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Here come the Aussies.

Flush with cash, Australian mining companies are buying Canadian gold mines and more are expected to join the fray.

Last week, Melbourne-based St. Barbara Ltd. reached a friendly agreement to buy Vancouver’s Atlantic Gold Corp. for $722-million. Atlantic owns and operates a very profitable gold mine in Nova Scotia with a long reserve life.

Earlier this year, Australia’s biggest gold company, Newcrest Mining Corp., paid US$806-million for a majority stake in Red Chris, one of Imperial Metal Corp.’s prized gold and copper mines.

A mini-renaissance in mergers and acquisitions (M&A) in the junior and intermediate Canadian gold sector comes not long after the world’s two biggest gold companies − Barrick Gold Corp. and Newmont Mining Corp. − struck multibillion-dollar transactions of their own.

After years of cost cutting, the balance sheets of many mining companies have improved, meaning M&A is once again a viable strategic growth option.

Superior-performing Australian companies are among the best positioned of any global companies to be the buyers and beaten-down Canadian companies are seen as the most vulnerable targets.

“Australian producers currently hold the upper hand in valuation, free-cash-flow generation and market caché to purchase Canadian assets, many of which have struggled mightily of late,” BMO Nesbitt Burns Inc. analyst Brian Quast wrote last week in a note to clients.

“We view the consolidation of Australian and Canadian mid-tier miners as being inevitable.”

The Australians are also showing up with wads of cash, as opposed to equity, giving them an edge in any competitive bidding scenario.

Atlantic Gold’s chief executive Steven Dean said the company entertained offers from “a number of parties,” but the heavy cash component of St. Barbara’s bid was hard to pass up.

“Pretty unusual,” he said of the 40-per-cent premium cash offer.

BMO’s Mr. Quast says the Australians may be only getting started.

“Australian gold producers have several options to expand in Canada in transactions that would be accretive to shareholders on the basis of net asset value, and/or cash,” he wrote.

Possible buyers include Evolution Mining, Saracen Mineral Holdings and Northern Star, which already has some familiarity with the North American market. In 2018, Northern Star bought the Pogo gold mine in Alaska from Japan’s Sumitomo for US$260-million.

Newcrest CEO Sandeep Biswas also made it clear that the company is ready to pounce again if the right opportunity presents itself.

With many Canadian gold companies trading at depressed valuations, the list of potential targets is long.

New Gold, Pretium Resources, TMAC Resources and Wesdome were named by Mr. Quast as possible takeover candidates. TMAC declined comment Monday and the other three companies could not be reached for comment.

At the heart of this new wave of mining M&A is the need for companies to grow and become relevant again, after close to a decade of poor returns, falling reserves and the rise of alternative investments with a similar risk profile, such as marijuana stocks.

In January, Toronto’s Barrick closed its US$6-billion zero-premium acquisition of Africa-focused Randgold Resources Ltd., which saw it add about a million ounces of gold production a year and bring in Mark Bristow, considered one of the industry’s best operators as its new CEO.

Just last month, Colorado-based Newmont (now Newmont Goldcorp Corp.) completed a US$10-billion acquisition of Vancouver’s Goldcorp Inc., promising investors the tie-up will lead to US$365-million a year in cost savings.

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