Major gold mining companies are set to extend a deal rally after sealing a record $30 billion worth of contracts this year, latest data show.
The deal spree marks the most valuable merger and acquisition binge since gold prices hit their highest peak almost 10 years ago.
Led by top producers Newmont Goldcorp Corp and Barrick Gold Corp, miners are bulking up to replace dwindling reserves and win back investors who, due to disappointing returns, have shunned the industry in recent years. According to information from Refinitiv Eikon, this year there were 348 transactions valued more than $30.5 billion, including net debt.
That figure is up from last year's $10.8 billion, exceeding a previous $25.7 billion set in 2010, the data show. Gold topped $1,900 per ounce in 2011 and is trading around $1,484 at the moment after hitting a six-year high in September.
Cautious stance The gold boom in 2011 prompted buyers to spend too much on acquisitions, leading to billions of impairments when prices collapsed in the years thereafter. This time, investors say they are more cautious about buyers.
The premiums associated with recent gold deals are well below those charged in the previous price bubble when the premiums were not rare at 40 percent to 50 percent.
In September, the gold investment group Paulson urged the smaller gold miners to seek zero-premium fusions to eliminate duplication and lower costs.
When it bought Africa's Randgold last year, Barrick paid no premium, while Newmont offered an 18 percent premium when it snapped Goldcorp to create the world's largest gold mining conglomerate.
More deals are likely among mid-tier miners, who are faced with pressure from activist investors to reduce costs and financial constraints, said Peter Grosskopf, chief executive officer of precious metals fund manager Sprott Inc.
Mergers galore
In a whirlwind of acquisitions this week, a $1.9 billion all-stock takeover offer for Africa-focused Centamin Plc was initiated by Canada's Endeavour Mining Corp.
A day ago, China's Zijin Mining Group Co Ltd signed an agreement to procure $1.3 billion in cash from Continental Gold Inc.
Kirkland Lake Gold Ltd. offered a buyout bid for Detour Gold for C$ 4.3 billion in November, while Saracen Mineral Holdings Ltd. took a major share at Barrick Gold in Australia's Super Pit gold mine.
"That pendulum has just begun to swing and it has much more to go," said Grosskopf, referring to more deals.
According to industry sources, among possible targets are Pretium Resources Inc, Pure Gold Mining Inc, Roxgold Inc, and Silvercrest Metals Inc.
Iamgold Inc, a Canadian producer, has also drawn attention from state-backed China Gold International Resources Corp Ltd.
Investment Industry Hall of Fame 2019 Inductee - Eric Sprott Eric Sprott explains what investors are getting wrong about Kirkland's all-stock Detour Gold deal 'The more I reflect on Detour, I think we’re ‘stealing value’ — value that the market’s not seeing,' Sprott told the Financial Post GABRIEL FRIEDMAN Updated: November 25, 2019
A Detour Gold mine in Cochrane, Ont. HANDOUT/TIMMINS DAILY PRESS FILES
Toronto-based Kirkland Lake Gold Ltd. on Monday announced a multibillion dollar acquisition of Detour Gold Corp., a deal that would elevate it into a major gold miner and could attract new institutional investors.
The combination marries two near opposites: Kirkland Lake operates two high grade underground mines at some of the lowest cash costs in the sector, whereas Detour operates a single, low grade bulk tonnage open pit mine at comparatively higher costs.
Newmont Ranked Top Miner in Newsweek's List of America's Most Responsible Companies NEM | 6 hours ago DENVER
Newmont (NYSE: NEM, TSX: NGT) (Newmont or the Company) was ranked the top mining company in Newsweek’s first-ever list of America’s Most Responsible Companies for 2020. Of the 300 businesses selected for inclusion in Newsweek’s index, Newmont placed 39th overall with a score of 79.6 out of 100.
“Robust financial performance and effective risk management require strong, transparent governance and the integration of sustainability into all aspects of our business,” said Tom Palmer, President and Chief Executive Officer. “Although we are honored by this recognition, we understand there is always opportunity for improvement, and we will continue driving our sustainability performance to higher levels.”
Newsweek partnered with global data research firm Statista Inc. to publish the ranking. Statista evaluated 2,000 public companies to identify America’s Most Responsible Companies based on publicly available key performance indicators (KPIs) derived from CSR Reports, Sustainability Reports, and Corporate Citizenship Reports as well as an independent survey. The KPIs focused on company performance in environmental, social, and corporate governance areas. The independent survey also asked 6,500 US Citizens about their perception of companies’ activities related to corporate social responsibility.
In September, Newmont was ranked as the top global gold mining company on the Dow Jones Sustainability World Index (DJSI World) for the fifth consecutive year and in January was included in Bloomberg’s Gender Equality Index.
More information on Newmont’s safety, economic, environmental and social performance can be found in the company's annual sustainability report, Beyond the Mine. The report is published as part of Newmont’s ongoing obligations as a founding member of the International Council on Mining and Metals and in accordance with the company’s commitments under the United Nations Global Compact and the Voluntary Principles on Security and Human Rights.
About Newmont
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. The Company’s world-class portfolio of assets, prospects and talent is anchored in favorable mining jurisdictions in North America, South America, Australia and Africa. Newmont is the only gold producer listed in the S&P 500 Index and is widely recognized for its principled environmental, social and governance practices. The Company is an industry leader in value creation, supported by robust safety standards, superior execution and technical proficiency. Newmont was founded in 1921 and has been publicly traded since 1925.
Newmont’s Peasquito Mine and Cedros Community in Mexico Agree to Water Pact DENVER--(BUSINESS WIRE)--
Newmont (NYSE: NEM, TSX: NGT) (Newmont or the Company) announced today that the Peasquito mine and the nearby San Juan de Cedros community (one of 25 neighboring communities) in Zacatecas, Mexico mutually agreed to an infrastructure solution securing sustainable water availability for the community’s domestic and agricultural uses.
The 30-year water agreement represents a significant milestone and an important step in the ongoing negotiations between the parties.
The agreement was developed and signed under the auspices of the ‘Dialogue Table’ sponsored by Mexico’s Federal Department of the Interior and representatives of the state government of Zacatecas.
News 
Market Data 
Discover 
