Wasn't I just mentioning the potential for a wave of M&A activity?
Yamana's war chest and potential takeover targets
Posted: June 11, 2009, 12:24 PM by Jonathan Ratner
Mining, Takeovers, gold, Yamana Gold, M&A
Yamana Gold Inc. expects its sale of three mines for US$200-million will allow the company to better focus on its core assets and operating jurisdictions. It also plans to advance its high-returning development-stage projects.
“In the end, the plan is aimed at lowering cash operating costs, increasing margins, reserves, production and cash flow per mine,” Wellington West analyst Steve Parsons told clients.
But the senior gold producer has also built up a war chest of approximately $1-billion in cash and equivalents, undrawn credit and proceeds from mine sales. This has prompted the analyst to suggest Yamana may emerge as a “buyer of significance.”
Yamana operates six mines and has several development/expansion projects in progress in Brazil, Argentina and Chile. Its core operations include the high-grade El Penon gold-silver mine in Chile and the Chapada copper-gold mine in Brazil.
While the disposal of non-core operations will take a bite out of earnings and cash flow, with an acquisition looming, the negative impact may be short-lived, Mr. Parsons said.
He believes Yamana will look to add a larger-scale asset than those it sold. Those relatively near-term, intermediate producers with a long life in stable geopolicitical jurisdictions include Osisko Mining Corp., Detour Gold Corp., Jaguar Mining Inc. and Romarco Minerals Inc.
Jonathan Ratner
network.nationalpost.com
I think he left off a few I mentioned. And now that I think about it the guy didn't do much homework - his list is pathetic.
Osisko is the only one that is moving toward production with financing nearly done, but that is a bulk tonnage project that could get wipped out with high inflation.
Detour might be another good play.
Romarco - But why would Yamana buy a project in SOUTH CAROLINA? Project isn't even in the build stage.
Jaguar is their next door neighbor in Brazil, if Peter Maronne wanted Jag, he'd have bought it already. Not sure how Jag would help AUY diversify?
Gee, maybe AUY is taking a look at B2Gold? That would certainly give them geo diversity. I think it would make more sense for AUY to look into buying GRS, MFN, ARZ, NGD, NXG or ANV instead of the list that guy offered up. Next time he should call me instead of guessing.
H3 |
