sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Mergers and Acquisitions »
 How can HR help with mergers and acquisitions?
 Here are the top 10 acquisitions to have happened in India
 The difference between mergers and acquisitions
 Mergers and acquisitions: Know what rights you have as employees
 Deals of the day-Mergers and acquisitions May 8, 2018
 Motherson Sumi plans 3 acquisitions in 6 months
 How tax reform is expected to alter the mergers and acquisitions landscape
  Metro Cash and Carry eyes acquisitions to aid digitization plan
 Metro Cash and Carry eyes acquisitions to aid digitization plan
 Deals Of The Day-Mergers And Acquisitions May 1, 2018
 Deals of the day-Mergers and acquisitions APRIL 26, 2018

Six mining companies to watch as mergers and acquisitions heat up
July, 26th 2016

In the most recent mining merger and acquisition (M&A) activity, Goldcorp Inc. acquired Kaminak Gold Corp. to get its hands on the coffee project in Canada's Yukon Territory, and Fortuna Silver Mines Inc. is in the process of acquiring Goldrock Mines Corp., whose flagship asset is the development-stage Lindero heap-leach project in Argentina.

As gold and silver prices seem to be holding their ground—resulting in increased target prices for both precious metals—it would be normal to expect more M&A transactions to occur in the second half of the year, as the midtier and senior producers wouldn't want to miss out on any deals.

Of course, one should never invest in a company purely based on buyout speculation, but sometimes there are plenty of arguments to be made about why a company could be on the short list of their larger competitors.

In the past 12–24 months, companies have not only been focusing on cutting costs, but also on making a run toward "safer" assets. Higher-risk projects have been sold, and practically all new deals were in regions with an acceptable geopolitical risk as companies refuse to invest hundreds of millions (or billions) in assets located in higher-risk countries where the returns are only marginally higher.

Today I will focus on some logical buyout targets in the Americas.

Junior exploration companies with an existing joint venture (JV) agreement are on top of the list. Not only does the existence of a JV deal confirm the company's asset has drawn the attention of other companies, but also those larger companies usually don't want to deal with minority partners on a project basis.

1. "Making a deal on Paul Isnard might create a win-win situation for both Columbus Gold Corp. and Nordgold."

An excellent example would be Nordgold N.V., which dislikes having minority partners on any of its projects. Even if there's a lot of opposition from the shareholders of the targeted company, Nordgold pushes through and usually secures 100% ownership of the asset it wants to get its hands on. That's what happened with High River Gold Mines several years ago—Nordgold wanted to own the Taparko-Bouroum and Bissa projects, rather than having High River Gold as a minority partner—and that's what might happen to Columbus Gold Corp. as well.

Nordgold is earning a 50.01% stake in Columbus' Paul Isnard gold project in French Guiana, but it's not unreasonable to think Nordgold will want to own the entire asset. As the after-tax NPV8% of the project is almost half a billion dollars (using a gold price of $1,300 per ounce), Columbus Gold is trading at just one-third of the NPV, and making a deal on Paul Isnard might create a win-win situation for both parties involved.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multimedia Presentations Multimedia Solutions 3D Solutions Corporate Presentations Business Presentations Multimedia Presentation India M

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions