Paulson's gold investor group urges deals, costs purge

Jaguar Mining

12/09/2019 16:14

By Jeff Lewis
    Sept 12 (Reuters) - Gold bull John Paulson's investor
coalition on Thursday urged the world's largest gold miners to
immediately cut what it called excessive governance and
administrative (G&A) costs and said smaller rivals should pursue
no-premium mergers to boost shareholder returns.
    Concerns over global growth and trade uncertainties have
pushed gold prices to multi-year highs, stoking expectations of
deals among miners and reviving anxieties over cost control.
This month, gold  XAU=  climbed to its highest level since 2013
hitting $1,503.04 per ounce Thursday.  urn:newsml:reuters.com:*:nL3N26328Q 
    Major miners including Polymetal  POLYP.L , Kinross Gold
Corp  K.TO  and Newmont Goldcorp Corp  NEM.N  spend nearly two
times more on G&A than non-gold producing rivals, Paulson's
Shareholders Gold Council said in a report.
    Among mid-tier producers, Golden Star Resources  GSC.TO ,
Jaguar Mining  JAG.TO , Petropavlovsk  POG.L , Dundee Precious
Metals  DPM.TO  and Eldorado Gold Corp  ELD.TO  have the highest
spending levels.
    The investor group urged the smaller gold miners to seek
nil-premium mergers to eliminate duplication and lower costs.
    "If the gold producers brought down their G&A levels closer
to other mining peers, then $13 billion of value could be
unlocked for shareholders," the report said. 
    The coalition was launched last fall by Paulson's U.S. hedge
fund Paulson & Co. It includes Adrian Day Asset Management,
Apogee Global Advisors, AMG Fondsverwaltung AG, Delbrook
Capital, Equinox Partners LP, Equity Management Associates, John
Hathaway, Kopernik Global Investors, Livermore Partners, La
Mancha and Sun Valley Gold.

 (Reporting by Jeff Lewis; editing by David Evans)
 ((Jeff.Lewis@thomsonreuters.com;))