After Last Year's Mega Deals, What to Watch for Gold M&A in 2022

Watch for mid-tier consolidation and diversification in 2022

Looking forward, Grant, who is a partner at PwC Canada, expects continued asset targeting by companies looking to expand their portfolios and production potential.

“In 2022, we expect to see continued consolidation in the gold sector,” she said.

She went on to explain that the focus on acquisition is aimed at addressing several factors, including security of supply, portfolio optimization, cost effectiveness, cost offsets and general value creation.

“The days of single-asset mining companies are definitely numbered,” she said. “They're just not able to attract capital in the same way that mid-tier or larger-tier companies are; that's why we're seeing the drive to consolidate.”

But the partner and national deal leader for the energy utilities, mining and industrial product sectors at PwC Canada expects to see some deal making on the mid-tier and junior side.

“We've seen quite a bit of consolidation at the high end. I think you're going to see a lot more mid-tier consolidations creating the next sort of tier of companies,” she said. “Some of the smaller (firms will) merge into bigger mid-tiers, (and) you're going to see some of the mid-tiers merge, then becoming larger tiers.”

Diversification is another trend to watch as miners look to maximize deposits and shareholder value.

“One of the main drivers is diversification, and it's twofold,” Grant explained. “It's geography diversification, which is obviously driving a bunch of it, but it is also commodity types.”

As the number of single-asset companies declines, experts anticipate that miners will increase the types of metals and minerals they recover, which has become a growing theme in recent years.

“So where you had your pure-play silver companies previously, quite a few of them have branched out into gold, where you wouldn't have seen that previously,” added Grant.

Metals used in electric vehicles and battery manufacturing are especially popular now, and are helping to reshape the way miners look at their assets. As Grant pointed out, many battery metals companies are targeting a wide variety of plays, including nickel, copper, lithium and zinc.

“Some of the major diversified companies that are more focused on base metals as an example, but do have precious metals as well, you're seeing them branch into commodities that they weren't previously interested in," she explained to INN in the interview.