Gold Miners Are on the Hunt for Assets as Prices Climb
Bloomberg - Feb 11, 2015
Gold producers with cash on hand are on the hunt for cheap mining assets as rising prices drive shares higher.
During a 12-year bull run that ended last year, about $30 billion in debt was racked up by companies that mine gold. Those that minimized borrowing then are in the best position now to scoop up mines from rivals with weaker balance sheets, said executives at the Investing in African Mining Indaba conference in South Africa, the biggest such gathering on the continent.
Already, $2.7 billion in deals have been announced or completed this year within the industry, including Monday’s $1.1 billion offer for Rio Alto Mining Ltd. by Tahoe Resources Inc. It’s an early leg-up on the $10.5 billion in deals last year.
“Gold is one of the brighter spots out there in the commodities space today,†said Rajat Kohli, head of metals and mining at Standard Bank Group Ltd., Africa’s largest lender. “I would expect corporate activity to be reasonably pronounced in gold, not just in Africa but globally. We will see a few transactions, definitely.â€
