Surf’s up! CAML CEO sees junior resource M&A wave coming
Friday, August 23, 2013 - 04:05
Aug. 23 - Central Asia Metals CEO Nick Clarke says takeover action is on the horizon for the junior resource sector because they are finding it hard to raise funds.
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Big cap basic resource producers have been struggling against -- up prices and -- top level -- -- what -- -- smaller rivals. Make up she -- -- a central Asian missiles joins me now thanks so much out of being here with us. What seemed like given that the bigger plane as a struggling with all these headwinds. We'll centrally chemicals and what will we operate a small cup of producing facility in Kazakhstan. We listed in late 2010. Raising sixty million dollars. Since that time we've built a project we produce -- and we started paying a dividend. So we've done fairly well in you know pull -- it over the last few years and we hit two window of opportunity but he he's been real struggle for a lot of the small. Contemporaries and friends of mine who in the -- sector. Now I know -- shares are up and as you say you're paying dividend which is he -- rare in the aim listed. Mining -- producing space. What are you doing going for it to shield yourself from five. A weakening of prices because obviously that we twelve go way production is going to come on lines you know what she tainted made sure you keep unprofitable. What we're learning a small producer we produce about 101000 tons of about cathode copper. And of course we don't affect the overall price -- price of culpa but what we can do is control our own internal costs. Our cost cash cost of operation is -- 98 cents a pound and today compass setting internationally for about three dollars that -- pound. So what I can do is control my own internal costs and ensure that might cost base is well below any level -- the act. Couple may get to mean you know bad in a bad period. And other operations what are the biggest challenges do you think that's facing being listed that uses today. Well obviously access to money. Equity is still very difficult to come by the investment community the fund managers seem to be wary of the resource sector that's been so much bad news coming coming out and there's a lot of taxes not of -- But I think that isn't really being borne out by the actual events of come commodity prices. -- length I can see the green shoots I hate that to use September they seem to be a change in sentiment somewhat. Towards I think the second half of these years some more -- funds coming back in the mining sector. Now has been an Anderson reports about the oil minus. Them mine in but for the oil sex. And this report says that there was -- losses on. Buzz in on the -- to about potential emanate coming in emanate to the team because. The weaker ones are finding it really haunts him to actually raise cash. You mentioned this and you'll -- any arms do you think that the small -- cap mining states that could see -- a today's T quite soon because of this. I do. I think the news. The lack of funds coming into the junior results sect that has resulted in many projects many companies having good projects but. Do not have the ability to raise the money to take those projects forward debt is very difficult. Even if you can get debt how do you raise the equity. -- stock prices means too much dilution for existing shareholders so companies that court. They can't raise the debt -- raising equity so I can see those companies who have some cash. Joining up with those who -- cash starved. To enable some of the good projects to go forward. And just to finish up 10 lead to describe the sex and 2014. It's going to be exciting I don't think -- -- that have been coming out of China the unease I think this sector is gonna turn from glass half empty glass half full. For an affidavit and my thanks to nick -- chief executive of Central -- metals on managing all. This is what is.
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