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South America looking like the new Australia

If 2010 was the year of Australia, 2011 could just be the year of South America.

For the past little while there has been what seemed like non-stop deals between Australian and Canadian firms. Examples include Canadian Pension Plan Investment Board's $3.2-billion purchase of Intoll, the $2-billion merger of Anatolia Minerals and Avoca Resource and, of course, BHP Billiton's failed bid for Potash Corp of Saskatchewan.

Surely there will still be lots of talks -- and deals -- between companies in these two countries, but South America is suddenly getting much more attention here. The latest deal there is a smaller one, with Gran Tierra Energy buying Petrolifera Petroleum for a total value of about $200-million, including debt, working capital and investments. The deal provides Gran Tierra with oil and gas assets in Colombia, Peru and Argentina.

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But other recent South American deals (whether they are South American companies or those with South American assets) include HudBay's $520-million bid for Norsemont, which has Peruvian copper assets, and Eike Batista's $1.2-billion bid for Ventana Gold through his company EBX Group. Ventana is particularly interesting because the Canadian firm has Colombian gold assets, and for the longest time Greystar was the only Colombian miner most people talked. Now all sorts of names and assets are being tossed around.

South America has been particularly hot for Scotia Waterous, which put together deals for big names like China's Sinopec. Last year, Sinopec did a $7.1-billion Brazilian transaction last year and a $2.45-billion Argentinean deal.

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About the Author
Reporter and Streetwise columnist

Tim Kiladze is a business reporter with The Globe and Mail. Before crossing over to journalism, he worked in equity capital markets at National Bank Financial and in fixed-income sales and trading at RBC Dominion Securities. Tim graduated from Columbia University's Graduate School of Journalism and also earned a Bachelor in Commerce in finance from McGill University. More

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