miners hoard record amount of cash

Australian Financial Review

Miners hoard record amount of cash
Published 19 Aug 2010
Brendon Lau

QUOTE
"I am a great believer that we are going to have a year of M&A transactions across mining," said chief investment officer for ATOM Funds Management, David Shearwood.

"I think the M&A activity is going to be driven by a growing number of mid-tier mining companies coming either into production now or heading towards production."

Such companies with large ore bodies and low cost of production will make enticing targets to larger predators-particularly if they have overseas assets, as the proposed resources rent tax is tarnishing the attractiveness of the local sector, according to Mr Shearwood.

From that perspective, he pointed to Saudi Arabian copper and gold miner Citadel Resources and African uranium hopeful Extract Resources as potential targets.

Citadel's key project in the low-taxing country is scheduled to start up in 2001-12 and can be extended further.

Extract has made a large uranium discovery in Namibia, one of Africa's most stable nations, and is just 15 kilometres from Rio Tinto's Rossing uranium mine.
End Quote

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