BofA about H2 M&A: Pretium mentioned as 1. name - Friday, July 10, 2020 - 10:47:00 PM
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The M&A deal flow is unlikely to slow in the second half of the year, the bank forecasts, with higher gold prices and the need to replenish reserves. “For the H2 2020, the need to replace reserves mined in 2020 plus the higher gold price will be catalysts to drive further M&A,” BofA commented in its July 9 report. “After years of underinvestment, we see production profiles under pressure and reserves in decline. The evidence is too obvious to ignore…At year-end 2019 total gold reserves for the global gold producers amounted to 612 million oz., down 30% from the peak of 875 million oz. at year-end 2012, equating to declining reserve life indexes.” It predicts that with gold cresting $1,750 per oz., the result will be “windfall free cash flows and expanding valuation multiples” that will look a lot like the period of record M&A between 2010 and 2013. Mid-tier producers that don’t do deals, it reasons, “risk being ‘left behind’ by their rapidly growing peers.” “An unintended consequence of non-core asset sales by senior gold producers (post the mega mergers in late 2018-early 2019) has led to a burgeoning ‘senior’ mid-tier producer sector marked by gold output in the 1.0-1.75 million oz. range,” the report states. “These larger more liquid producers are coming to the attention of global gold investors (likely at the expense of the smaller mid-tier gold producers [0.5-1.0 million oz.].” The bank lists eight companies that are intermediate/mid-tier producers that it believes have “intriguing” mines and or development projects: Pretium Resources, Victoria Gold, Torex Gold, Wesdome Gold Mines, New Gold, Lundin Gold, Teranga Gold and Perseus Mining. On the exploration and development front, BofA says its list of companies with interesting assets contains: Gold Road Resources, Osisko Mining, Rubicon Minerals (now Battle North Gold), Great Bear Resources, Gold Standard, Orla Mining, Sabina Gold & Silver, Marathon Gold, Okio Resources, International Tower Hill, Novagold, INV Metals, Premier Gold, MAG Silver, Midas Gold, Algold Resources, Eastmain Resources, West African Resources, Belo Sun Mining, Artemis Gold, and Sirios Resources. One thing that might slow M&A down, of course, is the inability of companies during the current pandemic to conduct site visits of potential acquisitions. As a result, “acquirers excelling at ‘desktop’ analysis of assets could find an ‘edge’ over their competitors.”
Any potential big boy who wants to get his hands on Pretium has used a bad tactic until now. He waited until the price of gold was running away. Now the price is at the magic 1,800 USD/oz line.
For us long time shareholders it is OK, if he waits longer until the price of gold is at 1,850 or 1,900 etc. etc. ... :-))
full article and source of the quote above:
https://www.miningnewspro.com/News/563139/Gold-price-and-reserve-depletion-to-drive-MA