Agoracom

While the number of initial public offerings in the mining sector has actually been higher so far this year compared to last, total proceeds have fallen "significantly lower," the global accounting firm said yesterday.

"The credit crunch has really hit the grassroots exploration phase of the IPO market hard, and so many are ripe for takeovers," said Tom Whelan, Ernst & Young's mining specialist. "We're anticipating many more mining mergers and acquisitions in the second half of this year."

While the appetite for exploration-stage IPOs has diminished, Mr. Whelan said he expects continued demand for mining companies at or near the production stage, citing the recent takeover of Skye Resources by zinc producer Hudbay Minerals Inc. as a recent case in point.

With senior companies doing little in the way of exploration, near-development juniors are attractive to majors seeking to replenish reserves, Mr. Whelan said. That should continue to spur takeovers, with 40% of the bigger players saying they will have to make acquisitions to meet expected growth expectations.

"At the end of the day, this is about supply and demand," Mr. Whelan said. "Booming economies like China and India have infrastructure demands that far exceed resource supplies, and the mining sector will need to work hard to meet those demands."

Through May of this year, there have been 43 IPOs in the Canadian market, compared with 36 last year. Yet while the IPOs of early 2007 delivered $360-million, or an average of $10-million per issue, this year's produced only $160-million, or an average of $3.7-million per issue.

"Typically, when you go to market you like to raise more money than that," Mr. Whelan said.

Yet continued strong metals demand from emerging markets and beaten-up share values for non-producing juniors will result in "a ton of transactions in the next little while," Mr. Whelan said.

"Junior companies are the new source of supply for those companies," he said. "I suspect right now there are lots of people doing due diligence and there are lots of transactions on the go, because so many buying opportunities exist."

The following was taken from Thurs Financial Post. It's not the bastion of all mining news by any stretch (I grant you that), but I think the acticle's main point is germain to our situation with DRV/MMG. The drivers of copper are India and China. Copper is in short supply these days. Nothing is for sure with Junior Mining stocks, and no one has ever gone broke taking profits, but I think it may be a tad premature to sell these stocks. I think the fall will be very interesting. FWIW.

Cheers