China Gold-Mine Deals at Record After Price Plunge: Commodities
Extract from article from Bloomberg
Demand Explodes
Chinese buyers are less constrained as demand at home explodes. With consumption having jumped to 4 metric tons a day, the nation is set to overtake India as the biggest consumer this half. Many producers in China have better cash flow than overseas competitors and lower production costs.
Zijin is forecast to have all-in costs, which include administration, capital spending and exploration, of $658 per ounce this year and Zhaojin $549 per ounce, compared with a global average of $831, brokerage UOB Kay Hian Ltd. said in a note to clients dated July 9.
Papillon Resources Ltd. (PIR), which has a project in Mali, may be a possible target for Chinese companies, according to RBS Morgans Ltd. Iamgold Corp. (IMG), with a $2.4 billion market value, Amara Mining Plc (AMA) and Perseus Mining Ltd. (PRU) also are possible targets, said David Brennan, an analyst in Melbourne at Ord Minnett Ltd.
“There are some good bargains out there, and things that are too good to pass up on,” said James Wilson, a Perth-based analyst at RBS Morgans Ltd. and a geologist who has worked in Australia, Africa and China.
