I am definitely not in the camp of those who, as our stock price is rising, would be happy to take the money and run. Run where? Where are you going to find greater prospects than we have right here? Forget the near billion dollar valuation. We can go a whole lot farther than that.
I mention this here because I just have this feeling in my gut that something along these lines may happen this year. We’re on the GDX now and I would guess more and more large, hungry companies now have us on their possibilities list. It’s hard to remain in the shadows when you are doing as well as we are.
The biggest problem for me in getting taken out is that the premiums shareholders typically end up with are such embarrassingly small pittances.
Gold mining M&A poised to heat up in 2022 as asset pipeline runs bare
(Jan, 21, 2022) “M&A among gold companies jumped in 2021, and deals are poised to increase in 2022 as miners scramble for a shrinking number of producing assets to keep their pipelines full.”
"’It has actually been a very busy year ... and I see the pace of M&A only picking up,’ Gold Royalty Corp. President, Chair and CEO David Garofalo said in LinkedIn direct messages.”
"’The few assets left are what people have to reinforce their depleting reserves,’ Burzynksi said in an interview. ‘Otherwise, you're looking at seven or so years to drill out a new deposit.’
The draining pool of gold assets for sale comes amid a longer-term issue faced by the gold sector, which is declining reserves due to dropping gold discoveries. There has been a steep drop in reserve life among major gold miners, S&P Global Market Intelligence showed in a 2020 analysis.
‘Sixteen of the world's 20 largest gold miners ... saw their overall remaining years of production fall over the 2010-19 period,’ Market Intelligence analyst Robert Anders said in the Aug. 18, 2020, report, pointing to declining discovery rates and lackluster investment in exploration as drivers of the trend.
The issue has not escaped industry executives. Barrick Gold Corp. President and CEO Mark Bristow said in late 2020 that the sector faced a ‘serious reserve crisis’ and called for greater consolidation.”
Stable gold price builds confidence
Prior to 2021, the gold sector was held back in recent years by unstable company valuations in a notoriously volatile gold market, said Matthew Lennox-King, president and CEO of Contact Gold Corp., an exploration company that owns gold assets in Nevada.
But gold company valuations stabilized through 2021 amid a historically strong gold price that traded at about $1,800 per ounce for much of the year. As a result, executives may be more willing to entertain proposals, Lennox-King said in an interview.
‘If you have steady baseline valuations in the market, I think that's constructive,’ Lennox-King said. ‘That sets us up pretty well for more M&A in 2022.’
Producing gold assets were increasingly targeted through 2021, suggesting miners may have gained confidence in pursuing deals given a fairly stable gold price, Market Intelligence analyst Nick Wright said in an email.
‘That takes some of the risk out of acquiring producing assets, and I think we're seeing the results,’ Wright said.
Miners and their backers prefer assets in politically stable countries such as Canada, and ideally producing assets. But with the pipeline of top-producing gold assets for sale thinning out, development-stage assets may increasingly become targets in 2022, Wright said.
‘We have seen a willingness for producers to take on more development risk,’ Gold Royalty's Garofalo said. ‘And they will have to do that to create any sort of pipeline.'
Gold miners are also looking to expand to be included in exchange-traded funds. It has become increasingly important to have a larger market cap and a higher trading volume to meet thresholds to be included on some indexes and to attract major investors, Burzynski said.
‘The game has become: be the biggest or get bigger. And we saw that with Kirkland and Agnico,’ Burzynski said.”
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/gold-mining-m-a-poised-to-heat-up-in-2022-as-asset-pipeline-runs-bare-68503860?utm_source=google&utm_medium=cpc&utm_campaign=Brand_DSA_Search_Google&utm_term=&utm_content=593203393199&_bt=593203393199&_bk=&_bm=&_bn=g&_bg=136832265538&gclid=CjwKCAjw9e6SBhB2EiwA5myr9tdB8D0EXf0Zv64x4is5GN0u_Fa04DWAuQNCXCTRjQ4wxJF_1_ZQhhoC398QAvD_BwE
Gold industry M&A set to continue in 2022 despite racking up $21.3bn in value last year
(Jan 17 2022) “GOLD industry merger and acquisition activity last year totalled $21.3bn, the second highest ever in which an estimated 38 million ounces were acquired in 44 deals, according to research by Bank of America.
It added that more M&A was on the cards in the sector this year.
‘Can it continue in 2022? It needs to, in our view. companies that don’t replace reserves risk (severe) derating and are likely to be consolidated(on the cheap) in our view,’ said the bank’s analyst Michael Jalonen.
Cost inflation which could move into double digits for gold producers this year would also contribute towards M&A activity, Jalonen said.
‘We think that gold majors may seek to replace older, higher cost (and hence most exposed to inflationary pressure) assets, effectively ‘bolting on’ mid-tiers with a single quality, lower cost asset,’ he said.
Increasing dealmaking partly turned on the impact of a higher gold price, Jalonen said. The cost of acquisition last year was an all-time high of $1,358 per ounce. This was as the net present value to share price of gold seniors increased 100% versus a 40% increase in the ten year average gold price the bank used for net asset value and reserve replacement.”
https://www.miningmx.com/news/gold/48513-gold-industry-ma-set-to-continue-in-2022-despite-racking-up-21-3bn-in-value-last-year/