunity and wealth! Sometimes, great wealth! Then as now, financings continue in the hope that the next deal will be the big pay off!
As a result, Toronto became the first center of mining finance. The stream of deals had a positive side effect. A pool of resource, exploration and mining knowledge developed in Toronto. That in turn produced a supporting professional talent pool of accountants and lawyers centered in Toronto. These mining deals and developments helped set up and continue contributing to making Toronto the central business hub of Canada.
Today contemporary TSX deals, reach far beyond the mining sector to a broad range of business. Still today, the materials or mining sector remains a very significant part of the Canadian stock market and economy.
Next discussion in this series we turn our attention turns to the background of the Venture Exchange.
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