Trickle DownTrickle down effect to the smaller guys makes for interesting times in the junior sector...
"2006-09-25 09:21 ET - In the News
See In the News (C-AL) Alcan Inc
The National Post reports in its Monday edition that mining firms around the world are expected to produce about $100-billion (U.S.) in cash flow over the next three years. The Post's Drew Hasselback writes the miners' burgeoning bank accounts will likely keep Canadian firms on the block. RBC Capital Markets says record prices for copper and other commodities will generate massive cash flows for BHP Billiton, Rio Tinto Group, Anglo American and Xstrata. Setting aside sums for dividends and capital spending, those companies will produce free cash flow of $45-billion (U.S.) by 2008. RBC analyst Chris Lancaster says the global giants might use that free cash to finance takeovers. He says Alcan is a potential target. Canaccord Adams analyst Orest Wowkodaw says the mounting cash balances at Canada's intermediate miners could make some of them targets for private equity investors hunting for stable sources of cash. Mr. Wowkodaw says AUR Resources, Inmet Mining and HudBay Minerals are sitting on piles of cash that could make them irresistible targets. Mr. Wowkodaw says these miners are "mis-priced." He says their shares do not accurately reflect their ability to generate future cash."
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C.Gert