By Angela Harmantas
TPP talks could mean trouble for CBC, two major mining acquisitions and decent results from embattled precious metals companies – here’s what we’re watching today:
The Trans-Pacific Partnership talks are ongoing in Maui and according to a briefing released by Wikileaks, the potential terms would mean that theCBC, Canada Post and other crown corporations would be required to operate as private enterprises. While nothing is finalized as of yet, apparently the US wants state-owned businesses to be covered under the TPP’s investor-state dispute clause, which would leave the Canadian government at the risk of being sued by a foreign player that felt it were at a competitive disadvantage because of the subsidies given to crown corporations. Watch out for this one as it could potentially slip under the radar as other issues take the fore. Harper and his government are pushing for a deal to be reached this weekend ahead of a likely election call, so we’ll see what there is to report on Monday.
Two major acquisitions in the mining world yesterday as Antofagasta Plc and OceanaGold Corp bulked up their assets at a fair price. First, Antofagasta emerged as savior for Barrick when it bought a 50 percent stake in the Zaldivar copper mine in Chile for US$1 billion. I think Barrick was looking to sell the mine outright but that amount of cash in the bank should bring some relief for the company’s financial woes, and really, who else is looking to buy a massive copper asset for nearly $2 billion? Next, OceanaGold acquired Romarco Minerals Inc, who were looking for a buyer for their open pit Haile Gold mine in South Carolina (yes, as in the United States). The nearly US$900 million deal is softened by the fact that Haile is one of the lowest-cost gold producers I’ve come across in a while, between US$400-500 an ounce.
The big precious metals companies reported their Q2 earnings this week and the results, while far from shining, weren’t quite as bad as what they could have been. Goldcorp slashed their dividend by 60% but saw higher profits, while Kinross and Agnico-Eagle reported lower earnings as well as solid cash flow. What do you think of the results? Were they better or worse than you expected?
Have a comment or suggestion? I’d love to hear from you! Contact me at angela@smallcappower.com or on Twitter: @aharmantas.
