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Exploring the Surge: How Gold Mining Deals Are Transforming the Industry

BayStreet.ca - Fri Oct 13, 2023

USA News Group – Back in April, earlier this year Frank Holmes, CEO and chief investment officer of U.S. Global Investors, wrote an article for Forbes asking whether or not we are experiencing the start of a new golden age of gold mining deals. Now more than three months after the article was published, the gold mining sector has more than delivered, with a significant number of deals being made by miners of all sizes, including Element79 Gold Corp. (CSE:ELEM) (OTC:ELMGF), Newmont Corporation (NYSE:NEM) (TSX:NGT), B2Gold Corp. (NYSE-American:BTG) (TSX:BTO), Gold Fields Limited (NYSE:GFI) and Osisko Mining Inc. (TSX:OSK) (OTC:OBNNF).

For Element79 Gold Corp. (CSE:ELEM) (OTC:ELMGF) which continues to move towards developing its near-production Lucero gold mine project in Peru, this year has delivered a flurry of deals. The most recent shift of assets came in the form of transferring its Dale gold exploration project in Ontario, and sale of its wholly-owned subsidiary Synergy Metals Corp.

"The transfer of the Dale property to Synergy Metals will help unlock the property's true value and potential while allowing the Company to continue focusing on its core assets," said James Tworek, President and CEO of Element79 Gold. "The anticipated spin out and sale of Synergy Metals will also provide additional capital for the Company's growth and offer Element 79's shareholders an opportunity to participate in a new independent exploration-focused company with a promising gold project."

Prior to the Dale deal, Element79 announced it had executed the agreement of sale of multiple properties from its Battle Mountain portfolio in Nevada. Under the terms of that agreement, Element79 agreed to sell its interests and obligations in relation to its Long Peak and Stargo projects to a subsidiary of Centra Mining. Ltd. for a consideration of C$1M in shares.

"The sale of Long Peak and Stargo to Centra marks another milestone in Element79's journey for the strategic development of its high-grade gold assets," said Tworek. "This achievement enables us to unlock additional value from our extensive portfolio of prospective properties while advancing our core projects and driving their success to new heights."

Back in May, Element79announced an update regarding the sale of its other Battle Mountain Portfolio assets (North Mill Creek, Elder Creek, and Elephant) in exchange for C$1.125M to Valdo Minerals Ltd. The Battle Mountain Portfolio was originally comprised of 15 separate projects totaling over 44,478 acres across 2,203 unpatented claims in five counties: Elko County, Eureka County, Humboldt County, Lander County, and Nye County. Most of the Battle Mountain Portfolio is located within the Battle Mountain Trend, with several projects close to globally reputable gold deposits including Nevada Gold's Cortez Mine.

Each of these sales provide Element79 with an opportunity to free up some capital, which the company could potentially direct a portion of towards their Lucero property in Peru, which has had samples that returned up to 116.8 g/t Au Eq, which is consistent with historic high-grade production of 19.0 g/t Au Eq. As well, Element79 has already noted how mining-friendly Lucero’s jurisdiction is in Peru, which allows up to 350 tpd production while larger scale production permitting is underway.

Newmont Corporation (NYSE:NEM) (TSX:NGT) made a huge splash in May, in a $19 billion takeover of Newcrest, marking the gold sector’s biggest-ever transaction. The record-breaking deal surpassed the previous record also held by Newmont when it purchased rival Goldcorp Inc. in 2019.

"Following a robust due diligence process, we have identified a number of opportunities to unlock substantial value and will apply our experience and expertise to Newcrest’s complementary and exceptional portfolio of long-life, low-cost gold and copper assets," said Tom Palmer, President and CEO of Newmont. "Leveraging our experience from the acquisition of Goldcorp four years ago, we are positioned to deliver an estimated $500 million in annual synergies and an estimated $2 billion in incremental cash flow from portfolio optimization opportunities, both part of our strategy to maximize value for shareholders and other stakeholders."

In the case of B2Gold Corp. (NYSE-American:BTG) (TSX:BTO), the miner has expressed it’s not done with its aspiration for more acquisitions, after recently purchasing Sabina Gold which delivered with it the company’s first project in home country Canada. Completed in April, the C$1.1 billion deal included Sabina’s untapped mineral-heavy Black River Gold district in Nunavut, Canada, which is expected to start production in 2025. B2Gold has gradually ramped up output to roughly 1 million ounces of bullion currently from about 366,000 ounces in 2013.

“We’re definitely still looking for other opportunities, and as you know there’s a lot of big companies that are merging with each other right now,” said B2Gold’s CEO Clive Johnson in an interview with Reuters. “We’re not looking at adding more development projects, but looking at mines that are in production that don’t fit the criteria for some of these majors.”

Also with its eye on developing assets in Canada, Gold Fields Limited (NYSE:GFI) announced in May that it was setting up a joint venture with Osisko Mining Inc. (TSX:OSK) (OTC:OBNNF) to develop the Windfall gold mining project, located in Quebec, with Gold Fields kicking in C$600 million in cash for a 50% partnership stake. According to Gold Fields, a feasibility study has shown the Windfall project would have an initial mine life of 10 years, producing an average 294,000 ounces annually, which would potentially put it among Canada's 10 biggest gold mines.

“We are very pleased to be partnering with Osisko to bring the high-quality Windfall Project into production and believe that this will be the first mine of several in this partnership in a highly prospective region," said Gold Fields’ interim CEO Martin Preece said in a statement.

The joint venture counts as a significant deal for both Gold Fields and Osisko, however, following its failure to acquire Yamana, Gold Fields has also said it will no longer seek big mergers and acquisitions, instead pursuing incremental growth through targeted asset purchases.

Article Source: https://usanewsgroup.com/2023/02/13/how-to-build-the-perfect-gold-story-in-2023-a-textbook-example/

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