Issue link: http://resourceworld.uberflip.com/i/229125
"For the willing buyer there are now opportunities to extract favourable terms at extremely competitive prices." all; the company's Pascua-Lama Project accounting for $5.1 billion of that total. "Because they are still reconciling or writing down projects, it becomes hard for a senior to approach its shareholders or board of directors and say: 'Hey, we should buy ABC Gold because it's cheap, right beside us and it will help us stem the loss of production we've been suffering'," Kosowan said. Those who have bitten the write-down and impairment bullets are slowly starting to get back in the saddle and Kosowan highlighted generally positive Q3 results as illustrative of this. "That being said, the seniors remain timid and many continue to lick their wounds from the self-inflicted damage on their balance sheets," he added. "To an extent, that's why the seniors aren't 34 www.resourceworld.com RW December 2013.indd 34 jumping in and necessarily taking advantage of the lower prices." Still, for the willing buyer there are now opportunities to extract favourable terms at extremely competitive prices. "In many instances, we're seeing acquisitions made at cost and not accounting for some of the expenses, heartache or risk the company being acquired had to go through. Think about it this way: many acquisitions are now essentially free when it comes to exploration dollars," Kosowan said. Larger private equity funds are also circling and showing some increased interest for similar reasons. "They're out there kicking a lot of tires around the world," Mason said. "They have a lot of cash from wealthy people and are looking to buy companies and take them private. It's the perfect time if you believe in a commodity or the particular project, although I'm not sure if they'll be a huge number of miningdriven private equity deals. Still, it will be something to follow." Because of their nature, the available projects or buying opportunities are not often the glaringly-obvious ones in terms of grade and potential. In part, this stems from the inheritance of reduced investment in exploration over the past two decades. "There isn't the necessary volume of high-grade projects out there and it's a big problem," Kosowan said. "The low hanging fruit has already been picked." "Given this, even the better-looking projects out there must face stringent evaluation as to whether they make financial sense. Some may be down on their knees DECEMBER/JANUARY 2014 12/11/2013 6:12 PM