Two heartening signs of a buyers market in natural resources include Lundin Mining’s purchase of Candelaria for nearly $2 billion, and Glencore’s posturing for super major Rio Tinto.
Lundin and Glencore are entrepreneurial miners with large insider ownership.
In the case of Lundin, you have the Lundin Family Trust ponying up for $100 million in the Candelaria related financing, which will more than double the mid-tier’s 2013 copper output.
The Lundin’s have a track record of knowing what projects to buy, and when to sell them. Take Red Back Mining for example, which they sold to Kinross for $7.1 billion in 2010, at the height of the resources bull market (note Kinross’s market cap is just $4.1 billion today, how things have changed)
At Glencore, CEO Ivan Glasenberg, with roughly $6 billion worth of Glencore stock personally, wants to use his paper to gobble up the world’s second largest miner during the worst commodities environment in decades.
Both Lundin, and I am referring to family investment manager Lukas Lundin, and Glasenberg appear to be working overtime to grow their enterprises, and they have the time horizons (5+ years) to stomach another bad couple of years.
I am not smart enough to predict a bottom, but I do want to be on the same side of the trade as Lundin and Glasenberg.
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