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More Mergers Needed to Improve Gold Space, Fidelity Investments
Sep. 15, 2014 12:05PM PST
Precious Metals Investing
Bloomberg reported that Joe Wickwire, who manages more than $1.8 billion of assets including the Fidelity Select Gold Portfolio, stated that more mergers in the gold space would help improve the industry overall. He said that combining companies could “help eliminate their respective unprofitable operations,” while stronger producers could pick up high-quality assets held by weaker companies.
Bloomberg reported that Joe Wickwire, who manages more than $1.8 billion of assets including the Fidelity Select Gold Portfolio, stated that more mergers in the gold space would help improve the industry overall. He said that combining companies could “help eliminate their respective unprofitable operations,” while stronger producers could pick up high-quality assets held by weaker companies.
As quoted in the publication:
There have already been some moves toward consolidation this year. Yamana Gold Inc. and Agnico Eagle Mines Ltd. bought Osisko Mining Corp. after beating out a hostile bid from Goldcorp Inc. Barrick Gold Corp. (ABX) and Newmont Mining Corp., the two largest producers by sales, also discussed a merger this year before breaking off talks in April.
Wickwire commented:
For long-term oriented investors it would be better for the industry to get more right-sized where companies are focused on generating profit at a conservative gold price assumption.
