With market volatility as a backdrop, analysts at Canaccord Adams have identified a number of potential takeover targets in the mining space as well as their possible buyers. Three names in particular stand out among the targets: Yamana Gold Inc., HudBay Minerals Inc., and Uranium One Inc.
Yamana has been a very aggressive buyer in the last few years, but analyst Steve Butler figures it is turning into an attractive target because of its production growth, discounted valuation, and outstanding El Penon asset. Yamana is trading at just 4.1 times estimated cash flow for 2009 compared to a sector average of 10.5 times, he noted. Possible buyers include Barrick Gold Corp., Kinross Gold Corp. and Newmont Mining Corp., all of which are big investors in the Americas.
HudBay has long been considered a target because of its huge cash position, and analyst Gary Lampard noted that the company's projects are robust enough to survive the economic downturn that has hit the base metals sector. He does not believe that HudBay's Manitoba assets are good enough to attract a major, but does think that Quadra Mining Ltd. could be interested.
The stunning collapse of Uranium One, which was one of the industry's biggest upstarts last year, has been well-documented. The stock is now dirt-cheap, and analyst Orest Wowkodaw wrote that the company's low-cost assets in Kazakhstan could be appealing for Cameco Corp., which is currently commissioning its Inkai project there.
The analysts also mentioned a number of other possible takeover targets in the mining space: Andina Minerals Inc., Detour Gold Corp., Premier Gold Mines Ltd., Canplats Resources Corp., Colossus Minerals Inc., Corriente Resources Inc., Hathor Exploration Ltd., MAG Silver Corp., Ur-Energy Inc., PhosCan Chemical Corp., and Potash One Inc.
