Digging Deep

Some M&A in the mining sector made sense while some other deals are puzzling, observed Luc ten Have, founder of GoldDiscovery.com. 

This week Ten Have spoke to Kitco correspondent Paul Harris to record an episode of Digging Deep at Deutsche Goldmesse in Frankfurt, Germany. 

Some notable deals in 2024 were Osino Resources getting taken out by Yintai Resources for $272 million; Alamos Gold buying Argonaut Gold for $325 million; and Zijin Mining paying $130 million for a 15% stake in Solaris Resources. The headline deal is BHP Group attempting to buy Anglo American with a price tag estimated at $32 billion. To date, Anglo has rebuffed BHP Group. 

Ten Have said the industry as a whole has been insisting on more M&A. Some deals he likes. Other deals are a puzzle. 

"Sometimes you have like a clear project synergy," said Ten Have. "Two projects really add on to each other. It's a bolt on, in some cases. Sometimes the merger doesn't make sense."

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

BHP's bid for Anglo American indicates a heating M&A cycle: the race for assets is on.

On Friday Kitco correspondent recorded Digging Deep with guest Nicole Adshead-Bell from Cupel Advisory. 

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

The copper industry has got itself into a bind in that it's obsessed with big to giant mines, when smaller copper deposits should be tapped as well, is Christopher Ecclestone, Principal and mining strategist at Hallgarten + Company, told Kitco Mining’s Digging Deep.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Some precious metals equities have more than doubled since the start of the year as gold continues its surge.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Cost inflation is hitting the gold space but with gold pushing higher, deep discounts on gold equities may present good buying opportunities, says Joe Mazumdar, editor of Exploration Insights newsletter.

Mazumdar spoke to Paul Harris, host of Kitco Mining’s Digging Deep, on April 4.

Harris gave the example of IAMGOLD (TSX:IMG) recently pouring first gold at its Côté mine in Ontario, Canada. The capex (capital expenditures) on the project is a $2.965 billion. Gold Fields (NYSE:GFI) finally achieved production at its Salares Norte project in Chile following years of development plagued by skyrocketing costs and technical delays.

With gold up more than 10% since the start of the year, Mazumdar said the incentive to build new projects outweighs the costs; the opposite was happening in 2023. A higher gold price is also likely to bring about more mergers and acquisitions (M&A).

“Companies are seeing that the price is going to go up and it's best to get projects now,” he said.

Financings are another positive sign for the gold sector. The Yukon’s Snowline Gold (TSXV:SGD) this week did a $25 million bought deal financing, increasing its cash position to more than $70 million. Meridian Mining (TSX:MNO) also announced a $17.5 million bought deal.

Mazumdar said a lot of investors are playing gold by investing in physical metal or gold ETFs, rather than the juniors. Institutional funds have stayed away from a sector they see as under-capitalized and too small. Lack of liquidity is also a problem.

Harris countered that “investors are really still open to the power of drilling results,” giving the example of Awalé Resources (TSXV:ARIC), which last week hit 32 metres at 45.7 grams per tonne gold at its Odienné project in Côte d’Ivoire.

“The story jumped more than 100 percent,” he said, noting the share price has risen from 18 cents to more than a dollar since mid-March.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

The gold price continues to set new all-time highs, with gold equities starting to get in on the action as M&A activity increases, Junior Miner Junky, David Erfle, told Kitco Mining's Digging Deep.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Gold prices are at all-time highs, but rising costs at the miners have tempered an equity upside, noted Neil Adshead, consultant analyst at Commodity Discovery Fund.

On Friday Kitco Mining Correspondent Paul Harris recorded Digging Deep. 

Harris noted that despite the gold prices hitting all-time highs in 2024, the gold miners have not rallied. Year-to-date the gold miners index, the VanEck Gold Miners ETF, is down 3% to $29.60 a share. 

Adshead noted that the big, diversified miners have much larger market capitalizations. The gold miners are not keeping pace, because they just don't make the same margins as the large copper and iron ore miners. 

"[Gold miners] are not generating huge margins, so they tend to under-perform financially," said Adshead. "I even spoke to a gold company this week and he said: 'Yeah, it's all well and good that [golds at] $2,200 an ounce, but our costs have actually kept pace with the rise in the gold price, so we're not actually making any more money.'" 

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Copper prices are at the beginning of a big run, said Cupel Advisory Director Nicole Adshead-Bell. 

On Thursday Adshead-Bell recorded Digging Deep with Kitco Correspondent Paul Harris. 

Copper had a good week, hitting a seven-month high on news that China plans to mothball loss-making smelters. Reduced supply strengthens the long-term bull case for copper, noted Adshead-Bell. 

"The price is moving now [because] market participants are finally starting to realize that there is a very material, looming structural-shortage in primary copper supply," said Adshead-Bell. 

She added that the copper breakout has been a long time coming. Energy transition and artificial intelligence is going to require a lot more copper, and years of sub-$4 a pound copper has not been enough incentive to get miners to invest in new mines. 

"I think this is the very beginning of what I would say is a parabolic rise in the copper price," said Adshead-Bell. "We need that [price] rise to incentivize new supply. Copper is the critical commodity. Without copper none of the green energy, net zero and energy transition occurs."

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

The gold price is hitting all-time highs, but there is still scant interest in junior miners, noted JuniorMinerJunky's David Erfle. 

On Wednesday Erfle recorded the inaugural show Digging Deep, hosted by Kitco correspondent Paul Harris at PDAC in Toronto. 

PDAC is mining largest annual get together. Over 23,000 delegates attended last year's show. 

Erfle noted the lack of love junior miners are attracting despite precious metals jumping higher. 

"You could pretty much roll bowling balls down the aisle," said Erfle noting the lack of retail investors dropping by the company booths. "There wasn't that many people. I was walking around talking to companies at their booths [asking] them 'how many retail investors have come up to ask you about your company?' Many said one or two or none."

Erfle and Harris noted that Ecuador made a splash at PDAC, embracing mining investment and shoring up investor protections and mining regulations. 

Erfle noted that Argentina has a new president, Javier Milei who assumed office in December. Milei is rolling out pro-business policies, which should favor mining.  

"It's going to take it's going to take a lot of work," said Erfle. "A lot of things have to go right for him to turn that around within his term." 

Digging Deep is a new show from Kitco Mining. Join a discussion with the brightest minds in the resource investing sector and learn how to navigate the complex world of mining investment. Kitco Mining's Digging Deep, hosted by Paul Harris, is your weekly appointment to understand the key trends in the resource investment space. Paul sits with experts to dissect investment trends and understand the dynamic landscape shaping the future of natural resource extraction. Digging Deep is your guide to understanding resource investment and how to profit from it.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.