By Otto Rock
The Barrick/Randgold (and if we can get “Bristow’s Randick” into common usage the world would be a sunnier place) is being mooted in many corners as a catalyst for a new raft of M&A activity among the larger caps. Quite right too, it was my first reaction when hearing the news on Saturday (you heard Monday :-)).
But what companies are now in-play? Well for me, two stick out like proverbial sore thumbs.
1) B2Gold (BTG) (BTO.to): Way too cheap for what it is, the market has been leery due to its large debt book but now Fekola has become a major cash cow, that will drop quickly. And a major won’t fret about adding a billion to its liabilities for a year when it’s also adding nearly a million ounces of very profitable production at the same time (or 800k if The Clive spins out the Nica gigs). Cheap as chips right now, ready for a re-rate.
2) Alamos Gold (AGI.to) (AGI): This for a different reason, the big options volumes that AGI has been doing recently suggest an interloper. The wrinkle here is that McCluskey is an entrenched asshole and the only way of getting AGI out of his grasp is via a hostile bid. They aren’t normally successful in the mining world. AGI may become a target soon, but the outcome is less certain.
So those are my two. Got any better ideas?
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