M&A in Copper is heating up and now according to Reuters Fund Managers See Value In Copper Miners. Now projects like Los Azules will be moving onto the M&A radar screens in the industry, it will be interesting now to find out who will be the first to pick this developing story and issue a valuation report.
"Some of big funds have increased exposure to copper
* Copper market seen tilting into deficit from 2016
* Lack of investment to feed next boom-analysts
By Silvia Antonioli
Copper miners' shares represented by the Thomson Reuters GFMS pure-play copper companies index fell by almost 40 percent over the same period. Reuters."
All slides in this part of the post are from McEwen Mining presentations.
End of slides from McEwen Mining presentations.
"Please do not get very excited and read my legal disclaimer carefully, but as we have seen before this kind of price action in Lumina Copper case can tell us that something is going on. It can be the simple arbitrage play by the big guns, but the market cap of Lumina copper is already higher than the calculated at the announced acquisition price by First Quantum Minerals. The announced price was CAD 470 million. Lumina Copper has 46,978,235 Fully Diluted shares, price at CAD10.36 gives us already CAD 487 million! I do not think that it is bet on rising Copper price or rising First Quantum share price - you can more safely buy the First Quantum shares in that case. Somebody thinks that Taca Taca can be worth more...Let's see what the next couple of weeks will bring us here. I will repost my yesterday's entry and you will appreciate later why it is important. Now Los Azules Copper will be making its rounds in the industry.
As we have discussed before, we have really Hot Winter In Argentina for mining M&A. Now Frik Els confirms "China's Top Gold Firm Talking to Barrick Gold, Has Friedland "hotline":
Investments in "politically stable" countries in Latin America and Africa are also being considered Song said. Mining.com"
"We are working on the corporate structure now, which will allow to develop Shotgun Gold with the potential new strategic partner on J/V basis like we are doing with Ganfeng Lithium in International Lithium. You can find more information in the Shotgun Gold Project presentation below, on our website and give us a call to discuss it at any time. Read more."
Gold smells Inflation and is moving higher these days, Chinese quest for resources will bring new deals into the mining M&A space and projects like Shotgun Gold will be on the radar screens of investors again.Now Copper is making headlines as well and Wall Street Journal reports "Copper Prices Seen Marching Higher":
"Some investors are turning bullish on copper prices, brushing aside concerns sparked by a probe into the metal's place in China's financial system. Instead, these investors are focusing on a rebound in manufacturing world-wide, which they expect will boost copper demand broadly. Increasing consumption by factories will offset any decline in the use of copper as collateral to back loans as a result of the probe, these investors say. China is the world's biggest copper consumer and importer, though how much of the metal goes to manufacturers is unclear. WSJ."
As you already know, my personal take on the Missing Collateral in China is Bullish for the metals:
"In my personal opinion, we are witnessing the same game of the rehypothecation as it is happening with FED, BIS, Investment Banks and Gold. This, actually missing metal as collateral, will be the very bullish set up for the commodities markets. After initial selling due to the margin calls and unwinding of Paper Positions in the market, Mr Market will realise that all these metal accounted for the supply and demand picture is NOT there. Industrial demand will stay in place, but Supply which was supposed to be hoarded in the warehouses is missing: the collateral was used a few times for the different transactions. Read More."
"Frik Els provides a very good insight into the Chinese deal culture and mining M&A particularly. Las Bambas deal is not only the very good indicator of the turning mining cycle, but also provides guidance for the smaller companies in China to go on The Hunt For Copper and other commodities. You can witness this approach in our particular case of Strategic Commodities with International Lithium and Ganfeng Lithium as well. Read more."