Yamana Gold Looking Like a Takeover Target - Dundee

Following the sale of three non-core assets earlier this month to Aura Minerals, Yamana Gold Inc. (AUY) is looking more and more like a takeover target, says Dundee Securities analyst Ron Stewart.

Mr. Stewart said:

With only 6 operating assets along with a minority stake in the [copper-gold] Alumbrera mine in Argentina, YRI would make a good fit for either Kinross Gold (KGC) or Newmont Mining (NEM).

Mr. Stewart said a hook-up with Kinross is an obvious one, given both companies have operating mines in Brazil and Chile.

It would lower Kinross' political risk profile considerably, improve liquidity and vault the company forward, lifting the pro-forma market cap to around $20 billion.

Newmont would also benefit from a takeover of Yamana. It would lower its political risk, provide needed growth and once again rival Barrick Gold Corp. (ABX) once again for top spot in the gold-producing sector, the analyst said.

Mr. Stewart maintained his "buy" rating and 12-month target price of C$13.50,

"On its own, the entry point into Yamana today looks attractive to us; as a possible takeover candidate, it is compelling," he wrote.

Comments

[RobbyRob:]

Interesting perspective. Would have thought that Yamana was looking for targets 6 months ago...the company has a nice niche and low production cost per oz. I am holding on for gains either way.

Jun 26 03:15 PM

[Robyn:]

I just bought AUY at 9.23 is that a good buy or not?

Jun 27 09:32 AM

[naidle:]

It's been in a trading range from $9.30-12.20 CDN which I found interesting. Then again so has most of the Gold mining sector.

Jun 27 01:51 PM

[Robyn:]

I'm new at this so I bought that and TASEKO MINES LTD. I hope something good happens. Thanks!

Jun 27 07:19 PM

[cameroni:]

Normally I would view asset sell-offs as a signal of underlying company weakness in a difficult market however the fundamentals going forward are good for gold miners and Yamana in particular now that it has recently been added to the FTSE gold miners index. These non-core sell-offs indicate to me that the company is restructuring and focusing on it's essential business. That would be in line with it's participation as an index member and some consolidations can be considered beneficial for the company and the price outlook. I don't see Yamana as a target now but think it is still a very good long term buy.

Jun 28 03:32 AM

[sarge 907:]

Bought AUY at $8.55 as a hedge. I'm with them for the long haul.
Compare financial statements. AUY is the stronger company and still a smart buy @ $11.00.

Jun 28 02:13 PM

[enviro111:]

Long term I would rather hold a focused AUY with some big time growth prospects than a huge watered down NEM with only decline ahead of it.

I would hope the management of AUY extracts years worth of appreciation if they sell out. why give up a company that could triple in the next five years just for a small takeover premium??

The problem is there are too many quick buck artists and not enough long term investors.

Jun 30 11:06 AM