Who's Next? Top Buyout Candidates In Our Portfolio

Five of maybe 20 possibilities

For the past few years, a question has been bugging the precious metals world: “How high will gold have to rise to ignite a miner takeover orgy?”

The answer was a long time coming, but it looks like $2,500/oz did the trick. Several high-profile buyouts have happened just lately, including Coeur buying SilverCrest (for $1.7 billion), First Majestic buying Gatos Silver ($970 million), and Gold Fields buying Osisko Mining ($1.6 billion).

A trend seems to be forming, which raises new questions, including: How frenzied will it get, and how many of our portfolio companies will be snapped up at nice premiums?

History provides some clues:

So far, the terms of recent deals have been inconsistent, with some way above pre-buyout share prices and some not. That’s par for the course in precious metals bull markets. Early on, when miner CEOs still remember the pain of overpriced acquisitions at past cyclical peaks, buyers are cautious. But as the metals keep rising, fear of missing out (FOMO) overwhelms caution, and acquisition prices rise to more exciting levels.

So…who’s next in the coming year? Our portfolio has plenty of small and medium-sized commodities players that will (or at least should) eventually be acquired. But in the coming year, the best-established juniors and explorers have the highest odds of attracting offers. Here are five possibilities: