Following the sale of three non-core assets earlier this month to Aura Minerals, Yamana Gold Inc. is looking more and more like a takeover target, says Dundee Securities analyst Ron Stewart.
“With only 6 operating assets along with a minority stake in the [copper-gold] Alumbrera mine in Argentina, YRI would make a good fit for either Kinross Gold or Newmont Mining,” Mr. Stewart said.
Mr. Stewart said a hook-up with Kinross is an obvious one, given both companies have operating mines in Brazil and Chile.
“It would lower Kinross’ political risk profile considerably, improve liquidity and vault the company forward, lifting the pro-forma market cap to around $20 billion,”
Newmont would also benefit from a takeover of Yamana. It would lower its political risk, provide needed growth and once again rival Barrick Gold Corp. once again for top spot in the gold-producing sector, the analyst said.
Mr. Stewart maintained his “buy” rating and 12-month target price of $13.50,
“On its own, the entry point into Yamana today looks attractive to us; as a possible takeover candidate, it is compelling,” he wrote. David Pett of FP Trading Desk
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