The big question about the biggest deal in gold mining history is — 'why?' GabeFriedz
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Both analysts questioned whether another miner, such as Barrick Gold Corp. or Agnico Eagle Mines Ltd., might join the chase for Newcrest and open a bidding war. Alas, neither company seems interested at the moment, adding to the perplexity of what Palmer is trying to achieve. Kim said the strategy had pushed many companies to overpay for asset acquisitions that subsequently left them debt-ridden. By his calculations, gold mining companies had recorded $85 billion in impairment charges between 2010 and 2017 — too high relative to the overall size of the companies in the sector, he said.
Boyd reckons “deconstruction” — in which companies paid down high debt levels — started around 2015. By that point, gold prices had fallen from a peak in 2011 above US$1,900 per ounce and settled into a range of between US$1,100 per ounce and US$1,400 per ounce where they remained until late 2019, according to data from theBut if the “deconstruction” was successful, it’s not clear that investors have yet forgiven gold mining companies for past mistakes.
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