Soaring Prices Spur Global Gold Industry Asset Mergers and Acquisitions

According to Mining.com, data from S&P Global shows that gold once again became the largest ore in global mining M&A in 2024, accounting for 70% of total M&A cases and value. S&P tracking data reveals that in 2024, there were 43 gold M&A cases globally, compared to 19 for base metals. The gold M&A value reached $19.31 billion, nearly three times that of base metals at $7.23 billion. Although the total M&A value of $26.54 billion was similar to last year's $26.36 billion, the number of gold M&A cases increased from 47 to 62, a 32% rise. In 2024, escalating geopolitical risks and multiple record highs in gold prices, which rose by 27% by year-end, made gold one of the most attractive metals for investment. Gold M&A primarily involved production-stage assets, mostly located in Australia and Canada, two countries rich in gold resources. S&P noted that these countries are still considered stable by investors, who hope to invest during rising gold prices. In 2023, gold mines became a hot topic in the mining industry, accounting for two-thirds of M&A cases. 2024 marked the second consecutive year that gold led M&A in the mining and metals sector. No need to worry about the absence of large deals. S&P found that the 2023 M&A was mainly driven by Newmont's $16.49 billion acquisition of Newcrest Mining, making the 2024 M&A data even more impressive. S&P believes that without the sale of Newcrest, the total gold transaction value in 2024 would have been the highest since 2020. In 2024, the absence of mega deals (over $1 billion) led to the lowest average deal size in five years, at $428.1 million, a 24% drop from 2023. However, S&P pointed out that gold transactions remained high throughout the four quarters, with at least one high-value deal announced each quarter. Last year's top three M&A deals were at the company level, with gold and copper leading the way. The first was De Grey Mining's $3.26 billion acquisition by Northern Star Resources in December 2024. Following closely was Lundin Mining and BHP's $3.03 billion joint acquisition of Filo, a copper-focused Canadian company. The third was AngloGold Ashanti's $2.48 billion acquisition of Centamin. Event-driven base metal M&A. S&P analysts found that copper M&A in H1 2024 had only two deals, remaining stable. However, in H2, M&A activity accelerated due to rising copper prices. Of the 16 announced M&A deals, two-thirds were company acquisitions, mainly targeting Canada and Chile equally. The largest deal was the aforementioned acquisition of Filo. However, due to stricter M&A controls by the Canadian government in July, M&A activity in the country significantly decreased. Mining giants were the largest buyers of copper assets. Without $1 billion-level deals, the total M&A value of $5.7 billion in 2024 could have seen a 6% YoY decline. Large mining companies mostly invested in pre-production assets, a surprising shift as last year's main targets were operating mines. S&P stated that despite increased copper exploration budgets in 2024, mining companies were still reluctant to rely on exploration. After a quiet year in 2023, zinc-focused M&A activity rebounded significantly, with Boliden acquiring two mines from Lundin. The M&A value was $1.52 billion, the largest primary zinc deal in over five years, which is rare for zinc mines. On the other hand, nickel-focused M&A cases dropped from three to one, with the value plummeting by 97%. The only deal was Horizon Minerals' $20.3 million acquisition of Poseidon Nickel. More M&A to come. S&P expects that based on Q1 2025 announced deals, gold company M&A will continue throughout the year, with stronger M&A activity across the mining and metals industry. The company believes that geopolitical conflicts raise concerns about critical mineral supply, and US tariff policies have brought trade tensions to a peak, leading to metal price fluctuations, especially for gold and copper. S&P added that in February, Equinox Gold announced an $1.87 billion acquisition of Calibre Mining. So far, in the first two months of Trump's presidency, prices of these two metals have surged. Gold prices have repeatedly hit new highs, recently surpassing $3,050 per ounce. Copper prices are also nearing historical highs. S&P analysts stated that as geopolitical conflicts intensify, both large and small companies will take risks in M&A and supply chain integration.