2024 shaping up as another big year for gold deals
Gold miners have been active on the deal front again in 2024
There’s been a flurry of gold merger and acquisition activity so far in 2024, with more likely to come.
As the dust settled on the largest deal ever seen in the sector, Newmont Corporation’s late 2023 acquisition of Newcrest Mining, a new wave of gold consolidation was triggered.
Gold Fields CEO Mike Fraser recently highlighted the potential for more global consolidation.
“The gold mining sector, in fact, is massively fragmented, so I do think there's going to be times into the future where there is going to be more consolidation,” he said in an interview on the sidelines of the Diggers & Dealers Mining Forum earlier this month.
While Fraser gave nothing away at the time, only a week later Gold Fields emerged as a player in that consolidation.
North America
One of the biggest deals so far this year was also the most recent.
In mid-August, Gold Fields announced the acquisition of its Windfall joint venture partner Osisko Mining in a cash deal worth C$2.16 billion on a fully diluted basis.
The C$4.90 per share offer price represented a healthy 55% premium to Osisko’s 20-day volume-weighted average trading price.
In July, Alamos Gold acquired Argonaut Gold in a scrip deal worth US$276 million, bringing together the adjacent Island Gold and Magino mines in Ontario and creating a 600,000ozpa producer.
Argonaut’s other North American assets were spun out into Florida Canyon Gold, which then merged with Integra Resources Corp in a deal worth around C$95 million.
Contango ORE acquired HighGold Mining in a deal worth US$37 million to create a larger Alaska-focused company.
At the smaller end, McEwen Mining recently acquired junior Timberline Resources Corporation for US$18.8 million, while Orla Mining acquired Contact Gold Corp for US$8.1 million. Both deals were centred around projects in Nevada.
Australia
In early February, ASX 200 producer Silver Lake Resources announced a merger with emerging mid-tier miner Red 5.
The nil-premium merger of equals created a 445,000ozpa producer focused on Western Australia.
The deal closed in June and Red 5 announced this week the company would seek approval in the coming weeks to change its name to Vault Minerals.
Days after Ramelius Resources reported it had ended merger talks with Toronto-listed Karora Resources, Karora and Westgold Resources announced a combination to create a new WA-focused mid-tier miner.
The deal was formalised earlier this month and Westgold joined the TSX in addition to its ASX listing.
Emerging producer Brightstar Resources has been busy, acquiring unlisted producer Linden Gold and more recently, announcing the acquisition of Alto Metals.
Junior producer Horizon Minerals merged with explorer Greenstone Resources in June.
Africa
The deals keep flowing in Africa with a number of competitive bidding processes.
ASX-listed Perseus Mining acquired OreCorp, developer of the Nyanzaga asset in Tanzania, for A$276 million, trumping an earlier bid from Silvercorp.
Late last year, Osino Resources, owner of the 3Moz Twin Hills project in Namibia, agreed to a C$287 million takeover by Dundee Precious Metals, an offer that was later trumped by a C$368 million bid from China’s Yintai Gold.
In October 2023, new gold producer Tietto Minerals received an unsolicited takeover bid from Zhaojin Mining Industry Company, which the company branded as opportunistic.
In April, Zhaojin upped the offer by A10c to A68c per share, which failed to sway Tietto’s board. By the end of the month, the company changed its tune, and recommended shareholders accept the offer once Zhaojin reached a 42% interest, and the deal closed in June.
South America
In April, G Mining Ventures Corp and Reunion Gold Corporation announced a merger to accelerate development of the Oko West project in Guyana
The scrip deal, which closed in July, valued Reunion at C$875 million.
After missing out on OreCorp, Silvercorp had moved on within weeks and announced a combination with Adventus Mining Corporation.
The scrip deal, at a 31% premium, valued Adventus at C$200 million and gave Silvercorp a foothold in Ecuador.
We recently wrote about mining names from the past, many of which disappeared through M&A. Which companies out of this year’s presenter line-up will join that list?