Gold bullion hit a record high in 2024 of more than US$2,800 an ounce. Gold bars are displayed during the 22nd edition of the international gold and jewellery exhibition at the Kuwait International Fairgrounds in Kuwait City on Dec. 11.YASSER AL-ZAYYAT/AFP/Getty Images
Buoyant gold prices and a dearth of new discoveries are expected to push up the level of mergers and acquisitions in the Canadian precious-metals sector in 2025, executives and analysts say.
Gold bullion hit a record high in 2024 of more than US$2,800 an ounce. This year, several notable deals were consummated, including Gold Fields Ltd.’s GFI-N $2.16-billion acquisition of Osisko Mining Inc., Orla Mining Ltd. OLA-T buying the Musselwhite gold mine in Ontario from Newmont Corp. NGT-T for up to US$850-million, and Agnico Eagle Mines Ltd. AEM-T scooping up O3 Mining Inc. for $204-million.
John Ing, gold analyst with Maison Placements, expects more deal-making in 2025.
“Reserves are declining and it remains cheaper for mines to replace those ounces on Bay Street than explore,” he wrote in a recent note to clients.
He singled out Lundin Gold Inc. LUG-T, Skeena Resources Ltd. SKE-T and Omai Gold Mines Corp. OMG-X as “potential players in this game of musical chairs, with few chairs left.”
A lack of definitive engineering work on gold discoveries is not dissuading some acquirers. Mr. Ing pointed out that G Mining Ventures Corp. GMIN-T bought Reunion Gold Corp. for $875-million, with no feasibility study conducted yet on its gold project in Guyana.
The universe of potential buyers in the gold sector is larger than in critical minerals. That’s because the precious metal isn’t subject to Ottawa’s crackdown in 2022 that stipulated the government would only approve acquisitions of Canadian critical-minerals companies by foreign buyers with ties to state-owned enterprises under exceptional circumstances.
To wit, China’s Yintai Gold Co. Ltd. (now called Shanjin International Gold Co. Ltd.) earlier this year bought Vancouver-based Osino Resources Corp. for $368-million. Sanjin’s controlling shareholder is Shandong Gold Mining Co. Ltd., a state-controlled Chinese company.
Anthony Moreau, chief executive officer of American Eagle Gold Ltd. AE-X, sees several mid-tier Canadian gold companies potentially getting acquired in 2025 by their larger-cap peers. With gold still trading at extremely high levels, acquirers stand to earn hefty cash flow right away, and companies with mines in stable jurisdictions are top of the list of attractive targets.
The buyers, he predicts, will be Barrick Gold Corp. ABX-T, Newmont Corp., Agnico Eagle Mines Ltd. and Kinross Gold Corp. K-T, with targets that could include New Gold Inc. NGD-T, Iamgold Corp. IMG-T, B2Gold Corp. BTO-T and Artemis Gold Inc. ARTG-X.
“Look no further than gold mines that have come online recently, or are coming on soon in safe jurisdictions,” Mr. Moreau said.
“If you want to make a $4-billion or $5-billion acquisition, it’s best made in a safe jurisdiction, where you’re not going to be worried about it being taken away from you.”
In recent years, several Canadian miners have clashed with overseas governments that have imperilled their operations. Barrick Gold’s future in Mali is in doubt amid a fiscal dispute with the military junta government. Several years ago, another Canadian miner, Toronto-based Centerra Gold Inc., saw its biggest gold mine nationalized after a dispute with Kyrgyzstan in Central Asia went off the rails.
While gold companies usually attract interest only from each other, copper companies are seeing investments from both their peers and gold companies, in large part because of copper’s status as a critical mineral.
Mr. Moreau’s company, American Eagle Gold, has attracted equity investments from Teck Resources Ltd., a critical minerals-focused miner, and more recently South32 Ltd., an Australia-based diversified mining company. American Eagle owns the NAK copper and gold exploration project in B.C.
A standout deal this year in the Canadian critical-minerals sector was Lundin Mining Corp. teaming up with BHP Group Ltd. BHP-N to buy Filo Corp. for $4.1-billion. Filo owns the Filo del Sol copper, gold and silver project, which straddles both Argentina and Chile.
John Ciampaglia, CEO of Sprott Asset Management, said that M&A in the copper sector in 2025 ironically could be driven by a relatively weak commodity price. After hitting more than US$5 a pound in May, copper has slid to around US$4 a pound.
“Copper mines can be $2-billion to $10-billion-plus to build,” Mr. Ciampaglia said. “The signalling we’re hearing from the major copper companies is, ‘Hey, until we get to US$5-plus-per-pound copper, we’re going to be very focused on buying versus building.’ ”
Copper has become a strategic focus for the world’s biggest iron-ore producers, such as BHP because it has done better over the past five years than their core commodity, and it is seen as instrumental in the lower-carbon energy economy because of its ubiquity in electrification.
“In the last cycle, gold companies always traded at premium valuations, and copper companies always traded at discounts, now you’ve got the reverse,” he said.
BHP attempted to buy rival miner Anglo American PLC this year in large part because of its exposure to copper. The industry is now waiting to see if it will try again in 2025.