The Canadian gold stocks we’ve picked out have qualities that make these companies top M&A targets
SmallCapPower | March 6, 2019: On January 14, 2019, Newmont Mining and Goldcorp announced a merger to create the world’s premier gold mining company. The combined entity would have an estimated production of 6 to 7 million oz/Au annually, as well as an enterprise value of ~US$32.2B, in comparison, Barrick’s market cap is now at ~US$29.3B. Additionally, Great Panther Silver just completed its acquisition of Beadell Resources Limited, officially changing its name to Great Panther Mining Limited. The acquisition is expected to add ~200,000 oz/Au of production to the combined entity, which pushes Great Panther into the ranks of an intermediate precious metals producer. This has also been followed by Barrick’s US$17.8B hostile takeover bid for Newmont. As a result, the industry should be prime for further consolidation. Today we have identified four Canadian gold stocks that could be potential M&A targets. On March 4, we published an article about mining stocks seen as potential takeover targets. To view this article please click here.
*Share prices are as at close March 4, 2019, data obtained from S&P Capital IQ
B2Gold Corp. (TSX:BTO) – $4.06
B2Gold is a Canada-based gold producer with four operating mines. The Company’s assets include the Otjikoto open pit mine located in Namibia, the Masbate open pit mine located on Masbate island by the Philippines, the La Libertad open pit mine located in Nicaragua, and the Fekola gold project in Mali. In F2018A, the Company recorded consolidated gold production of 953,000 oz, an increase of 51% over the prior year. For the full year 2018, cash operating costs were between US$505-$550/oz, with all in sustaining costs (AISC) coming in at between US$780-$830/oz. Management has provided production guidance for F2019E, in which the Company is expected to produce between 935,000-975,000 gold ounces, with a projected cash operating cost between US$520-$560/oz, and AISC of US$835-$875/oz. With an average gold price of ~US$1,250/oz, the Company expects to generate cash flow of $360M in 2019.
- Market Cap: $4,020.9 Million
- YTD Return: +3.1%
- 30-Day Average Volume: 3,227,000
- 90-Day Average Volume: 3,529,000
IAMGOLD Corporation (TSX:IMG) -$4.40
IAMGOLD is a Canada-based gold producer with five operating mines. The Company’s portfolio includes the Rosebel gold mine located in Suriname, the Essakane Gold Mine located in Burkina Faso, the Westwood project in Quebec, Sadiola Gold Mine and Yatela Gold Mine both located in Mali. For F2018A, the Company produced 882,000 oz of gold, at an all-in sustaining cost (AISC) of US$1,057/oz, and increased probable and proven resources by 23% YoY. Management provided guidance for F2019E, with its production target expected to be 810,000-870,000 oz of gold, with a projected cash costs of US$765-$815/oz, and AISC of US$1,030-$1,080/oz.
- Market Cap: $2,059.1 Million
- YTD Return: -12.0%
- 30-Day Average Volume: 1,928,000
- 90-Day Average Volume: 1,889,000
New Gold Inc. (TSX:NGD) -$1.15
New Gold is a gold and copper producer with a portfolio of four assets: The New Afton and Rainy River Mines in Canada, the Mesquite Mine in the United States, and the Cerro San Pedro Mine in Mexico. In addition, the Company is an owner of the Blackwater project located in Canada. The assets produce gold, with copper and silver by-products. Management has provided guidance for F2019E, with targeted production expected to be 300,000-335,000 oz of gold and 75-85M pounds of copper, with a projected cash costs of US$740-$820/oz, and AISC of US$1,330-$1,430/oz.
- Market Cap: $666.0 Million
- YTD Return: +4.6%
- 30-Day Average Volume: 1,788,000
- 90-Day Average Volume: 1,509,000
Eldorado Gold Corporation (TSX:ELD) – $5.65
Eldorado Gold is a Canada-based gold production and exploration company. Its assets include the Kisladag and the Efemcukuru mines in Turkey, the Tocantinzinho project and exploration activities in Brazil, the Stratoni mine, the Olympias, Skouries, Perama Hill and Sapes projects, in Greece, the Certej project in Romania. In F2018A, the Company produced 349,147 oz of gold, a 19% increase over 2017, with a cash operating costs of US$600-$650/oz, with AISC of US$1,200/oz. For F2019E, management guidance had indicated that production is targeted to be between 390,000-420,000 oz of gold.
- Market Cap: $894.4 Million
- YTD Return: +30.8%
- 30-Day Average Volume: 1,165,000
- 90-Day Average Volume: 843,000
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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