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Gold deals dominate in canadian q1 mining m&a activity-kpmg by 123wert sdfsf
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Gold deals dominate in canadian q1 mining m&a activity-kpmg |
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Business,Business News,Business Opportunities
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RENO (MINEWEB) - In a global scene that saw a notable increase in mining M&Aactivity in the first quarter, "Canada was neither a major targetnor a major acquirer," Big 4 accounting firm KPMG observed in aquarterly mining M&A newsletter Wednesday. Nevertheless, gold was the main commodity of interest for Canadiantransactions, accounting for almost 60% of mining M&A dealvalue and volume, KPMG noted. During the first quarter of the year, Canada recorded 25transactions above US$10 million in value, four of which werecategorized as strategic investment by KPMG. "After rallying in the last quarter of 2011, mining M&Aactivity in Canada fell back to almost the same levels asexperienced in Q3 2011," said KPMG.
"Deal value in the firstquarter was down over 50% from Q4 2011, characterized by flower‘blockbuster' multi-billion dollar deals." "Only one transaction in the quarter topped the billion dollarthreshold. Despite the lack of large trades, overall deal volumeremained relatively steady," KPMG added. The largest Canadian mining transaction in the first quarter wasthe US$1.5 billion acquisition of Minefinders by Pan AmericanSilver. "Also in the gold space, AuRico Gold announced the sale ofits Stawell and Fosterville properties in Australia to CrocodileGold for US$105M." Meanwhile, Canadian copper sector deals dwindled in the firstquarter, according to KPMG.
"Only three transactions were announcedin the period for a total value of US$600M." However, during the first quarter Rio Tinto effectively tookcontrol of Ivanhoe Mines, taking its total ownership in the hugeMongolian copper/gold development to 51%. "One of the more interesting joint venture transactions during thequarter saw Mitsubishi Corporation acquire a 25% interest inStillwater Mining's Marathon copper project for US$81M," KPMGnoted. "The transaction represents the first foray for the tradinghouse into platinum group metals." In its report, KPMG observed that Canada's lower mining M&Aprofile in the quarter "did not prevent global M&A activityfrom increasing markedly. Total Q1 transaction value reachedUS$90Bn-a 130% increase over levels recorded in the previousquarter, driven mainly by the proposed mega-merger between Glencoreand Xstrata." "More than 81 mining transactions were announced during Q1 2012,compared to fewer than 50 during the previous quarter, representingan increase of 75% in volume-a strong rise without theGlencore/Xstrata announcement," said KPMG.
"Switzerland was both the dominant acquirer and the dominanttarget, capturing a 60% share of both measures by virtue of thefact that both Glencore and Xstrata are domiciled in that country.China, Chile and India combined to form about 25% of both thetarget and acquirer shares, while Canada played a minor role asboth a buyer and a target." Meanwhile, in the shadow of the Glencore/Xstrata deal was anothersignificant transaction to create the world's seventh largestdiversified global miner, Sesa Goa's acquisition of SterliteIndustries to create Sesa Sterlite. Sesa Goa is India's largestiron ore producer while India's Sterlite is a significant producerof zinc, aluminum and copper. "Coal was once again a major driver of global M&A activity inthe quarter, with a total of 20 transactions announced," said KPMG.Xstrata continued its consolidation of Western Canadian coalassets. "Iron ore continues to have a major impact on the Australian miningM&A landscape," KPMG observed.
"A consortium consisting ofPOSCO, Marubeni and STX acquired a 30% interest in the Roy Hillproject in exchange for US$3.6Bn of equity funding to meet ongoingproject development costs." Roy Hill is an open-pit iron ore mine, rail and port facility underdevelopment in the Pilbara region of West Australia. Roy Hill isexpected to ship 55 million tonnes of iron ore annually to theglobal market. SUBSCRIBE to Mineweb.com's free daily newsletter now. I am Telecommunications writer, reports some information about sony car navigation , cardbus wireless adapter.
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