TORONTO(Reuters) – Mid-tier miners such as Kinross Gold, Iamgold and Agnico Eagle Mines, seeking to bolster production, would likely bid for mines to be sold following two recent gold mega-mergers, investors and bankers said.
Barrick Gold and Newmont Mining said they will focus on the best-performing mines following their respective acquisitions of Randgold Resources and Goldcorp. This has prompted expectations of mine sales around the world over the next few years.
While the two acquisitions have spurred speculation about a pick up in long-dormant gold M&A, the difficulty of raising capital for larger deals makes single-asset transactions more likely, bankers said.
Mid-tier miners need to boost production after years of growth-killing cost cuts. Also driving demand will be the scarcity value of large mines that have not traditionally be up for sale.
“They aren’t tier one mines or world-class, but a lot of them are very good,” said Christopher Mancini, a mining industry analyst for the Gabelli Gold Fund, who expects Kinross and Iamgold to bid for some of the mines.