Conventional wisdom suggests ‘buy low, sell high’ is the best strategy. But as gold prices surge to new peaks daily, and some companies hang back from acquisitions, Leagold Mining Corp.’s chief executive Neil Woodyer believes he’s found a loophole to this age-old adage: In about a one-year timespan, he has built a Latin America-focused intermediate by snapping up assets that larger companies cast aside.
This week, the Vancouver-based company announced an estimated $264-million takeover bid of Brio Gold, which controls a series of mines in Brazil, and which Yamana Gold once owned but has been selling off since 2016.
The deal mimics Leagold’s $350 million acquisition of the Los Filos Mines in Mexico from Goldcorp in April 2017, in that both assets were deemed non-core by more senior mining companies.
“We manage in a different way from a major mining company,” Woodyer said in an interview. “Not better but different.” Between the two deals, Leagold expects to produce as much as 475,000 ounces of gold in 2018, with production ramping up to 700,000 ounces by 2020.
That puts its gold production on the trail of better-known companies such as B2Gold, which produced 630,000 ounces in 2017, or Yamana Gold, which not including Brio’s production, put out 977,000 ounces — although it also has significant silver and copper production.
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