TORONTO (miningweekly.com) – Directors and management at many junior companies will need to “check their egos” and look seriously at merging with rivals if they hope to weather the financial crisis and survive, Gryphon Partners managing partner Gordon Bogden said in Toronto on Monday.

“This 'our shares are more undervalued than your shares' attitude, will only serve to keep deals from happening,” he said at the annual Prospectors and Developers Association of Canada conference.

Tie-ups between junior mining and exploration firms enable companies to achieve much needed growth, pooling management talent and stronger balance sheet.

Mergers also help single asset firms to reduce risk, “and creates the critical mass necessary to attract new investors and increased analyst attention and capital”, Bogden said.

However, what he termed an “entrenched” attitude of management at many juniors is often the biggest deterrent to corporate activity, he commented.

Other opportunities for junior and small intermediate companies included acquiring nonstrategic or smaller assets shed by senior companies as part of their restructuring.

Still, this can be difficult, given that sellers tend to prefer cash for disposals, and most juniors do not have the cash to put up for acquisitions, Bogden said.

“However, we have seen that the equity market is receptive at the moment to providing acquisition financing, particularly for gold assets,” he added.

Going forward, companies, boards and management of all sizes will need to be more creative in finding financing solutions, he said.

“The easy deals are gone.

“It's now a strategic buyers market, rather than a financial buyers market,” Bogden commented.

“Rather than running after short-term cash, forward-looking boards and management teams will have to build long-term, value creating strategies.”