Tuesday, August 3, 2010

Gold-Company Takeovers Set Record

The acquisition trail has been hot this year, with several deals contributing to $32 billion' worth of takeovers this year. It's only early August, and the gross value of deals has already set a record.
“The reason why we may have seen a pickup in activity this year is because gold prices are around $1,200” an ounce, said Greg Fournier, Hong Kong-based head of Asia Pacific region metals and mining investment banking at Merrill Lynch. “If you have a view that the gold price is strong and is going to go higher then acquiring more reserves or producing properties today makes sense.”
Also a factor is gold majors wanting to increase their resource base in a time when new gold deposits (particularly big ones) are becoming harder to find.


It's only a matter of time before takeover interest will move to smaller deposits. Because of the general fascination with huge-potential properties, the development companies with smaller properties have been overlooked - even ones with good grades. Although less convenient and less easy to manage, someone who's adept at a portfolio approach could put together an agglomeration of smaller properties and wind up with a mid-tier or even a major by collecting those leftovers. Given their low profile, they're likely to be cheaper than a major elephant.

4 comments:

  1. I cannot believe how many junior gold mining stocks their are its amazing.

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  4. Thanks for sharing the details..
    It helped to know about the takeover.
    Sometimes the process of takeover is peaceful and sometimes it is hostile, where the acquiring company attempts to forcefully take charge of the other company. If you need consultation and other statutory services related to Open Offers and Takeover, then you can rely on Chartered Finance Management Limited (CFML), a Mumbai based financial advisory services firm.

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