- Calibre Mining announced this week that it would be acquiring Fiore Gold, a Nevada-focused gold producer for a 44% premium.
- While the premium appears quite high compared to other premiums sector-wide, the valuation looks quite reasonable, valuing Fiore at less than 0.70x P/NAV, which is fair for a small-scale producer.
- The combination should help to command a higher multiple for the combined company, given that both have growth and both have similar margins, but the deal insulates both, adding diversification.
- I see the deal as positive and see the continued trend towards consolidation in the sector as positive, but I am moving to Neutral on Calibre until the deal closes.
For further details see:
Calibre Mining Acquires Fiore: Digging Into The Recent Transaction