AlexLutiera
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Fri Mar 4, 2011 6:44pm EST
* World's largest annual mining convention set to kick off
* Miners ebullient with metal prices near record highs
* M&A activity in sector expected to gather pace in 2011
By Euan Rocha
TORONTO, March 4 (Reuters) - This year the world's biggest mining convention could turn into a bonanza for dealmakers as eager mining companies look for ways to take advantage of a raging bull market for metals.
The event, organized by the Prospectors and Developers Association of Canada (PDAC), brings together nearly everyone who is anyone in the world of mining -- and it gives miners an unparalleled opportunity to talk shop and strike deals.
The dealmaking that PDAC could stir up this year may very well shift into overdrive, according to many of those who will attend, as the industry responds to a number of powerful, intersecting trends.
Prices of base metals are near record highs, while surging demand is only expected to accelerate, fueled by the building booms of China, India and Latin America. At the same time, major producers are expecting their production to contract unless replacements can be found.
Gold and silver miners are benefiting from one of the biggest sustained rallies in modern history, driven by inflation concerns, political turmoil, an uneven U.S. economic recovery and the European sovereign debt crisis.
That means junior miners and explorers -- those with assets that are close to going into production -- have never had it so good. Established miners are motivated buyers willing to pay top dollar for high-quality properties that can be developed quickly.
"I think deal activity is going to intensify, because companies' cash flows are enormous and lots of companies aren't replacing their production," said Donald Coxe one of Canada's most influential money managers.
The solution for many is to find attractive junior miners and explorers with projects that require little lead time before they can begin producing. For a major producer shopping around or a junior looking to sell, the PDAC convention in Toronto is a must-attend showcase.
"There are a lot of deals done during the convention. If you have a property you want to get rid of, or put into a company, or if you are a company looking for properties it is the best place you can go," said Terry Schorn an adviser to exploration company Eagle Hill (EAG.V).
"For me the best part of it is meeting people, it's a great place for contacts ... Quite often a deal does not happen at the convention, but you meet somebody and follow up and deals get done later," said Schorn, a veteran geologist who has attended the PDAC event since 1953.
With record cash flows, many miners have opted to initiate or raise dividends, while others are opting to use their new wealth to buy assets and secure long-term supplies. Exploration companies at the event are eager to show off their wares.
"We'll be looking at other opportunities, other companies that are (at PDAC)," said Chief Executive Robert Quartermain of gold explorer Pretium (PVG.TO). "We'll be meeting with majors so they fully understand the opportunity that we have."
Reference: http://www.reuters.com/article/2011...Type=RSS&feedName=basicMaterialsSector&rpc=43
* World's largest annual mining convention set to kick off
* Miners ebullient with metal prices near record highs
* M&A activity in sector expected to gather pace in 2011
By Euan Rocha
TORONTO, March 4 (Reuters) - This year the world's biggest mining convention could turn into a bonanza for dealmakers as eager mining companies look for ways to take advantage of a raging bull market for metals.
The event, organized by the Prospectors and Developers Association of Canada (PDAC), brings together nearly everyone who is anyone in the world of mining -- and it gives miners an unparalleled opportunity to talk shop and strike deals.
The dealmaking that PDAC could stir up this year may very well shift into overdrive, according to many of those who will attend, as the industry responds to a number of powerful, intersecting trends.
Prices of base metals are near record highs, while surging demand is only expected to accelerate, fueled by the building booms of China, India and Latin America. At the same time, major producers are expecting their production to contract unless replacements can be found.
Gold and silver miners are benefiting from one of the biggest sustained rallies in modern history, driven by inflation concerns, political turmoil, an uneven U.S. economic recovery and the European sovereign debt crisis.
That means junior miners and explorers -- those with assets that are close to going into production -- have never had it so good. Established miners are motivated buyers willing to pay top dollar for high-quality properties that can be developed quickly.
"I think deal activity is going to intensify, because companies' cash flows are enormous and lots of companies aren't replacing their production," said Donald Coxe one of Canada's most influential money managers.
The solution for many is to find attractive junior miners and explorers with projects that require little lead time before they can begin producing. For a major producer shopping around or a junior looking to sell, the PDAC convention in Toronto is a must-attend showcase.
"There are a lot of deals done during the convention. If you have a property you want to get rid of, or put into a company, or if you are a company looking for properties it is the best place you can go," said Terry Schorn an adviser to exploration company Eagle Hill (EAG.V).
"For me the best part of it is meeting people, it's a great place for contacts ... Quite often a deal does not happen at the convention, but you meet somebody and follow up and deals get done later," said Schorn, a veteran geologist who has attended the PDAC event since 1953.
With record cash flows, many miners have opted to initiate or raise dividends, while others are opting to use their new wealth to buy assets and secure long-term supplies. Exploration companies at the event are eager to show off their wares.
"We'll be looking at other opportunities, other companies that are (at PDAC)," said Chief Executive Robert Quartermain of gold explorer Pretium (PVG.TO). "We'll be meeting with majors so they fully understand the opportunity that we have."
Reference: http://www.reuters.com/article/2011...Type=RSS&feedName=basicMaterialsSector&rpc=43
