This Is Just The Start Of Consolidation In The Mining Sector - Great Panther CEO
(Kitco News)- Consolidationof smaller mining companies in the current low price environment will bebeneficial for the sector as a whole, according to one mining executive.
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| Jim Bannantine, president and CEO of Great Panther Silver |
In atelephone interview with Kitco News, Jim Bannantine, president and CEO of GreatPanther Silver (NYSE: GPL, TSX: GPR), said that he thinks investors are only seeing the start to more mergers within the miningspace as companies are beginning to take advantage of low valuations in themarketplace.
Bannantine’scomments come a week after Great Panther announced the acquisition of BeadellResources and its Tusano Gold mine in Brazil.
“One ofmy greatest fears has been that one day I would wake up and find the window formaking deals closed,” he said. “That window is still open and I think we willsee a lot more deals being made.”
Bannantineadded that more M&A activity could be what finally brings investors back tothe marketplace.
Bannantinesaid that the acquisition of Beadell has been the culmination of a 14-monthintensive search. He explained that Great Panther has been actively looking foropportunities to expand its production pipeline and will now have threeproducing mines in the Americas with a fourth expected to come back on line bylate 2019.
Thecompany plans to be a mid-tier producer, producing 250,000 ounces of gold andsilver by 2020. Bannantine added that he sees the mid-tier sector as the sweetspot in the mining sector.
“Thecompanies are big enough to mitigate the risks faced by smaller mines, but theyare still small enough to see strong growth,” he said.
“Particularlyin our company, we will still be on the small side of the intermediate space sothere is still plenty of growth before us,” he added. “This acquisition givesus a great growth profile that we can build on.”
Not onlydoes Great Panther’s latest purchase potential push the company into a newmining category, but it also adds further diversification for the company,Bannantine said. Great Panther is primarily a silver producer with its mines inMexico.
Beadell’sTucan mine has a resource of about 3.7 million ounces of gold.
Underthe agreement announced last week, which is valued at $105 million, Beadellinvestors will receive 0.0619 common shares of Great Panther for each ordinaryshare of Beadell. The offer represented a 51% premium from the Sept. 21 closingprice.
Upon completionof the transaction, existing Beadell and Great Panther shareholders areexpected to own approximately 38% and 62%, respectively, of the combinedcompany.
GreatPanther was actually the first company to announce an acquisition during theDenver Gold Form, but the news was overshadowed after Barrick Gold Corp (NYSE: ABX, TSX: ABX)andRandgold said they would merge to form the world’s largest gold mining companywith a market of around $18 billion.
The third merger agreement in two weeks cameMonday after Americas Silver Corp (NYSE: USAS, TSX: USA) announced that it would acquire PershingGold (Nasdaq: PGLC, TSX: PGLC).
By Neils ChristensenFor Kitco News
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