Why Pressure To Replace Mined Reserves May Be A Big Driver For M&A Of Gold Mining Operations In 2021
Palm Beach, FL – March 30, 2021 The global pandemic has again shown that in times of uncertainty investors flock to gold. As a result, mining operations are under pressure to mine more of the precious metal. In 2020 this demand resulted in a large number of smaller mergers and acquisitions. Industry experts are predicting another round of consolidation for the industry in 2021, although they aren’t looking for mega-mergers. Instead, they expect to see a continuation of the trend in 2020 that brought a larger number of smaller deals. In a recent report, BOA analyst Michael Jalonen said his team believes the pressure to replace reserves that have been mined will be one of the big drivers for mergers and acquisitions this year. They noted that gold reserves have been falling since 2012, while gold output has remained stable. Further, their coverage universe must replace 50 million ounces of reserves mined each year. He added that the team expects more interest in targets in the U.S., Canada, Australia and other parts of the world that are politically safe. They believe the M&A market will be more of a seller’s market this year. The team expects a wave of M&A among gold miners in 2021, noting that the pressure to replace mined reserves will be one of the big drivers for mergers and acquisitions this year. Active stocks in the mining markets this week include Xander Resources Inc. (OTCQB: XNDRF) (TSXV: XND), AngloGold Ashanti Limited (NYSE: AU), Gold Fields Limited (NYSE: GFI), Franco-Nevada Corp. (NYSE: FNV) (TSX: FNV), Kirkland Lake Gold Ltd. (NYSE: KL) (TSX: KL).
Jalonen continued say in that the BofA team doesn’t expect to see mega-mergers in the mining space this year. Instead, they look for senior gold producers to optimize their assets to lower costs and build the next generation of growth projects. However, they also point out that senior producers are keeping a watch for available world-class assets. Jalonen and team added “that last year’s mergers and acquisitions in the gold mining market was partially driven by senior gold producers disposing of non-core assets. This year, they expect senior mid-tier gold producers to review their recently-enlarged asset basis for non-core assets to dispose of. The result could be the creation of new producers and developers this year, just like last year.”
Xander Resources Inc. (OTCQB: XNDRF) (TSXV: XND) BREAKING NEWS: DRILLING CREW & EQUIPMENT MOBILIZED TO VAL-D’OR GOLD CAMP – SENNEVILLE CLAIM GROUP – Xander Resources Inc (“Xander” or the “Company”) is pleased to announce that Magnor Exploration Inc., a drilling crew, and geological staff have been mobilized to the Senneville Claim Group in the eastern region of the Val-d’Or Gold Camp where drilling is now scheduled to commence once set-up is complete. Despite previous delays beyond the control of Xander, the Company is now ready to start the first 3 drill holes of its 9-hole maiden drilling program on the Senneville Claim Group.
Xander plans to drill the first 3 holes of a 9-hole program totaling over 3,000 meters to confirm the successful drilling conducted on the property in 2012 (reported in the Xander’s press release dated November 19, 2020). The sites have been prepped with drill pads which are just off Route 397 Nord and 22 km North of Val-d’Or, Quebec. Gold-bearing zones in this area are associated with shear zones, faults, tension fractures and tectonic breccias and generally associated with syn-volcanic intrusions (ref: GM68366 garden island report page 24 (section deposit type)).
Xander’s Senneville Claim Group comprise of over 90 sq. km and is contiguous in the South to Probe Metals’ new discovery, and contiguous in the North to Monarch Mining and in close proximity to QMX Gold’s (soon to be Eldorado Gold) projects in the Val-d’Or Gold Camp. The Senneville Claim Group is located in the eastern part of the Abitibi Greenstone Belt, about 25 km northeast of the gold mining center of Val-d’Or, Quebec. The claims extend from the Lacorne Batholith in the west to the contact area of the Pascalis Batholith in the east and are contiguous to Probe Metals’ new discovery. (Probe Metal press release Oct. 28, 2020).
