With the commodity cycle slowly turning, gold miners are entering a structural bull market and are searching for acquisitions. Careful capital allocation is critical so that they don't end up overpaying for poor assets or pouring more capital into assets yielding low or no returns. During the last bull market, gold miners and other commodity producers did hefty deals, and when the market turned they found themselves in a corner. They have spent the last three years trying to cut debt. Now with the gold price up 21% to $1303/oz for the year to date some gold companies are itching to be among the world's top listed gold miners and are diving into investment opportunities. Others are being more cautious. So how should companies invest while seeking the best returns for investors? Hanré Rossouw, head of resources at Investec, said the secret to gold- mining success was diversifying investments. Companies with exposure to one country faced a lot more risk compared to those with operation...
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