Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
Fitch Solutions’ BMI unit reports that strong M&A activity in the metals and mining sector, driven by the global energy transition, is expected to continue into this year, with industry players focusing on key minerals to align their portfolios with future demand. In the longer term, some key markets are at risk of supply shortages.
The report said the growing threat of supply shortages was encouraging miners to increase the proportion of key mineral projects in their portfolios. Fitch analysts noted that M&A activity in the mining sector has increased significantly in recent years, starting in 2020 and accelerating over the 2021-2022. The number of deals in 2023 remained relatively unchanged compared to 2022, but the amount of deals exceeded 2022 and is close to the highest level in the past decade, indicating that the value of individual deals in 2023 is higher than in 2022.
Most of the strong M&A activity in 2022 and 2023 was focused on key minerals, with copper accounting for 11 percent of deals last year. The biggest deals included BHP’s $6.4 billion acquisition of OZ Minerals in May 2023, bolstering the strength of its copper and nickel portfolio.
M&a activity in the mining and metals sector is expected to remain strong in both value and volume in the coming years as mining companies continue to seek new growth opportunities to develop new projects in a challenging environment, analysts noted.
In addition, the $10.6 billion merger between Livent and Allkem forms a new integrated lithium producer, Arcadium lithium, reinforcing the trend of industry consolidation in response to the growing demand for green metals.
With the exception of key minerals, M&A activity in the gold sector is expected to remain strong as industry players seek to reduce risk amid high costs and increase market share amid a favorable price environment.
Notable deals in the Gold sector in 2023 include Newmont’s acquisition of Australia’s Newcrest in November and Pan American Silver’s acquisition of Yamana Gold at the beginning of the year, BMI noted. Asia Pacific and North America will continue to see strong M&A activity this year as lower risk and abundant reserves attract investment.
In particular, analysts noted that Australia’s green metals sector is expected to see strong investment due to the country’s abundant reserves of key minerals and high level of government support for the mining industry.
This year, BHP plans to complete the divestment of its Blackwater and Daunia metallurgical coal operations in Queensland, while Teck Resources is expected to complete the sale of its steelmaking coal business.
