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Streetwise Waterton sees ‘Midas’ touch in latest mine buy

Private equity buyer Waterton Global Resource Management Inc. is closing in on an acquisition of another gold mine in Nevada. The investment firm is planning to buy the property from Colorado-based gold and copper giant Newmont Mining Corp. The underground mine is called Midas, and it is already pumping out yellow metal.

AP

Private equity buyer Waterton Global Resource Management Inc. is closing in on an acquisition of another gold mine in Nevada.

The investment firm is planning to buy the property from Colorado-based gold and copper giant Newmont Mining Corp. The underground mine is called Midas, and it is already pumping out yellow metal.

Midas is also conveniently located just 20 km from the Hollister gold mine that Waterton bought in May.

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"The completion of our acquisition of Midas will add another high-quality gold mining operation to our portfolio," said Isser Elishis, chief investment officer of Waterton, in a statement.

Toronto-based Waterton must close the deal before mid-October when the letter of intent expires. Waterton plans to pursue other similar deals with other major mining companies in the future.

Private equity buyers have shown increasing interest in the mining sector, as higher costs and industry volatility made assets available at cheaper prices. And with a dearth of financing options available to many mining companies, resource companies offer a buyers market.

"Private equity likes to make big returns. And some are saying this is just too good to resist," said John Gravelle, the global mining leader for PricewaterhouseCoopers, in a recent interview.

When Waterton bought Hollister gold mine and Esmeralda Mill in the spring it beat out several other traditional mining companies, including runner-up Hecla Mining Co., the largest primary silver producer in the United States.

And investors have taken an interest. The firm recently raised $300-million for its second resource-focused fund.

Buyers are looking for properties that are in, or near, production, rather than gambling on development projects. Waterton is no different since it primarily targets late-stage sites in politically stable regions, through joint ventures or M&A.

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