GOLD & SILVER Mining SectorGold & Silver Mining Sector M&A To Increase - Blackmont
SINGAPORE -(Dow Jones)- Canadian brokerage Blackmont Capital says the gold and silver mining sectors are set for a busy period of merger and acquisition activity as larger mining companies buy their junior peers. 'While the volatile markets and global financial crisis are deservedly dominating discussions these days, we believe the stage is set for an unprecedented increase in merger and acquisition activity in the precious metals sector,' Blackmont analyst Richard Gray said in a report dated Monday. Gold producers including Barrick Gold Corp. (ABX), Newmont Mining Corp. (NEM) and Kinross Corp. (KGC) are seeking acquisitions to maintain current levels of production, the report said. Other likely acquirers are Goldcorp Inc. (GG), Yamana Gold Inc. (AUY) and Agnico-Eagle Mines Ltd. (AEM), which Blackmont says have the strong cashflow necessary to fund potential deals. The report, which only refers to companies listed in the U.S. or Canada, describes junior producers as 'stretched for cash, personnel and relevance,' and argues that they are not well-placed to fund expansion due to weakness in equity markets, leaving them vulnerable to takeover. 'Exacerbating the problem for both gold and silver junior stocks, which typically rely on the equity markets to fund exploration and development, is the nonreceptive mood of the equity market to buy junior equity deals, as well as the reluctance on the companies' part to issue equity at the current depressed levels.' said the report. -By James Campbell, Dow Jones Newswires; 65-64154-082; james.campbell@ dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: https://
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