Mood at PDAC Weighed Down by Macro and Micro Concerns: Soar Financial Partners
Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!
(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."