DPM's acquisition of Osino Resources is expected to add Osino's high-quality, long-life Twin Hills open pit gold project, as well as an extensive exploration portfolio in Namibia to DPM's existing portfolio of assets. The total purchase price is roughly $287M, funded through a mix of equity and cash. We think the deal will add value to the company as it's acquisition is in a mining-friendly jurisdiction.
DPM is a smaller company ($1.5B market cap), but its fundamentals are quite strong. It pays a dividend yield of 1.9%, and has a 4.5% buyback yield, for a shareholder yield of 6.4%. Its sales and earnings have grown nicely over the past several years, it has almost no debt, generates a good free cash flow yield of 11%, and has a strong balance sheet. If the price of gold continues to move higher, we feel that DPM is a fundamentally strong miner in the space, and can perform well in the coming years. We would be comfortable with DPM as a longer-term hold.