IMO the situation was very different with ALD/SBM. In that case ALD is a company with good (but low grade) resources, in need of acquiring a larger size in order to raise money ($200m) to exploit its sulphides. Its board had not met its commitments to the market in terms of mining costs (IGR have only had 2 slips this quarter - $1400/ozs costs & not counting the costs of the stockpile into their mining costs).
SBM has good current cash flow, can finance the $200m, needs resources so as not to see declining revenues in 2013 and has the mining expertise to get costs down. Also SBM needs to get into overseas markets where ALD is located. An attraction of ALD is that they have operations in developing countries where the elephants are and the politics and local community responsibilities very different.
For IGR to fill the same gap their resource levels will need to rise significantly and get the Aldiss area up and running as this is currently a stranded resource.
IMO where IGR would consolidate would be from a take over from a major (e.g Barrick, Anglogold, Newcrest etc) or merge (in a genuine sense - ALD was taken over) with another miner of about the same size.
IGR Price at posting:
39.0¢ Sentiment: Hold Disclosure: Held
