Video News/Digging Deep

David Erfle, Founder and Editor of JuniorMinerJunky.com, says stronger junior balance sheets are changing the dynamics of mining M&A by giving companies more room to advance projects before considering a sale. Speaking with Kitco Mining, Erfle also points to Agnico Eagle’s strategy of taking strategic positions in juniors before committing to full acquisitions, calling it a more disciplined approach than the aggressive buying seen in the previous cycle. Erfle also says the bar for project economics has moved higher. Asked whether a 30% to 35% IRR at $3,500 gold now looks marginal, he said the market is “probably considering that marginal” and added that a good project should deliver “50% and higher.” Liberty Gold’s Black Pine project stood out to him after reporting a 69% after-tax IRR at the $3,500 gold sensitivity case.