RBC Capital Markets' Senior Precious Metals Conference Focuses On Costs, M&A
10:14 AM EST, 11/16/2022 (MT Newswires) -- RBC Capital Markets said Wednesday that companies mainly focused on cost pressures and M&A during its Senior Precious Metals Conference held in London last Monday.
RBC said senior producers expect costs to remain elevated in 2023, with Agnico Eagle Mines Ltd. (AEM.TO) flagging that 40% of its costs were linked to labor although these were offset by currency depreciation compared to the U.S. dollar.
Barrick Gold Corp. (ABX.TO) noted that diesel comprised about 50% of its costs. To address labor challenges, the company is creating new opportunities for talent with its Nevada workforce by introducing childcare options and recruiting university graduates
Meanwhile, Kinross Gold Corp. (K.TO) emphasized higher-margin development options including advancing underground mining at its Round Mountain operation.
RBC said gold miners largely considered M&A but noted challenges that are preventing deals to be completed. B2Gold Corp. (BTO.TO) was critical of M&A barriers despite its willingness to pay reasonable premiums.
According to RBC, Wheaton Precious Metals Corp. (WPM.TO) reviewed how its model enabled developers to monetize full value for a portion of an asset, rather than selling out to a larger company at a discount to fair value, while still offering stream buyback terms that would not impede M&A.
Yamana Gold Inc. (YRI.TO) noted its pending sale to Agnico and Pan American Silver Corp. (PAAS.TO) placed its own assets in the right hands and proved to be positive for all parties involved, adding that premiums are a natural part of M&A across all other sectors.
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