BWR, the zinc miner, is hitting new highs. BWLRF has hit $2 today. I wonder who is looking to buy them out? I hope Lundin keeps its paws off. This is from Canaccord:
Breakwater Resources* (BWR : TSX : $2.19)
Net Change: 0.15, % Change: 7.35%, Volume: 15,250,211
The bigger they are, the better the bargain appears. We expect the feverish
pitch of M&A activity in the base metal sector to continue for the
foreseeable future, at least until equity prices more closely reflect the
cash flow power generation of the assets. Canaccord Adams Base Metal
Analyst Orest Wowkodaw anticipates the zinc market to remain extremely
tight until at least H2/07, with a strong possibility of an inventory
squeeze in the nearterm. For the year, we anticipate a modest deficit. In
2008, Wowkodaw anticipates a market surplus. However, if Chinese zinc
production slows, the market is likely to remain in deficit for longer.
Given Breakwater's significant near to medium-term zinc production growth
profile, growing net cash position, and very attractive relative valuation,
combined with the current industry theme of "bigger is better," we would
not be surprised to see a take-out bid emerge for the company, despite our
belief that Breakwater's asset base would likely dilute that of any buyer.
AI
