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Takeover talk in West Africa's gold sector picked up last week after industry giant Gold Fields Ltd. struck a deal to buy junior explorer Glencar Mining PLC for £28-million ($50-million).

In a note to clients, Clarus Securities noted that the deal is another indication that gold M&A activity is alive and well, particularly for advanced explorers and near-term producers. With that in mind, Clarus highlighted three advanced gold explorers in West Africa (all in Ghana) in its coverage universe that could be attractive targets as well. Each of them trades at an adjusted-market-cap-per-ounce multiple of less than $30.

Adamus Resources Ltd.: Has a current global resource of two million ounces, and its Southern Ashanti project is expected to go into production next year. It is rated a "speculative buy" with a target of 95¢ a share.

Perseus Mining Ltd.: The company's Ayanfuri project is expected to start production in July 2011, and Perseus could reach 326,000 ounces a year by 2013 when output begins from its Tengrela project in Ivory Coast. It is a "speculative buy" with a A$1.50-a-share target.

Keegan Resources Inc

(KGN): The company has a land package of 1,000 square kilometres on two major gold belts in Ghana, and Clarus wrote that it should be able to "rapidly grow" its resource base towards five million ounces over the next 12 months. Its flagship Esaase deposit still remains open along strike and depth as well. Keegan is also rated "speculative buy," with a target of $3.10 a share.

Source: Gold M&A Talk Turns to West Africa