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Get bigger and get noticed is the game right now

Kitco News

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.

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.