Newstrike Capital Inc NWSKF

Acquisitions

[taylor1988]

With 20 take-overs already this year in the gold space, I wouldn't be surprised at all. Obviously all of them aren't going to go at the same time but the ones that don't get acquired in the next year will still do well as they'll have an opportunity to become one of the upcoming majors given the exceptional resources that the juniors of today have. Gold companies with a potential for 3 - 5 million ounces in generally safe jurisdictions will be acquired by majors in order to supplement their production profiles and replace depleted reserves. The grade of these deposits which will separate the good from the best will determine the premium that is paid for the assets by majors. There are about 10 juniors right now that are ripe for the picking that are purely exploration plays currently. The total resources at these deposits by the time a 43-101 has been released for all of them will amount to about 40 million ounces of gold or 4 million ounces per deposit. Most of these deposits have huge upside exploration potential which is what makes majors willing to pay a hefty premium to PREVENT these companies from making more discoveries and proving more gold. The fact that over 40 million ounces of gold have been acquired in the past year by major gold companies means that they certainly aren't slowing down in M & A. In addition the past year gold companies have had record cash flows meaning if there are juniors they're interested in - they certainly have the cash to do so. Barrick was the only company to have a meaningful discovery this year of the majors so unless this was just a very unlucky year for exploration for majors - juniors will be looked at to add gold reserves. So to answer your question yes, juniors will be acquired if they have what the majors are looking for (3 + million ounces of medium to high-grade gold in a good mining jurisdiction). Believe it or not the world economy and headline news are not affecting majors' appetite for juniors, there have been a record number of acquisitions this year. Until last week there was 1 gold buy-out a week the past 3 months. St. Eugene by Claude, Auryx Gold by B2Gold, Fronteer Gold by Newmont, Ventana by AUX, Northgate by Aurico, Tradewinds by Detour, Augen Gold by Trelawney, Goldstone by Premier, Grayd by Agnico Eagle, Richfield by New Gold... that's just in the past 12 months and those are the major ones.