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Governments around smashed and there is little
the world have launched competition,” Twigger said.
stimulus packages to coun- “We’ve got some M&A
ter the economic effects of mandates running now
the pandemic. It was a suc- with cashed up companies
cessful exercise post-GFC looking for deals. Lines of
but Twigger fears there credit are available and
is a lack of unity this time there is willingness. It is a
around. two-tiered structure cur-
“Following the GFC there rently with the producers
was a global effort – led by as the ‘haves’ and those
the US – to get the world’s in exploration or develop-
economy back on its feet,” ment, particularly those
he said. “During the coro- close to development, as
navirus crisis, it seems to the ‘have nots’.”
be every man for himself, Junior explorers are left
led by Donald Trump as witnessed in the “The gold sector is the only sector with with just a few options; hope for a white
reports – denied by the parties involved a liquid market,” he said. “You don’t need knight or go into cash preservation mode.
– that he had offered a German company a counterparty to sell gold, there is no The Association of Mining & Explora-
$US1 billion to buy exclusivity to the vac- restriction on the amount and volume of tion Companies (AMEC) has called on
cine it was working on. There is no co- sales. It is unique like that.” state governments to lessen the impact
ordinated response to this and that will Even in such dark times there are in- by placing a moratorium on tenements
suffocate the rebound.” vestors hunting bargains. The ASX has rents.
The West is looking anxiously at China seen several days of plus-4% rises in “Already some companies have in-
for both public health and economic in- March as the market struggles to makes formed me that without the ability to raise
dicators of what is to come. China is ex- sense of a simultaneous lockdown in funds they will struggle to carry employ-
pected to post a fall of more than 10% in Europe and the US and a loosening of ees and meet overheads through this
GDP figures. However, with restrictions restrictions in China. period,” AMEC chief executive Warren
being lifted, it appears the world’s sec- Wilson said the dramatic swings had Pearce said.
ond largest economy could be recover- investors alert for bargains. Pearce said the pandemic meant eq-
ing. Twigger has doubts whether the “Private equity is going nuts; there are uity markets would be shut to explorers
West can rebound quite so quickly. opportunities everywhere for those PE for at least six months.
“China’s shutdown was brutal and it groups with capacity,” he said. “There “As COVID19 weighs heavily on the
has the capacity to do that but we don’t will be interesting changes to the market. market, we are growing increasingly
have the capability to do that globally so The juniors who have cash will be eager concerned for the future of smaller min-
it becomes a co-existence model, which for M&A with cash and balance sheet eral exploration companies that need to
will suffocate the global economy,” he mergers.” raise funds to survive,” he said. “These
said. PCF Capital is already witnessing this companies are small businesses without
Argonaut Securities analyst James trend. Twigger said companies were al- a source of revenue, that live on capital
Wilson has followed gold equity markets ready engaging his group on corporate raised on the ASX and from private eq-
closely for years. He believes it is one of deals. uity to explore for opportunities.
the few parts of the market capable of “Now is the time to be buying assets. “This moratorium would allow compa-
outperforming in the current climate. Private equity and the banks have been nies to repurpose their expenditure to
sustain internal operations, retain their
employees, and help ride out the COVID
crisis.”
Even gold companies, so far the best
performers among resources stocks, ex-
pect the downturn to be lengthy.
“There will be a point where the gold
price is not a safe haven if we see coro-
navirus and the resultant locking up of
money,” Horizon Gold Ltd managing di-
rector Jon Price said. “People will just sit
on their hands and wait and watch and
that’s not a good thing for the small jun-
ior sector who continually need funds.
Hopefully people realise Australia needs
investment in the smaller end of town.”
One certainty is that the pandemic
and associated economic lockdown will
eventually pass but which companies
will be ready to take advantage? Twigger
and Wilson were both adamant miners,
Liam Twigger

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