The mining sector has seen a flurry of mergers and acquisitions (M&A) activity this year, with several significant deals announced. These transactions involve companies from various countries across a wide range of commodities, including gold, nickel, coal, and vanadium. Here’s a closer look at these high-ticket deals and what they mean for the companies involved.
Newmont (TSX: NGT) buys Newcrest Mining (ASX: NCM) for US$16.8B
One of the biggest talking points of the year came with mining giant Newmont concluding a US$16.8B takeover of Newcrest Mining, leading to the formation of what it claims to be the globe’s leading gold miner along with “robust” copper production. Newcrest Mining’s shareholders approved the acquisition with a vote of 92.63% cast in favour of the deal.
The transaction became legally effective on 18 October, followed by the delisting of Newcrest from the Australian Stock Exchange, Papua New Guinea National Stock Exchange, and Toronto Stock Exchange a few weeks later.
BHP’s (LON: BHP) US$6.4B buyout of OZ Minerals (ASX: OZL)
In April, BHP’s subsidiary BHP Lonsdale Investments, saw the purchase of 100% of OZ Minerals’ shares for a whopping A$28.25 each.
In accordance with the acquisition scheme, OZ Minerals shareholders received A$26.50 per share, along with a fully franked special dividend of A$1.75 for each share.
BHP CEO Mike Henry commented: “This acquisition strengthens BHP’s portfolio in copper and nickel and is in line with our strategy to meet the increasing demand for the critical minerals needed for electric vehicles, wind turbines, and solar panels to support the energy transition. Combining our two organisations will provide options for growth, bring new talent and innovation to unlock these resources in a sustainable way, and deliver value to shareholders and communities.”
Nickel Industries (ASX: NIC) and the Excelsior Nickel Cobalt project
Another significant M&A to hit headlines this year came from Nickel Industries Ltd., which reached a US$1.27B deal to acquire a 55% interest in the Excelsior Nickel Cobalt high pressure acid leach (HPAL) project in Indonesia. The project is expected to produce about 72,000tpa of contained nickel equivalent. This acquisition is subject to shareholder approval and the payment of a refundable deposit of US$126.5M.
Evolution Mining’s (ASX: EVN) US$475M copper-gold deal
Evolution Mining Ltd.’s deal targeting a copper-gold project in Australia caught the headlines in December of this year. The company will pay up to US$475M to acquire an 80% stake in the Northparkes copper-gold mine in New South Wales, Australia, from Chinese mining company, CMOC Group Ltd.
PT Petrindo Jaya Kreasi Tbk acquires PT Multi Tambangjaya Utama
Indonesian miner, PT Petrindo Jaya Kreasi Tbk, signed an agreement to acquire coal mining company, PT Multi Tambangjaya Utama, for US$218M from PT Indika Indonesia Resources and Indika Capital Investments Pte. Ltd. The acquisition will not only increase Petrindo’s annual coal production, but also strengthen the company’s operations in the province of Central Kalimantan.
Australian Vanadium (ASX: AVL) merges with Technology Metals Australia (ASX: TMT)
Technology Metals Australia Ltd. and Australian Vanadium Ltd. have agreed to a US$217M merger in a synergistic bid to become Australia’s first operating primary vanadium producer.
The companies will merge via a proposed scheme of arrangement under which Australian Vanadium will acquire 100% of the Technology Metals shares on issue.
Australian Vanadium is making progress with its eponymous Australian Vanadium Project at Gabanintha, Western Australia. The company’s wholly owned subsidiary, VSUN Energy, is dedicated to the development of vanadium flow batteries for long-term energy storage in the Australian market.
Technology Metals owns the Murchison Technology Metals Project (MTMP) in its entirety. This project is anticipated to cater to the worldwide demand for high-purity vanadium, a mineral increasingly acknowledged as critical globally.
The reasons for the collaboration include improved project economics, expansion potential, enhanced financing capabilities, heightened market significance and liquidity, synergies, and expertise.
IsoEnergy (TSXV: ISO) closes with Consolidated Uranium (Formerly TSXV: CUR)
Toronto-listed IsoEnergy Ltd. agreed to acquire the rest of smaller peer Consolidated Uranium Inc.’s shares that it did not already hold in a deal valued at around US$176M. The merger resulted in Consolidated Uranium becoming a wholly owned subsidiary of IsoEnergy as of 8 December.
“The closing of the merger between IsoEnergy and Consolidated Uranium marks a significant milestone for IsoEnergy in cementing its position as a well-funded, globally significant, multi-asset, multi-jurisdiction uranium developer and explorer,” IsoEnergy CEO and director Philip Williams commented.
“The company now ranks among the largest publicly traded uranium companies in the world allowing for greater access to capital and trading liquidity, broader attractiveness among investors and utilities as well as positioning the company strongly for continued growth through further M&A.”
Silvercorp Metals Inc. (TSX: SVM) and OreCorp Ltd. (ASX: ORR)
Silvercorp Metals Inc.’s US$171M bid to acquire OreCorp Ltd. topped metals and mining transactions for the week ended 11 August. The company’s release states the acquisition will create a diversified, high growth precious metals company if OreCorp shareholders vote in favour of the transaction on 18 January 2024.
OreCorp currently holds an 84% interest in the Nyanzaga Gold Project located in the Mwanza region of Tanzania in partnership with the Tanzanian government. Key permits are in place to develop Nyanzaga for first gold in H2 2025. A definitive feasibility study, announced in August 2022, estimated that Nyanzaga could deliver 2.5Moz of gold over a 10.7-year mine life.
Highlander Silver (CSE: HSLV) and SSR Mining (NASDAQ: SSRM)
Canadian exploration company, Highlander Silver Corp., agreed to acquire the San Luis gold project in Peru from SSR Mining Inc. for US$42.5M. The San Luis project is located in the Ancash Department of central Peru and has historical measured and indicated mineral resources of 348Koz of gold and over 9Moz of silver. SSR Mining will maintain a 4% net smelter return royalty.
This acquisition is transformational for Highlander Silver, providing the Central Andes focused team with a high-grade gold-silver project and potential for growth.
The transaction is expected to be completed in the first quarter of 2024, subject to certain customary closing conditions including receipt of any required regulatory approvals.
Moneta Gold (TSE: ME) merges with rival Nighthawk Gold (TSX: NHK)
To round things up, Moneta Gold Inc. has entered an agreement to acquire all the issued and outstanding common shares of Nighthawk Gold Corp. in a deal valued at C$12.5M.
The merger will create a leading Canadian gold development company, with the combined company benefiting from a strong balance sheet, a skilled leadership team, and a high-quality portfolio underpinned by a 7.8Moz indicated and 10Moz inferred gold resource.
The merger agreement is expected to close in the first quarter of 2024, and the concurrent financing is expected to be completed on or about 19 December 2023.
The recent surge in M&A transactions within the mining sector is indicative of a broader trend of consolidation as companies seek to diversify their portfolios, gain access to new resources, and increase their operational efficiencies. As these companies harness their collective capabilities to explore, develop, and extract valuable resources, their prospects appear increasingly promising. This consolidation wave not only strengthens their market position but also paves the way for sustainable growth in the ever-evolving mining landscape.
