Thought I'd see if we could restart this discussion. Let's focus on the variables that would determine the likelihood of takeovers.
I would offer the following and am interested in hearing of others: 1. Economic deposit, probably under 150 cash cost. Given the poor health of the industry, I question the ability of majors to take on cap costs over 500 million. 2. Fits in with a district strategy. ABX in Peru, Argentina or Tanzania is best example. 3. Juniors that would be receptive to offers. Unfriendly takeovers are too risky for majors. 4. Situations where a major owns a chunk of stock, is already jved or is very familiar with mgt or situation. 5. Current mkt caps that are nominal relative to likely transaction prices. Takeout prices several times current levels. 6. Time frame: next 18 months. POG assumption is conservative: $300. Best gold call plays should be discussed separately.
Here are my candidates:
Rio Narcea: safe country (Spain), relatively low cost, already producing. ABX is shareholder and jved on new targets.
Great Basin: Ivanhoe looks very promising, great location on Carlin trend near NM, ABX, FN. Royalty deal already with FN. Hunter-Dickinson are in the business to find gold and sell deposits, and will drill quickly.
Madison: Good, low cost deposit. Feasibility study this year so starting to get pretty advanced. Near PDG's Porgera in PNG so could cap costs be kept down? Mgt has also done deals with HM. ANGLY is looking in this neck of the woods.
Pangea: Fits in with ABX's district strategy in Tanzania, or anyone else that wants in there. Mgt will sell at right price. One of best exploration portfolios in the world.
Randgold: Mgt situation is a mess now. Time to strike. Low cost mine at Syama and new one coming on line at Morila. Plenty of mineral prospects. Great entry into Africa: PDG? ANGLY? Imagold?
El Callao: BGO owns 45%. Relatively low cap cost and cash costs. Does BGO have the muscle? Would probably try to steal, but current mkt cap is nearly zip anyway.
Moydow: JVed with NDY at Ntotoroso (Ghana) located in the middle of their (NDY's) Yamfo/Kenyase belt. Turning out to be the best deposit there. Hard to see how NDY can pass.
Birim: Very inexpensive entry into Ghana. Less than US5mm mkt cap. Several strategically located properties, especially Dunkwa. Already feeding ore to ASL at north end of belt. Looking to do same the other end to GSR's Bogosu. GSR already tried unsuccessfully to buy out cheap. Resolute is nearby as well.
Greystar: Kinross owns 22% and has been buying more lately. Plenty of gold at Angostura. Would be a big project in risky country (Columbia). Appears to be low cash cost below 150, but question mark is cap cost. Need to be kept down because of locational risk. GSL is now focused on this question. ANGLY? NDY? NM?
Nevsun: Mentioned in previous post. |
