02:55 PM EDT, 07/08/2024 (MT Newswires) -- New Canadian rules limiting foreign takeovers of mining companies will leave the nation's biggest metals producers with lower valuations than their global peers, according to Bank of Nova Scotia's mining analysts, BNN Bloomberg is reporting.

It noted Canada will only approve foreign takeovers of large domestic mining firms with "significant" critical minerals operations "in the most exceptional of circumstances," according to guidance issued Thursday by Industry Minister Francois-Philippe Champagne. The measure was taken to protect the country's cache of metals that are key to the energy transition, the report said.

The directive "significantly compresses M&A optionality and potentially restricts financing options for Canadian miners," Scotiabank analysts Orest Wowkodaw and Eric Winmill said in a Monday note. "As a result, we now anticipate most Canadian miners to trade at lower valuation multiples versus global peers."

The new directive suggests that large Canadian-headquartered companies including Cameco Corp. ( CCJ ), Teck Resources Ltd., Ivanhoe Mines Ltd. ( IVPAF ) and Lundin Mining Corp. ( LUNMF ) "are now off-limits to potential foreign buyers," the analysts wrote. Other companies named were First Quantum Minerals Ltd. ( FQVLF ), Hudbay Minerals Inc. ( HBM ), Capstone Copper Corp. ( CSCCF ) and Ero Copper Corp. ( ERO )

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