Thursday, June 17, 2010

Junior Exploration M&A Expected To Pick Up

The CEO of Lake Shore Gold, which has been engaging in some takeover activity itself recently, said that takeovers of junior exploration companies are likely to increase this year.
Higher gold prices of the last few years had led to an influx of juniors trying to get their mines built, such as Lake Shore Gold. Many of these projects were now coming on stream, and the market was beginning to understand the various companies 'relative worths, according to Makuch.

"We are starting to see a lot more requests for confidentiality agreements. We are also getting a lot of people asking us to sign confidentiality agreements with them."

When companies ask to perform a due diligence on a potential takeover target, the two will generally sign a confidentiality agreement.

So far, there's been no mania I can see. I haven't bumped into any junior flying upwards based upon takeover rumours, nor have I seen any significant rumour mill developing. It's almost inevitable that both will settle in to penny-stock land if the trend keeps waxing.

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