Given the well-documented collapse of the junior mining sector in the past 15 months, a step-up in merger and acquisition activity is considered inevitable by many industry insiders.

In their "Junior Mining Weekly" report, analysts from Canaccord Adams reiterated their belief that in the long-term, small-cap miners will not trade at a discount to their cash, with their projects treated as liabilities. But since that is often the case right now, "There are excellent opportunities [for M&A] in this current negative environment for those companies bold enough to act."

They expect that M&A will be driven by major companies who are rich with cash and will look to engage in option deals or outright takeovers of the "best of the best" in the junior sector. After all, the companies that the majors were interested in six months ago are now valued at less than half the price.

The analysts wrote that M&A activity will likely drive some "renewed speculative appeal" in small-cap mining companies. The also provided a list of the best targets. Here it is:

Anatolia Minerals Development Ltd.; Andina Minerals Inc.; Aquiline Resources Inc.; Aurora Energy Resources Inc.; Bear Creek Mining Corp.; Candente Resources Corp.; Canplats Resources Corp.; CGA Mining Ltd.; Colossus Minerals Inc.; Comaplex Minerals Corp.; Corriente Resources Inc.; Detour Gold Corp.; Donner Metals Ltd.; GlobeStar Mining Corp.; Gold Reserve Inc.; Grayd Resource Corp.; Hathor Exploration Ltd.; International Tower Hill Mines Ltd.; MAG Silver Corp.; Minera Andes Inc.; Orezone Resources Inc.; Osisko Mining Corp.; Rainy River Resources Ltd.; Rubicon Minerals Corp.; Tournigan Energy Ltd.; Ur-Energy Inc; VMS Ventures Inc.

Peter Koven