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Mood at PDAC Weighed Down by Macro and Micro Concerns: Soar Financial Partners

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(Kitco News) -  The sentiment at PDAC was "bit sobering" this year, says Kai Hoffmannn, CEO of Soar Financial Partners.

The PDAC's annual convention is held during the first week of March in Toronto.

Hoffmann, who spoke with Kitco News on the convention's final day Wednesday, said macro concerns like the ongoing China-U.S. trade talks are weighing on base metals. The Trump Administration is currently in a trade spat with China, one of the top importer of metals. China's economy is also slowing.

The major issue within the sector, micro concerns, is the Barrick-Newmont merger. Hoffmann says the merger is creating a bit of a vacuum, especially around the mid-tier producers. He predicts the industry will see a pause or slow-down in M&A activity while the Barrick-Newmont merger plays out.

"There are $14B in assets for sale [if the deal goes through] and mid-tier producers, especially the ones that have access to capital, are probably waiting to see what's falling off the plate," says Hoffmann.

During previous large mergers, such as Barrick acquiring Placer Dome in 2005, Hoffmann says mid-tiers picked up assets that re-shaped the whole industry.

The attention the merger is bring to the industry as a whole is a positive, says Hoffmann.

"And if [the merger] doesn't become a nasty fight, it should be good for the industry, especially with the FANG stocks taking a dip in 2018." 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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