How to Spot Buyout Clues in Today's Resource Market
-- Published: Tuesday, 3 November 2015 | Print | Disqus
Source: JT Long of The Gold Report
What if you could tell before a press release comes out that a company is poised to be bought out, possibly at a nice premium? Sounds good, right? By watching historic patterns, that might just be possible. The Gold Report reached out to experts who have been around through enough cycles to know and asked for the clues they watch that an acquisition might be imminent. From location and early investment to derisking levels, you just have to know what to look for to position yourself for a liquidity event.
There are certain points in market cycles where buyouts just make more sense than in others. Chen Lin, author of the popular stock newsletter What Is Chen Buying? What Is Chen Selling, sees a recent flurry of mergers and acquisitions (M&A) as an indication that we are, indeed, at the bottom of the gold market and can expect more consolidation—and at a premium.
...
Naming the Targets All of our experts have watchlists of companies they think could be acquirers and acquirees in the coming months. Lin doesn't think OceanaGold is done shopping yet. Like Mazumdar, in the wake of the Pacific Rim, Romarco and the Waihi gold mine deals, Lin took notice when OceanaGold announced a joint venture agreement with Gold Standard Ventures. "OceanaGold put in money to acquire 14.9% of Gold Standard Ventures as a premium to the share price and it is still buying Gold Standard Ventures stock on the open market. That's a typical sign, the interest of a major company in a junior," Lin says. "Gold Standard Ventures is currently drilling the south part of the deposit. Drillers already found a deep sulphide-based gold deposit on the north side. It's wide open space. There are lots of possibilities. Management now has a lot of capital to do exploration thanks to the recent investment from OceanaGold. That makes it an attractive takeover target."
Lin is watching a few other candidates that could be buyout targets. "One of my favorite stocks, Pretium Resources Inc. (PVG:TSX; PVG:NYSE), is developing its mine in northern British Columbia. It is very high grade, low cost. So that will be a nice takeover target for other companies, either in the development stage or after it gets into production. The mine looks so good I think any gold major with the ability would like to buy it."
...
Lin's advice is to find a good company and hold on to it. "When the market turns, they can often rise very quickly. I think M&A activity in the gold sector will accelerate."
Disclosure: 1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report and The Life Sciences Report, and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None. 2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Klondex Mines Ltd., Asanko Gold Inc., Gold Standard Ventures Corp., Richmont Mines Inc., Pretium Resources Inc., Integra Gold Corp., Newmarket Gold Inc. and Romarco Minerals Inc. Gold Standard Ventures Corp. is a Banner Sponsor of Streetwise Reports. Goldcorp Inc. is not associated with Streetwise Reports. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services. 3) Chen Lin: I own, or my family owns, shares of the following companies mentioned in this interview: OceanaGold Corp., Gold Standard Ventures Corp., Pretium Resources Inc. and Alexco Resource Corp. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview. 4) Joe Mazumdar: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview. We note that Agnico Eagle Mines Ltd., Roxgold Inc. and Dalradian Resources Inc. are investment banking clients of Canaccord Genuity. 5) Gwen Preston: I own, or my family owns, shares of the following companies mentioned in this interview: Inca One Gold Corp. and Standard Tolling Corp. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview. 6) Brent Cook: I own, or my family owns, shares of the following companies mentioned in this interview: Kaminak Gold Corp., Premier Gold Mines Ltd., Asanko Gold Inc., Nevsun Resources Ltd. and Richmont Mines Inc. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview. 7) Bob Moriarty: I own, or my family owns, shares of the following companies mentioned in this interview: Gold Canyon Resources Inc. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview. 8) Marin Katusa: I own, or my family owns, shares of the following companies mentioned in this interview: Midas Gold Corp. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview. 9) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent. 10) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. 11) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.
The content on this site is protected
by U.S. and international copyright laws and is the property of GoldSeek.com
and/or the providers of the content under license. By "content" we mean any
information, mode of expression, or other materials and services found on GoldSeek.com.
This includes editorials, news, our writings, graphics, and any and all other
features found on the site. Please contact
us for any further information.
Live GoldSeek Visitor Map | Disclaimer
The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy
or completeness of the information (including news, editorials, prices, statistics,
analyses and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or materials contained
on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC,
is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.