[MEDIA] Should Gold Miners be Acquiring Copper? Citi banker...

Should Gold Miners be Acquiring Copper?

Citi banker suggests there are more red metal acquisitions to be made by gold miners

Rowan King said Citi’s gold clients outside of Australia were very in tune with the thematic and keen on copper.

“But our Australian clients, other than Evolution, for the most part, are very cautious about that thematic, and they listen to shareholders, and shareholders say, ‘no, we want your gold pure-play premium. Don't do anything silly. Don't go and buy another commodity’,” he said.

“We hear that, but gold won't be where it is forever. And like I was saying before, copper is something everyone wants, no matter what global thematic you poke a stick at.

“So, we hope there's a bit more activity in that space, taking advantage of that relativity, but it does need some certainty out of the US before big strategic bets can be placed.”

Evolution executive chairman Jake Klein told the same event that the record gold price was not an impetus to do deals.

“We're all operating in cyclical businesses, and the time to buy is when prices are down and there's a motivated seller. I don't see any motivated sellers in the gold industry at the moment. I see people dining out at fine restaurants, enjoying the benefits of a high gold price,” he said.

“I think we've been more disciplined than we have in the past, but you're seeing signs of ill discipline creep in. You're seeing lots of deals being done now.

“It's hard to argue that it's bottom of the cycle at the moment. We may not be at the top, but we're not at the bottom, and they are deals being done. Low grades are being mined, and that's where always people get exposed when the price goes down.”

King noted Klein’s comments but said the deal-making in the gold space would roll on.

“There is an argument for those that are leveraged operationally to the gold price to be using that opportunity to improve their portfolios and even extend life or buy a higher quality, lower cost asset, so that's something that that we should see continue to play out,” he said.

“And equally, it's a good time to be selling assets. If you've got a portfolio with a high-cost asset, it's a very logical time to be recycling that into a smaller company that can probably manage it better and bring costs down, so the gold thematic will still play out to a greater extent.”

https://www.miningforum.live/p/should-gold-miners-be-acquiring-copper

Cheers

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.