With cash in hand and a goal of doubling gold output in the next five years, Japanese heavyweight Sumitomo is looking to acquire gold assets—and Viscount Mining Corp. could be a prime target. In this article for The Gold Report, Resource Maven Gwen Preston explores the Viscount proposition, including the historic potential of its Cherry Creek land package and its potential to produce Carlin-type gold.
Sumitomo is on the hunt.
Fresh off spending $1 billion to boost its stake in the massive Morenci copper mine in Arizona from 15% to 28%, Sumitomo President Yoshiaki Nakazato has turned his attention to gold.
Nakazato wants to double Sumitomo’s gold output by 2021. The major currently owns two gold mines—the Hishikari mine in Japan and the Pogo mine in Alaska—that together produce just under half a million ounces of gold annually. By buying existing mines and through exploration success, Nakazato wants to lift that to 1 million ounces.
The company has the cash to put this plan into action. The company closed out fiscal 2015 with $7.5 billion in the bank (its fiscal year end is March 31, almost a year ago), a marked contrast with the debt-burdened balance sheets of most North American mining majors.
Cash means Sumitomo can act now. And it likely will, in the knowledge that other miners will move to buy assets as soon as their balance sheets let them.
For the investor, it all suggests positioning in companies that are set up to be on the receiving end of a Sumitomo cheque.
It is impossible to know what the Japanese major will do, but it is possible to trace where its money is already going. And it turns out Sumitomo currently only has one joint venture with an exploration company.
That company is Viscount Mining Corp. (VML:TSX.V). Viscount’s flagship …read more