Get bigger and get noticed is the game right now
With mega-mergers in the mining space mostly done, the next group to watch is mid-tier miners, said Joe Mazumdar, editor at Exploration Insights.
Kitco talked to Mazumdar at the Metal Investor Forum in Vancouver last week. He discussed the M&A moves miners have been making.
In the last two years seniors conducted big M&A deals, such as Barrick-Randgold and Newmont-Goldcorp. Mazumdar said the seniors needed to get bigger to get noticed by generalist investors.
"[Seniors] are trying to create a business that is self-funding, issuing stable dividends but is focusing on the gold sector."
Mazumdar believes the mega-merger phase is done. Next up is the mid-tier miners, which are buying up assets hived off by the seniors, so they can get scale, too.
"You've seen a lot of mid-tier operators buying assets, sometimes buying low-margin assets in low-risk political jurisdictions but add to their capital profile, increase their market cap and can potentially add more generalists [investors]. That seems to be the game right now: to get bigger and to get noticed."
Listen to our conversation with Joe Mazumdar.