James Hirst, CEO stated, “Finally after several delays beyond our control we are starting our first drill program on the Senneville Claim Group. Monarch Mining are currently continuing an exploration program on strike and contiguous to Xander and we are contiguous to Probe Metals who are currently active on their Pascalis Gold Trend where they announced drilling results of 5.9 g/t Au over 9.2 meters. Probe Metals also announced the discovery of two new gold zones in the area, one of which returned 94.1 g/t Au over 0.6 meters. To the south and contiguous to Probe Metals is QMX Gold (soon to be Eldorado Gold) who are expanding their Bonnefond deposit where they reported 6.48 g/t Au over 73.2 meters. To our north we are contiguous to Monarch Mining Corporation (GBAR), formerly Monarch Gold who, on November 2, 2020, announced acquisition by Yamana Gold for approximately $152 million, of their Wasamac underground project. Wasamac has proven and probable reserves of 1.8 million ounces of gold at 2.56 g/t.” Read this entire release for the Xander Resources news at: https://xanderresources.ca/news/
Other recent developments in the mining markets include:
AngloGold Ashanti Limited (NYSE:AU) recently issued its suite of annual reports for 2020, highlighting its delivery on strategic objectives and its commitment to continued focus on its environmental, social and governance (ESG) performance.
Over the course of 2020 – a year in which the COVID-19 pandemic caused disruption across the world – the quality of AngloGold Ashanti’s portfolio improved, the Obuasi Redevelopment Project made steady progress to completion, net additions were made to both Ore Reserve and Mineral Resource, net debt fell to its lowest level in a decade and the dividend increased more than fivefold.
Gold Fields Limited (NYSE: GFI) recently welcomed the electricity generation license approved by the National Energy Regulator of South Africa (NERSA) for the construction of a 40MW solar power plant at its South Deep mine.
The acting CEO of NERSA now has to authorize the license, a decision that should be forthcoming over the following weeks. All the regulatory approvals to proceed with the project are then in place. Gold Fields will update its definitive costings and finalize all the required internal processes to commence the project as soon as possible. The solar plant has the potential to provide around 20% of South Deep’s average electricity consumption.
Franco-Nevada Corp. (NYSE: FNV) (TSX: FNV) recently announced that its Annual Information Form, Consolidated Annual Financial Statements and Management’s Discussion and Analysis for the year ended December 31, 2020 have been filed with Canadian securities regulatory authorities. Franco-Nevada has also filed its Form 40-F for the year ended December 31, 2020 with the U.S. Securities and Exchange Commission.
Franco-Nevada’s management team will host a Virtual Analyst Day webcast, April 15, 2021 from 10:00 am ET to 12:00 pm ETto review its assets and to announce the release of the 2021 Asset Handbook and 2021 Environment, Social and Governance Report (ESG Report). Interested analysts and investors are invited to participate
Kirkland Lake Gold Ltd. (NYSE: KL) (TSX: KL) recently announced that the Company will host two “Teach-In” presentations on March 31, 2021. The first presentation will be held from 9:00 am ET – 12:00 pm ET and will review information included in a new NI 43-101 technical report for Detour Lake Mine to be filed on SEDAR and posted to the Company’s website on or before March 31, 2021. The second presentation will be held from 2:00 pm ET – 3:00 pm ET and will review highlights of the Company’s 2020 Sustainability Report, also to be filed on or before March 31, 2021. Those wishing to participate in one or both of the presentations can do so by clicking on the appropriate link(s) below and registering for the event(s). Confirmation of registration will be received via email with additional information for accessing the presentations being provided. Q&A sessions will follow the presentations for both the Detour Lake and 2020 Sustainability Report “Teach In” events with questions to be submitted through a Webex Chat. The Webex links will also be available on the Company’s website.
Kirkland Lake Gold Ltd. is a senior gold producer operating in Canada and Australia that is targeting 1,300,000 – 1,400,000 ounces of production in 2021. The production profile of the Company is anchored by three high-quality operations, including the Macassa Mine and Detour Lake Mine, both located in Northern Ontario, and the Fosterville Mine located in the state of Victoria, Australia. Kirkland Lake Gold’s solid base of quality assets is complemented by district scale exploration potential, supported by a strong financial position with extensive management expertise.
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