M&A heats up as gold miners carve out a significant bottom

In a sector where investor confidence has been extremely low for the past several months, mining companies have begun to re-kindle efforts to explore alliances and partnerships to bring promising projects online and share the risk between parties.

Then in October, VanEck Associates Corp., the biggest Yamana investor and the third-largest shareholder in Gold Fields, announced it was critical of the transaction as well. The Globe and Mail reported Van Eck portfolio manager Joe Foster calling the deal"poorly structured" and said the market doesn't understand the strategy behind the agreement.

With mining space M&A deals typically coming in bunches, on Thursday morning the precious metal's royalty space announced a friendly merger as well. Canada's Triple Flag Precious Metals Corp and Maverix Metals Inc agreed to a friendly combination in which Triple Flag will acquire Maverix for cash and shares valued at US$3.92/sh, at 10% premium to Maverix's share price and valuing Maverix at US$606 million.

The GDX took the lead on Thursday, clearing initial overhead resistance at $27.50 to make a higher-high. A weekly close above $30 would suggest a bottom being completed. The GDXJ moved sharply towards initial overhead resistance at $35. A weekly close above this level would be a higher-high on its weekly chart, while a close above $37 would suggest a significant bottom being in place.

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