Junior gold miners could be among the biggest beneficiaries of a coming wave of mining acquisitions, according to Canadian investor Michael Gentile, who believes their valuations have failed to keep pace with higher gold prices.
Speaking to Top of Mine, the Bastion Asset Management co-founder said some junior gold companies are valued at around $100 per ounce of gold in the ground, even though major producers could potentially justify paying as much as $500 per ounce for attractive assets.
Gentile, who has been aggressively increasing his exposure to junior miners, expects cash-rich producers to pursue more early-stage projects as the supply of acquisition-ready mines dwindles.
He is also taking more than 20 junior mining companies to London to attract longer-term investment capital.
But Gentile cautioned that a sharp decline in gold prices could shut down financing for weaker juniors, leaving shareholders exposed to significant dilution.
Watch the full interview on Top of Mine as Gentile explains his takeover thesis, where he sees value and the risks facing junior mining investors.
