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Canadian mining heavyweight Keith Neumeyer is taking advantage of awful market conditions to snap up promising assets left and right.
First Mining Finance Corp., Neumeyer’s “mineral bank,” unveiled a three-way deal this week in which it will buy Gold Canyon Resources Inc. and PC Gold Inc. for a total of about $66 million in stock. This comes less than two months after First Mining acquired Coastal Gold Corp., its first acquisition.
Vancouver-based First Mining only went public in April, but the company sees this as the ideal time to buy junior mining assets on the cheap. Juniors are suffering through their worst bear market since the Bre-X crisis because of sinking commodity prices and a near-total lack of financing options.
“We don’t want the market to turn around soon, because we really want to load up on assets,” Pat Donnelly, First Mining’s president, said in an interview. “And so the longer this bear market continues, the better for us.”
Neumeyer, First Mining’s chairman and founder, also founded First Quantum Minerals Ltd. and First Majestic Silver Corp. during poor markets, and those companies went on to have tremendous success. However, his strategy is very different this time around.
Rather than build another mining company, the idea with First Mining is to buy assets while prices are low and hold onto them. When market conditions do turn around, the company plans to strike deals with third parties that would move the projects into production.
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