Gold Price Drop Could Slow Mining M&A

Reuters reported that the recent gold price drop may slow M&A activity in the mining space. Momentum had just been picking up, but market watchers believe “predators will turn more cautious before splashing out cash … at least until bullion shows signs of stabilizing.”
As quoted in the market news:

The value of completed gold mining mergers and acquisitions so far this year has reached $3.2-billion, compared with $4.4-billion for all of 2014, according to Reuters data.
Gold this week took its sharpest dive since September 2013, landing at $1 088 per ounce, a five-year low.
That sent key indices measuring the health of gold mining companies crashing in its wake.
The Australian and Canadian indices fell 11% each, while the Johannesburg Stock Exchange gold index dropped 12%.

Hedley Widdup, a fund manager at Lion Selection Group Ltd. (ASX:LSX), commented:

There’s still an appetite to grow through M&A (mergers and acquisitions). The issue now is shareholders and funds providers will be looking at the gold price and wondering about valuation.

Click here to read the full Reuters report.