Evolution not chasing size – Klein
KALGOORLIE (miningweekly.com) – The executive chairperson of midtier gold miner Evolution Mining, Jake Klein, has told delegates at the last day of Diggers and Dealers that the company will be very selective when considering possible acquisitions.
“We operate in a very cyclical industry. Opportunities will present for those who are patient,” he said, noting that while the higher gold price environment could prompt other miners to buy, Evolution would not be solely driven by this factor.
“We are determined to be sufficiently patient to ensure we only enter into deals that make our business stronger and are accretive to our shareholders.”
Speaking on the sidelines of the conference, in Kalgoorlie, Klein noted that the merger and acquisition (M&A) frenzy which resulted from the last gold price gain in 2011, had resulted in impairments of some $85-billion.
“We have a tendency to do M&A when the price is rising, and if we really are in a cyclical industry, we should maybe be doing things when they aren’t popular, and when people are buying you should be selling, and when people are selling you should be buying.”
Klein said that an acquisition by Evolution Mining would likely be driven by a motivated seller, or a geological view that would ensure there were more ounces at the project than those being sold.
Klein was also dismissive around the possibility of a merger of equals, saying that the midtier space had historically generated the best interest for shareholders.
“And again, I would go back to the filters that we are using; does it make our business stronger and is it accretive for our shareholders. Just making the business bigger and potentially being dilutive to our shareholders, or being a potentially weaker business, doesn’t make any sense.”
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