Dave Erfle, Founder and Editor of The Junior Miner Junky, joins us to review the trend of more recent “mega-mergers” with the majors, also spawning even more mergers and acquisitions within the mid-tiers and junior stocks. Last Monday we saw the announcement of Newmont Mining (NEM) putting in a bid to acquire Newcrest Mining (NCM.AX), on the heels of the recently closed Agnico Eagle (AEM) and Panamerican Silver (PAAS) acquisition of Yamana (AUY). Then this Monday we saw more M&A news with B2Gold (BTO) (BTG) announcing it had placed a bid to acquire Sabina Gold (SBB) (SGSVF), and Victoria Gold (VGCX) (VITFF) announcing a bid to acquire ATAC Resources (ATC) (ATADF).
Dave provides some insights on what this may mean for garnering more generalist investor interest, and what other kinds of M&A deals we may see in the sector next. We also discuss how these transactions can be both positive and negative sentiment drivers in the space. Sure, takeovers provide a clear exit strategy for investors, freeing up capital to rotate into other PM stocks, but also create negative sentiment in the space for many longer-term buy and hold investors that sat in these junior companies for years sometimes, only to barely break even break, make muted gains, or worse lose money. In general though, mergers and acquisitions activate the animal spirits of investors as they speculate on which companies will be next?
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