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-- Posted Monday, 23 November 2009 | Digg This Article | | Source: GoldSeek.com
Goldcorp’s $238 million acquisition of gold junior Canplats last week is a reminder of the next phase of the gold price boom in which the largest gold companies will buy out the minnows of the industry. Big Gold needs to replenish its reserves in an era of declining global gold output and rising prices. Leaving these acquisitions much longer will mean that the best targets have gone, and the cost of the remainder will be that much higher. Bargain takeover Canplats shows that cheap gold is still available in the junior mining sector. Goldcorp got a bargain apparently with 1.7 million ounces of gold reserves bought for an average price of $133 an ounce. Of course it is better than that because as a publicly quoted group Goldcorp is more highly valued than a small company, so the reserves are actually revalued by a factor of five in the takeover. So the next gold rush is not gong to be guys heading to California with picks and shovels but investment bankers running their slide-rules over the junior mining sector. Buy these stocks now and you ought to become very rich! The obvious plumbs are those with under-priced reserves that can be revalued. But there are also many junior explorers sitting on gold claims that have far greater potential value to Big Gold. These assets can also be revalued in a takeover but also hold the potential for new gold discoveries at a time of surging gold prices. Gold claims In fact in previous gold price booms the biggest surge in share prices has always been among the gold exploration stocks, the juniors that own these gold claims. Surely the investment bankers looking at what gold companies ought to be buying will soon come across this not so generally appreciated fact and begin to make some interesting recommendations among the junior gold explorers. There is even a new ETF for junior gold companies, GDXJ, but the best buys will be the individual stock picks, although a rising tide will carry all ships higher.
-- Posted Monday, 23 November 2009 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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Gold Juniors About To Be Bought By Gold Majors
