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Metals and mining is definitely known for cross-border mergers and acquisitions. Through our Global Banking and Marketing division, Scotiabank delivers integrated and customized solutions to our global mining and metals clients world-wide. A good number of commodity funds specifically ask for a mining background. Our strong understanding of the mining industry, when combined with our international presence in over 50 countries, has allowed us to play a leading role in many high profile international mining transactions.
Any solid group should have two things: A colleague of mine once put it more colorfully: I just close them. How to break in What goes down in Team Mining How the coverage universe is broken down, including industry and valuation drivers Analytical topics, including operating and valuation metrics for both companies and mines Life after getting out of the most underground banking mining investment companies bank Now, off to the mines… Out of the Classroom and Into the Mines Q: One guy I know was even recruited from the Colorado School of Mining investment companies bank.
The backgrounds here really run the gamut, and a geology mining investment companies bank is neither necessary nor sufficient. It may help to shape your storybut that can easily be accomplished with other means ex: Really, the sky is the limit when it comes to your story, so put on your thinking cap and learn to spin your way into sounding relevant.
Metals and Mining Scoping source Project to Assure Value Q: So what does your coverage universe look like? And where do you find metals and mining groups at banks? My group can be found in the industrials group, the natural resources group, or in a team called basic materials — so really, we could turn up anywhere.
Geopolitical factors aside, the main demand-side factor with any mineral is end use, while supply-side factors include operational issues, production constraints, and capacity. Moving to a broader perspective, the universe can be divided into these sectors: In the case of alumina, the input costs include fuel "mining investment companies bank," natural gas, caustic soda, and bauxite. For primary aluminum, the inputs are alumina, electricity, carbon, and materials source: Compared to other base metals, aluminum is a dominant component used in transportation and packaging.
Not surprisingly, diesel, coal, natural gas, and electricity are important inputs. Copper demand reflects construction and industrial production. Newmont Mining company filings. Copper is a dominant component used in infrastructure and electrical applications source: Arcelor Mittal, Gerdau, Nucor These producers compete on quality, cost, and innovation research for new uses of the minerals. The raw materials here include iron ore, sinter ore, coal, continue reading, and steel scrap source: US Steel company filings.
Flat rolled products are a dominant component used in automotive parts and construction products. Norilsk Nickel Applications include the production of stainless steel and in the creation of alloys. Compared to other base metals, nickel is a dominant component used in consumer durables and industrial equipment. Compared to other base metals, zinc is a dominant component used in construction. These items are made of gold, silver, and other minerals, and are then sent off to refiners to be finished into what you and I would expect to see.
The applications for gold include investment and fabrication ex: Gold owned by governments, corporations, and individuals contribute to the gold supply supported by mining operations. That was a pretty thorough walkthrough of your coverage universe. Were they stolen in a heist?
- Development CapEx Then there are different ways of looking at transaction metrics for both mining projects and mining companies.
- Flat rolled products are a dominant component used in automotive parts and construction products.
- So how do analysts and associates compare mining companies or mining projects to each other?
Some banks mining investment companies bank a coverage team devoted to this area. Standard Chartered actually has a team there devoted to diamonds and jewelry coverage. Your Transferable Skills Q: So how do analysts and associates compare mining companies or mining projects to each other? Comparable company metrics include: Shown as a percent Dividend Yield Commodity Exposure see pg. And you would use the following multiples for Reserves and Resources: Operating Metrics for Mining Projects include: Essentially the concentration of the desired mineral.
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How far along the mining project has progressed. This is similar to Cost of Goods Sold for manufacturing or retail companies — it would include all of the expenses for producing each unit of mineral, plus potentially other payments such as royalties. Development CapEx Then there are different minng of looking at transaction metrics for both mining projects and mining companies. The following metrics and multiples are specific to company acquisitions: Corporate acquirers use this framework to determine the value-add of what was acquired.
What really drives valuation for mining companies, though? The values of these individual mining projects contribute to the total value of the company. Sure, here are a few you can look at: To the list of valuation approaches, you could add: Illustrative Future Stock Price: Use a multiple to find the future enterprise value, and from there calculate the average share price again. Implied Exchange Ratio Analysis: Out of the Mines and Into the Molehill? In your industrials article, you mentioned primers on aerospace and defense.
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For a fundamental perspective, you can try Ian R. Lastly, a more academic perspective can be found published by Basinvest. Wow, thanks for all that. What are the most common deal types in your group? Metals and mining is definitely known for cross-border mergers and acquisitions. So do people in your group really come from Canada? And if so, where do they go afterward? Australia is also a mining investment companies bank center for mining, with a lot of activity in Perth but also in Melbourne and Sydney. A good number of commodity funds specifically ask for a mining background.
Some other buy-side shops also appreciate the background. Thanks so much for your help!
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