JOHANNESBURG (miningweekly.com) – Merger and acquisition (M&A) activity was expected to pick up over the next few weeks as cash-hungry developments force management teams to take on partners to progress projects, market analysts from SP Angel said this week.

The analysts said in a note to shareholders that cash-rich miners would likely take advantage of the low valuations of their less fortunate peers and that the “harsh reality” of running cash hungry projects would progress sector consolidation.

This comes as several acquisition deals emerged this week, including TSX- and LSE-listed Centamin’s bid for junior explorer Ampella Mining, East African gold exploration and development company Nyota Minerals’ sale of 75% of subsidiary Nyota Minerals Ethiopia to exploration company Kefi Minerals, Tri-Star’s acquisition of Portage Minerals and Aim-listed Stratex International’s partial buy-out of Tembo Gold.

Centamin on Tuesday made an offmarket bid to acquire 100% of ASX-listed Ampella Mining, offering shareholders one new Centamin share for every five Ampella shares held.

This equated to A$40.9-million, or A$0.16 a share, representing a 113% premium to Ampella's last closing price of A$0.075 and a 77% premium to the 20-day volume-weighted average price on the ASX, both as at December 6.

Centamin’s acquisition of Ampella, which was facing tough decisions in a tough Australian market, was welcomed, as the deal ensured investors’ participation in the deal, with the assurance of Centamin’s cash and technical resources adding value.

Nyota Minerals on Wednesday announced its intention to sell a 75% stake in its Ethiopian subsidiary for £1-million in cash and the issue of up to 116.67-million ordinary shares in Kefi, at an agreed price of 3p a share.

The subsidiary owns 100% of the Tulu Kapi gold project and its proximal exploration licences, and the sale was in line with Nyota’s stated strategy of identifying a partner for the development of the gold project.

Nyota would retain a 25% stake in Tulu Kapi and the proximal exploration licences, as well as a 100% stake in the Northern Block exploration properties.

Further, earlier this month, Stratex announced that its wholly owned subsidiary Stratex Gold had been issued 17.5-million, or 13.2%, of the common shares in Tembo Gold in return for a subscription of C$1.75-million, marking Stratex’s contribution to a C$5.95-million co-investment with the New Africa Mining Fund II, which contributed C$2.5-million, and Concept Capital Management, which contributed C$1-million, together with other investors, in Tembo Gold.

Stratex’s holding could increase to 23.4% on the exercise of matching warrants for one common share in Tembo, at a price of C$0.12 a share.

In August, Tri-Star Canada and Portage agreed to effect the acquisition by combining their businesses, assets and liabilities and continuing with the name Tri-Star Antimony Canada as a wholly owned subsidiary of Tri-Star Resources.

Tri-Star issued about one-billion new Tri-Star shares, at 0.005p apiece or £2.8-million, to Portage shareholders and an aggregate of 34-million Tri-Star shares to creditors of Portage, collectively representing about 16.37% of the issued share capital of Tri-Star Resources.

“We reckon investors should look at cash strapped explorers with good-quality mineral resources. The gold miners are generally the most oversold and, barring further falls in gold prices, should be well placed for further consolidation,” SP Angel concluded.