Gold Sector Mergers and Acquisitions Spiked in H1 2020

SEATTLE (Scrap Monster):  The recently released report by Bank of America (BofA) Securities outlines the gold merger and acquisition (M&A) activities.

A total of 12 gold sector M&A deals were reported during the second quarter of the current year. Six out of these transactions involved assets that are currently in production. The transaction value of all these deals totalled $2.86 billion, almost double of those recorded during the initial quarter of the year. The Chinese buyers accounted for bulk of the purchases, the investment bank noted.

According to the report, the initial six-month period of 2020 was one of the best periods for acquisitions. The acquisition prices of gold company transactions relative to the prevailing average gold price were at the lowest level since 2011.

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The friendly $1.71 billion all-share merger of SSR Mining with Alacer Gold in early-May has led to the creation of a +600,000 oz. gold producer. The report also highlighted the C$190 million cash acquisition by Artemis Gold of New Gold’s Blackwater project in British Columbia, which according to BofA, has added over $200 million of new market value to the buyer.

The report further states that higher gold prices are likely to slow down the M&A deal flow in the second half of the year.