Canadian Mining Expert Anticipates More Mergers & Acquisitions in 2012

Canadian mining business development expert Catherine McLeod-Seltzer is predicting many more mergers and acquisitions in 2012 as small producers face a credit crunch. Bigger producers, such as Kinross, Barrick, Yamana, and Goldcorp battle for higher and higher revenue streams.

Smaller mines are shy of traditional financing methods, such as public equity offerings or bank loans, which makes them especially attractive to buy-outs as an exit strategy. This is something McLeod-Seltzer knows very well, having sold Arequipa Resources for around $1 billion after 3 years of operations, and Peru Copper sold for around $800 million.

The stock market has cooled down considerably for mining stocks, with Canadian  ETF S&P/TSX Global Mining Index dropping over 30% in the last year.

From 11 equity offerings in April, Canadian mining companies raised $72 million compared to $620 million in April 2011. So far this year, the funds raised is $2.1 billion – down 37% from 2011.

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