With M&A increasing and cash in the bank, miners and investors should be heading to London this November”
Chris has extensive mining experience, including underground work with Anglo American Corp in South Africa, consultancy with both SRK in Johannesburg and Golder Associates in the UK, and stockbroking with Schroder Securities in London.
Mines and Money: What’s the climate like now for Mergers M&A?
Chris Hinde: Mergers and acquisitions in the mining sector are back in vogue. After two extremely quiet quarters, the value of M&A transactions in the three months to end-June is back over US$5 billion. As reported by S&P Global Market Intelligence in its recent State of the Market report, there were 37 deals of over US$5 million announced during the June quarter.
Mines and Money: How does this compare to previous years?
Chris Hinde: Although still well short of the recent peaks of over US$8 billion recorded in the June quarter of 2016, and almost US$11 billion in the September quarter of 2015, there are clear signs of resurgent interest in M&A, especially for the base metals.
Mines and Money: Where did deal flow come from?
Chris Hinde: Despite an overall quarter on quarter increase in the number, and value, of M&A transactions, there was a decline in the value of activity for gold assets. Although the number of significant gold deals remained unchanged at 17 in the three months to end-June, S&P Global Market Intelligence reports that the value of these transactions slumped from US$1.40 billion to US$830 million. Instead, over 81% of the value of the deals during the June quarter came for copper and zinc assets.
Mines and Money: Which copper and zinc focused investors and miners at this year’s Mines and Money interest you?
Chris Hinde: Specialist investors attending this year’s Mines and Money conference in London, including EMR Capital, Red Kite and ZCCM Investments, are likely to reflect the current market interest in copper and zinc assets. Projects attracting particular attention might include those owned by Polar X, Merdeka Copper Gold, Thunderstruck Resources and Foran Mining.
Mines and Money: When you look at market capitalisation is the mining industry a ‘buy’ or a ‘sell’?
Chris Hinde: The mining industry’s assets look relatively undervalued. The aggregate market capitalization of the industry’s 2,400 listed companies is near a four-year high of almost US$1.5 trillion (twice what it was in January 2016). The industry’s market valuation peaked, however, at US$2.3 trillion at the start of 2011,