On the surface, all the typical omens of a bull rally in metals seem present: a drop in the dollar index, disappointing economic and jobs data in the US, and the escalating geopolitical tensions in key locations like Iran and Venezuela – which have pushed investors towards safe haven assets and pushed the price of gold up. The trend is likely to bolster further consolidation in the mining sector, analysts claim. But one notable M&A transaction has shaken up the industry, raising important questions about the long-term effects and consequences of that consolidation – as well as the extent to which assets like gold remain save havens, explains Angelos Damaskos, manager at Junior Gold Fund.
As Brazil braces for another tailing dam collapse, Miners & Investors talked with Peruvian majors’ CFOs and their investors about the industry’s challenges and opportunities for the year ahead. Majors demonstrated healthy financing positions with low expansion pipelines; juniors, on the other hand, continued to explore alternative financing in a dry equity market. All made mention of social issues and a laborious permitting process.
Latin American borrowers continue to see strong demand from lenders and investors following a hectic year of elections in many of the region’s largest economies. We speak with Mauricio Voorduin, Managing Director, Latin America Regional Head; David Costa, Managing Director, Head of Latin America Finance; Sara Pirzada, Managing Director, Loan Syndications; and Mark Tuttle, Managing Director, DCM at Mizuho Securities, a regional funding leader, about some of the key trends prevalent in the region’s markets throughout the first quarter of this year, and why it’s never been a better time of borrowers to move into the dollar markets.
The funding for the project, Lundin Gold’s sole venture in the country and its key source of revenue there, featured a one-of-a-kind structural solution that required extensive collaboration and negotiation between the financing parties and the sponsor.
The first half of 2018 has seen a record-breaking volume of corporate consolidation across the globe, and Latin America has become a prominent setting for such activity. The latest slowdown in M&A activity is thought to be stemming from the peak of elections-related volatility, from Mexico to Brazil, and most expect business to continue as usual once the dust settles.
As a region often faced with political and currency volatility – this year more than others in recent time, perhaps – Latin America has seen impressive growth in the volume and range of investment opportunities across the region’s infrastructure landscape.
Latin American miner Nexa Resources – which recently rebranded from Votorantim Metais – has in the past year completed its dual stock exchange listing, weathered a period of low commodity prices and mining sector strikes in Latin America, and maintained strong fundamentals to step confidently into the new financial year. We speak with Mario Bertoncini, the company’s Senior VP and CFO, about its prospects in 2018.
Alessandro Bitelli, Executive Vice President & Chief Financial Officer at Lundin Gold, a Canadian gold miner, talks about the company’s Latin American ventures, a USD300mn deal to finance a project in Ecuador, a further loan syndication and a USD400mn equity transaction, as well as broader market outlook and the impact of politics.
In advance of our Project, ECA and Structured Finance Middle East & Africa 2018 conference and forthcoming special report on the subject, Bonds & Loans visited the region to meet with a broad range of finance leaders in order to gain a sense of the risks and opportunities on the horizon.
The issuers, borrowers and mediators of the most innovative and outstanding debt capital market deals on the continent to be lauded at the prestigious awards ceremony. Winners: Latin America Deals of the Year Awards 2018
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