Video: Junior market dominated by ‘the lame, the halt and the blind,’ says Rule
Over two-thirds of today’s junior miners are essentially worthless, says resource speculator Rick Rule.
The number of mergers and acquisitions in the mining and metals industry declined to the lowest in a decade last year as much anticipated private equity interest in the sector evaporated.
Mining and metals M&A have also become incestuous: industry insiders were responsible for 82% of deal value and 71% of deal volumes. The 11 – only 11 – deals worth more than $1 billion in 2014 were all miners buying mines too.
All eyes are on Mick Davis and his $5.6 billion X2 fund that have so far failed to pull the trigger despite the likes of Anglo-American, BHP Billiton and Vale putting assets up for sale.
The deals that have been pushed through from outsiders (or ex-insiders to be more precise) have been small, highly targeted (niobium anyone?) and often go unnoticed (it’s called private equity for a reason).
Perhaps that’s to be expected at the fag end of the supercycle, but at least there is some activity and ongoing interest as Bloomberg reported today.
Audley Capital Advisors is seeking to add to its metals resources after buying Talvivaara Mining Co.’s nickel operation in Finland, according to the former Anglo American Plc executive heading the hedge fund’s mining business.
“I came to Audley with a view to be able to go in and operate some assets,” John MacKenzie, who led copper and zinc operations at Anglo before joining the fund in 2013 as chief executive officer of mining, said in an interview. “Audley Capital is constantly on the lookout for mining opportunities,” including nickel, zinc, copper and metallurgical coal, he said.
Continue reading at Bloomberg Business.
