Interesting day on the ASX for gold stocks with Saracen Minerals and Northern Star announcing a $16bn merger. With gold at these levels, could this transaction kick-off a wave of M&A deals in the sector?... Particularly in the smaller end of town...?
The barrage of research analyst commentary released today got me thinking about FFR and it's likelihood of being a take-over contender. As we all know, the Yalgoo Gold Project is located between Ramelius Resources’ (RMS) 6Moz Mt Magnet gold mine and Silver Lake Resources’ (SLR) Deflector copper-gold mine. So let's think about RMS and SLR as potential acquirers...
- RMS has been on a strong run of late however it is known to the market that it's mine life is now less than 5 years and is now ready to look for it's new growth trajectory. FFR's Yalgoo asset is a stones-throw away from the Mt Magnet gold mine and the commercial synergies sound accretive.
- SLR is also nearby to Yalgoo however their CEO, Luke Tonkin is known in the market to be m&a-shy and is conservative in his approach. However, their portfolio of assets are also old so it begs the question whether FFR could be a potential target. Let's also not forget that Simon Lawson was a Senior Mine Geologist at SLR and has had prior success upgrading the Daisy Milano Gold Mine Resource.
In my eyes, both SLR and RMS are unlikely to want to spend overs for an operating gold company and have the background that would rather see them acquire a junior explorer (such as FFR) and spend their cash reserves on expediting drilling.
What do we all think about gold m&a in the local sharemarket? And would be interested to hear everyone's thoughts on FFR as a potential target.
All is imo, dyor.
