Metals Investor Forum September 2018 - Joe Mazumdar, Economic Geologist, Exploration Insights

By joe mazumdar / October 03, 2018 / www.youtube.com / Article Link


MIF September 28-29, 2018 in Vancouver: Joe Mazumdar, Economic Geologist, Exploration Insights - "Precious metals market. Diversified perspectives from Colorado".Presentation Summary:A major institutional equity portfolio manager has suggested that we may be at the tail end of a protracted capitulation reminiscent of the early 2000s that requires some catalyst to reignite the fear of a systemic or market risk that would trigger investors to increase their exposure to the gold sector.Generalists have been more keen on passive funds over active funds, which has driven its growth over the past several years suggesting that there is less money available for mining companies, especially illiquid ones. Private equity presents another source of funding as one multi-billion dollar fund has created a small fund with the mandate to invest in junior explorers. The fund will attempt to lever its clients to potential discoveries by writing smaller checks but more of them.Private equity funds have also been taking some companies private, which adds another suitor for unloved assets. Another potential suitor is Australian producers, who are taking advantage of their premium valuations to grow their portfolios by increasing their presence in this hemisphere. Finally, Chinese entities are also taking advantage of market dislocations. In summary, markets may continue to be fickle but M&A transactions are a good way to ford the valuation gap. We will continue to seek companies that are proving up deposits that would interest enough suitors to generate competitive tensions and a healthy takeout premium.

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