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PwC: Gold Equities Reached Breaking Point In 2012

Seniors are obviously flush with funds to make acquisitions, but PwC does not expect a flurry of deals. Twenty percent of senior miners pulled out cash for acquisition activities in 2012 and the same number reported plans to do so this year.

However, 33 percent of junior and mid-tier companies have acquisition spending in their plans for 2013. That's double the number this group spent on mergers and acquisitions in 2012, the PwC report states.

Only 20 percent of senior miners will look for additional financing this year, and most of them plan to turn to the equity markets.

By contrast, the smaller companies have more aggressive investment plans, with over 70 percent expressing that they will be on the prowl for financing. Over half of these junior and mid-sized companies will seek funding through debt. More than a third hope the equity markets will provide funding, while 11 percent hope to secure offtake agreements or streaming deals.

The damage that has already been done must be undone or compensated for before significant benefits can be enjoyed, states PwC's report. But change is reportedly already underway. And now, after the flood of headlines chastizing them, gold companies are starting to rally, the firm said.

 

Securities Disclosure: I, Michelle Smith, do not hold any equity interests in any companies mentioned in this article.

Related reading:

The Ins and Outs of Dividend-paying Mining Stocks

Resource Companies Reinvent Themselves for Tough Markets

PwC: Gold Equities Reached Breaking Point in 2012 from Gold Investing News

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