By Ben Kramer-Miller
Wall Street Cheat Sheet
As gold prices stabilize and ultimately move higher, I think we are going to see a lot of consolidation in the mining sector. Large gold mining companies are depleting their resources. At the same time, a lot of small companies have resources, but they don’t have the funding to bring their mines into production.
There are dozens, and perhaps hundreds of companies in this predicament, and while there are ways for these companies to find funding, many of them are going to see large companies come in with bids offering instant 30 percent – 70 percent premiums to their market valuations. The companies most likely to see these sorts of takeover bids are companies with low market capitalizations and large resources in geopolitically safe parts of the world.
One such company is Midas Gold. Midas Gold has a market capitalization of $122 million. It is currently in the process of developing its large Idaho gold mine, Golden Meadows.