The Coming Wave Of Junior Gold Miner Buyouts

Spend a little time researching gold mining stocks and you’ll notice that once you get past a handful of familiar names there’s a long list of companies you’ve never heard of. Most of these are the proverbial “hole in the ground with a liar standing next to it.” But a fair number are real miners with legitimate properties, but too little capital to achieve “familiar name” status.

Gold mining, in other words, is ripe for consolidation.

But so far, despite a handful of big recent deals, that’s not happening. Here’s a chart from yesterday’s Wall Street Journal showing mergers and acquisition activity in oil and gas, mining generally, and gold mining specifically. At this level of resolution, gold mining M&A is almost invisible. In part, this is due to gold being so much smaller than those other two. But other factors are at work.

gold miner buyouts

The Wall Street Journal article cites a Catch-22 that’s keeping buyers and sellers apart:

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