Acquisition Speculation on the Rise as Yamana Gold Acquires Extorre for $414 Million
12.07.2012 | Marketwire
Five Star Equities Provides Stock Research on Brigus Gold and Rubicon MineralsNEW YORK, NY -- (Marketwire) -- 07/12/12 -- Junior Miners have been hit hard in 2012 as gold prices have struggled to gain any upwards momentum. The Market Vectors Junior Gold Miners ETF (GDXJ) has fallen over 25 percent year-to-date. The industry in recent week has been a hotbed of acquisition speculation after Yamana Gold announced it had acquired Extorre Gold Mines Ltd. for $414 million, or $4.26 a share. Five Star Equities examines the outlook for companies in the Gold Industry and provides equity research on Brigus Gold Corp. (NYSE: BRD) and Rubicon Minerals Corp. (NYSE: RBY) (TSX: RMX).
Access to the full company reports can be found at:
www.FiveStarEquities.com/BRD
www.FiveStarEquities.com/RBY
Junior miners with quality mining projects have been attractive targets for major gold companies in 2012 as many juniors have seen share prices plummet due to poor market conditions. While Yamana Gold did pay a 68 percent premium for Extorre, shares of the company were trading as high as $15 last July.
"Part of it was market conditions, and part of it is the coincidence that we completed our due diligence and came to the conclusion that there was value in the asset and value in the purchase," Yamana chief executive Peter Marrone said in an interview.
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Brigus Gold is a high quality emerging mid-tier gold producer with projects in Ontario and Saskatchewan. With approximately 1.86 million ounces of gold in reserves, increased cash flow, and projects ready for development, Brigus Gold is well positioned for growth. During the second quarter of 2012, the company produced 18,254 ounces of gold at an average grade of 3.30 grams per ton and a projected cash cost of between $800 and $825 per ounce.
Rubicon's focus is in highly prospective gold producing areas of North America. It controls over 65,000 acres of prime exploration ground in the prolific Red Lake gold camp of Ontario, Canada, which hosts Goldcorp's high-grade, world class Red Lake Mine. Shares of the company have fallen over 20 percent year-to-date.
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