The Globe and Mail reports in its Friday edition halfway through another
annus horribilis for the gold
industry, one of the most prescient
calls so far has come from
National Bank Financial analyst
Steve Parsons. The Globe's Sean Silcoff writes Mr. Parsons's accurate prediction
in January was not about
the direction of gold prices, but
that one asset type was about to
heat up: junior gold exploration
firms. Given the wretched market
for juniors over the past two
years, this may come as a surprise
to some. Sure enough, gold companies,
primarily mid-tier players, have
been madly shopping for exploration
firms in recent months.
snapped up key minority
stakes of four junior
golds and bought a
fifth outright this past spring,
providing much needed financing.
Last month, New Gold formally offered to take over Rainy
River Resources, while
Teck Resources Ltd. this week
bought a strategic 9.9-per-cent
stake in Midas Gold.
Just months earlier, these tarnished
trophies could barely
scratch together enough financing
to keep the lights on. But they
have something precious to larger
miners as the industry heads
toward what Mr. Parsons calls an
impending "production cliff."
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