Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

McEwen Mining targeting acquisition spree to get S&P listing

Nov. 8, 2017

McEwen Mining is on a buying spree as the Canadian gold company aims to grow its market capitalisation by more than five times to achieve its ambition of a listing on the S&P 500, chief owner Rob McEwen said on Tuesday.

The Toronto company is seeking to buy several assets, ideally distressed companies or mines whose owners are in financial difficulties, to help raise its market capitalisation to $5 billion from under $1 billion now.

In May this year, Canadian resources magnate McEwen said he was giving himself two-to-three years to make his company only the second gold mining company in the S&P 500.

On Tuesday, in Zurich, where he was meeting investors, he stretched the deadline to four years.

"We have to do some further M&A and have some further exploration success," he said.

"I always favour distressed assets – they are a little more work, the market has to be a bit more patient, but that's where you get your best value."

In August, McEwen bought the Black Fox mining complex in Timmins, Canada, for $35 million from Primero Mining Corp, which had invested more than $500 million, but sold it to reduce its debts.

The site will produce 50,000 ounces of gold this year, and roughly the same next year, McEwen said.

The company expects to increase its own annual gold production from 146,000 equivalent ounces in 2016 to 223,000 by 2020 from its four mines.

"It is conceivable that we can get to 300,000 ounces organically, but we have to more than double that to get to the market cap we need," McEwen said.

Most of the company's acquisition drive would be in the Americas, although he would also look at Europe, with the company spending up to $200 million for the right assets.

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