“If they think that their listing will fail and they’re not going to get paid next year, they’ll do a transaction. If they think they can get paid, they won’t do a transaction,” he told a well-attended audience at the Vancouver Convention Centre.
Rule said the financing window for juniors was currently open and would serve to hinder M&A activity.
He expects much more robust deal activity among the mid-tiers since the market has shown that as companies get bigger, their trade liquidity increases, bringing other benefits. The share price also increases, and the cost of capital decreases, which, according to Rule, makes for a durable competitive advantage in a capital-intensive business.
Rule also suggests the mining industry has been kept on a short leash by the shareholders in terms of M&A, particularly the gold majors, “given all the incredibly stupid transactions that took place in the prior decade.”
“And I think…
