As the value of mining industry mergers and acquisitions falls from last year’s high, some investors see divergent trends moderating conditions.
They say share prices are reasonable or low for their assets while commodity prices have been high, the number of large deals has slowed while small deals remain constant, and miners are doing well but they need to replace their reserves. And some say the green metal push is good for deals even as it butts against economic nationalism, NIMBYism and higher taxes.
“The market for M&A is sort of moderate. It’s not extreme, it’s moderate, it’s not weak,” Ross Beaty, Canadian Mining Hall of Fame member and chairman of Equinox Gold (TSX: EQX; NYSE-AM: EQX), said by phone on the road in British Columbia. “It’s both a good world for mining and it’s a very tough world for mining.”
Global mining sector mergers and acquisitions fell to US$11.4 billion so far this year compared with US$27 billion in the same period in 2022, according to data compiled by CostMine Intelligence, part of The Northern Miner Group.
Deals this year include B2Gold’s (TSX: BTO; NYSE: BTG) US$902 million buyout of Sabina Gold & Silver (TSX: SBB; US-OTC: SGSVF), and Hudbay Minerals’ (TSX: HBM; NYSE: HBM) US$428 million purchase of Copper Mountain Mining (TSX: CMMC). But more than half the 36 deals were valued at less than US$15 million. The value total could be knocked higher by Glencore’s (LSE: GLEN) pursuit of Teck Resources (TSX: TECK.A, TECK.B; NYSE: TECK).
