In its July 2011 Gold Sector Review released last month, London-based analysts Ambrian tipped Adamus to play a pivotal role in any future consolidation in the west African gold sector, stating it was now a hunter rather than prey due to its successful entry into the producer ranks.

Ambrian reiterated its view in a note released on Tuesday and commended Adamus’ management team for identifying Endeavour, as the merged entity will address a number of issues that may have been detracting from Adamus’ share price, including close-out of the debt and hedging facilities.

“We believe that closing the hedging facility will result in an immediate share price re-rating for Adamus,” Ambrian wrote.

The deal will give the new entity two producing gold mines and a development asset in west Africa.

Ambrian said Adamus would benefit from North American exposure, as well as increased size.

“Adamus has for some time been dual-listed on both the ASX and TSX, however 100% of trading has been on the ASX,” analysts said.

“Given the new combined entity will have approximately 50% of its register on both the ASX and TSX, it should provide better coverage for Adamus as it will now actively trade on the TSX.

“Also, as the market cap will be in excess of $US500 million, the market awareness of the company will now increase as it will be of a size that attracts a larger number of investors that may have had restrictions on investing in smaller companies.”

Ambrian analyst Adam Kiley gave Adamus a buy rating with a target price of $A1 per share, without factoring in the merger.

Analysts from UBS and Clarus Securities also rated the merger as a positive, maintaining a buy rating for Adamus.

Meanwhile, Ambrian has flagged consolidation within the west African gold sector, with Adamus to continue to play a role after the Endeavour deal is complete.

“We believe that this is just the first of a number of M&A within the west African gold sector over the next 18 months,” Ambrian wrote.

“We also believe that once the transaction is completed, the new management team will immediately look to make its next move as it looks to get its production profile to at least 500,000 ounces of gold per annum as soon as possible.”

Ambrian also pointed to Azumah Resources’ recent acquisition of a 15.3% stake in its Ghana neighbour Castle Minerals as another example of consolidation.

Goldman Sachs has also forecast a period of consolidation in the region, picking Teranga Gold Corporation and Perseus Mining as potential targets.

Meanwhile, last month BGF Equities named new producer Perseus as a top pick, saying it was the “greatest example of success of in west Africa”

Other Australian Securities Exchange-listed companies in the west African gold sector include Resolute Mining, Gryphon Minerals, Ampella Mining and Noble Mineral Resources.