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Africa is a really significant place for new business

         Date: 2012-03-07

           Tag: Africa, Africa new business

Summary: "Africa's become ... a really significant place for new business, like the new frontier," said Peter Leon.

With gold prices steady above $1,650 an ounce and a growing number of juniors producing in Africa, it is increasingly likely that those discussions might be about acquisitions in places like Burkina Faso or Ivory Coast.

"Africa's become ... a really significant place for new business, like the new frontier," said Peter Leon, head of the Africa mining and projects practice at Webber Wentzel, a Johannesburg law firm.

In a report released just before this week's PDAC conference in Toronto - the world's largest mining gathering - PriceWaterhouseCoopers said it expects the continent to emerge as one of the most important mining M&A geographies of 2012 with "substantial" acquisition volumes.

"Unparalleled resource potential and an increasingly investor-friendly climate are two of the drivers of this view," PwC global mining leader Tim Goldsmith said in the report, which calls for record global mining M&A volumes in 2012.

The traditional pattern of mining M&A - larger players buying up small miners and explorers to replace their own depleted mines - fits well with the African mining landscape, analysts say.

Some liken it to an earlier-stage Latin America, where larger miners such as Barrick Gold and Goldcorp have since scooped up several small players or projects.

In Africa, by contrast, small developers still rule the landscape, leaving plenty of space for takeovers by larger players or among smaller miners looking to gain heft.

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