'It's a lot cheaper to buy projects' - Michael Gentile on why mining M&A will keep rolling

Miners are going to be pushed into more and more M&A, said Michael Gentile, co-founder of Bastion Asset Management. On Thursday, Gentile spoke to Kitco Mining. Gentile is a strategic advisor and director for several companies in the natural resource sector. The mining sector is on a roll. This year, gold has hit several all-time highs, and copper is up 17%. M&A has been on a tear, too. This year, there's been several big mining transactions: Osino Resources and Yintai in a $368 million deal, and Alamos Gold and Argonaut Gold announcing a $325 million deal. The headline M&A was this week when BHP Group made an unsolicited offer for Anglo American. The price could top $39 billion. Gentile said M&A is not stopping. "M&A will absolutely continue," said Gentile. "A bunch of things are driving it. First of all, the scarcity of projects that are shovel-ready and are...in quality jurisdictions are at a record low. It's been a dramatic under-investment in mining and development in the last 10 to 15 years. You've also seen projects that have been built, but most of them have gone wildly over budget, so the cost to build these projects are increasing by the month, by the year, so it's a lot cheaper to buy projects that are almost completely built." Gentile said the rationale for the Anglo American deal is low valuations. "In the case of BHP...it's a much cheaper bet, especially with how cheap the stocks are trading. You can buy producing assets...at maybe 30% to 40% of the cost of building one. That's why you're seeing all these shovel-ready projects...getting snapped off the board." 0:00 - Will M&A continue? 2:50 - Copper vs gold - what's your favorite play? 4:38 - Nickel's cautionary tale 7:11 - Lithium and nickel at compelling values 8:35 - Canadian pension funds not investing in resource sector 10:00 - Quebec resource sector highlights looking ahead 12:00 - Macro outlook and the effect on metals __________________________________________________________________ Kitco Mining is dedicated to reporting on the mining industry. Our mandate is to be the top resource for all mining information and news, offering a clear perspective on where the industry is going through breaking news coverage, mining trends, and in-depth reporting, presented with precious, rare earth, base metals, and industry stock prices. Get important precious and base metal updates while on the go with the Kitco Gold LIVE! app - https://applications.kitco.com Stay connected with us Twitter -   / kitcomining   Instagram -   / kitcomining   LinkedIn -   / kitco-mining   Facebook -   / kitcomining   Connect with the Kitco Mining anchors Michael McCrae -   / michaelmccrae   Paul Harris -   / paulharrisgold   For more in-depth mining coverage, visit us here - https://www.kitco.com/mining Disclaimer: Videos are not trading advice, and the views expressed may not reflect those of Kitco Metals Inc.