Miners aren't the only ones wishing commodity prices were soaring. Bay Street does too.
Very few mining deals were brokered in 2015 as the industry endured another year of plunging metal and mineral prices. Companies were expected to merge to stay alive but only a handful did. Instead, miners worked on single-asset transactions. The dollar amount was tiny compared to the multibillion-dollar deals made during the commodities boom.
Here is a look at this year's most memorable mining deals.
Alamos Gold and AuRico Gold: $1.5-billion (U.S.)
In an industry known for huge takeover premiums, Alamos Gold Inc. bought AuRico Gold Inc. without a premium. The acquisition gave Alamos control over AuRico's Young-Davidson mine in Ontario, a mining-friendly region. But it costs nearly $1,000 to produce an ounce of gold from the Ontario mine, a high sum when the price of the yellow metal is hovering just above the $1,000 mark.
Zaldivar: $1.005-billion (U.S.)
The partial sale of Barrick Gold Corp.'s Chilean copper mine was the hottest mining deal of the year. Zaldivar was sought after by most of the copper industry. In the end, it came down to two family-controlled Chilean companies, Empresas Copec and Antofagasta PLC. Antofagasta ended up paying just over $1-billion in cash and the sale helped Barrick meet its $3-billion debt-reduction target.
Cripple Creek & Victor: $820-million (U.S.)
When AngloGold Ashanti Ltd. put its Colorado gold mine on the market in February, it was hoping to get more than $1-billion. But the price of gold continued to tank, giving potential buyers the upper hand. After Newmont Mining Corp. and Kinross Gold Corp. visited Cripple Creek & Victor, they lowered their preliminary bids. Colorado-based Newmont came through with the winning offer in a deal that was praised by analysts.
Round Mountain and tiny Nevada assets: $720-million (U.S.)
After Zaldivar, this Barrick asset sale was anticlimactic. The mines were Barrick's higher-cost operations. One of the mines was near the end of its life. The larger assets went to Kinross Gold Corp., which is already the operator and 50-per-cent owner of Round Mountain. Kinross had been under pressure to diversify out of Russia, where its biggest assets are located. Private equity firm Waterton Global Resource Management gobbled up a smaller project and mine for $110-million.
Tahoe Resources and Rio Alto Mining: $1.3-billion (Canadian)
Tahoe Resources Inc. bought Rio Alto Mining Ltd. in a mostly stock deal to expand further into South America. The acquisition gave Tahoe, the owner of a large Guatemalan silver mine, control over Rio's gold mine in Peru. Tahoe's share price held up until Goldcorp Inc. decided to sell its 26-per-cent stake in Tahoe. The stake sale in June sent Tahoe's stock plunging. Its stock has yet to recover.
Pueblo Viejo: $610-million (U.S.)
No one expected Barrick to sell part of this mine. The Dominican Republic gold mine is one of Barrick's suite of core assets. But desperate times call for desperate measures. Barrick sold part of its future production to Royal Gold Inc. for $610-million in cash.
Mantoverde and Mantos Blancos: $300-million (U.S.)
Anglo American PLC teased the market with the sale of its Chilean copper mines in the fall of 2014. It took the company about six months to formally put Mantoverde and Mantos Blancos up for sale and another five months to sell them. By that time, the price of copper had plunged to nearly $2 a pound from over $3. The low copper price highlighted the mines' high cost of production and made them even more unattractive. (Both mines had been producing less and less copper over the past five years and needed an infusion of capital to expand.) Anglo got $300-million from a group of investors led by hedge fund Audley Capital Advisors.
Denison Mines and Fission Uranium
Mining magnate Lukas Lundin had a stellar track record in mining deals until one of his companies – Denison Mines Corp. – failed to buy Fission Uranium Corp. in a $483-million (Canadian) stock deal. Dissident Fission shareholders voted against the takeover, saying Denison was not paying enough for its large uranium discovery in the Athabasca Basin.
Potash Corp. of Saskatchewan Inc. and K+S AG
Valued at $8.7-billion (U.S.), this would have been the biggest mining deal since the commodities boom. But Potash Corp. never made a formal offer, leading some to question whether the Canadian fertilizer giant was serious about buying its German rival.
How did it work out for K+S AG? Not so good. Its stock price soared when the bid became public. The company's executives said the proposal finally helped surface the value at its potash project in Saskatchewan but refused to speak to Potash Corp. without a formal offer and iron-clad job-security measures. K+S shares are now trading below the price they traded at before the deal went public.
X2's founder, Mick Davis, is one of the most high-profile names in the mining industry. The former Xstrata chief executive officer raised an impressive $4-billion (U.S.) from a handful of private investors. But none of it has been deployed. His investors have to approve of any proposal, making it difficult for Mr. Davis to buy anything. Investors are said to be frustrated. It is unknown whether they will pull their funds before Mr. Davis can start building his mining powerhouse.