Can the no-premium Barrick-Randgold deal spark an M&A gold rush? – by Gabriel Friedman (Financial Post – January 29, 2019)

More Australian gold companies may be active in the M&A space this year, perhaps looking at Canadian companies

After Ian Telfer, chairman of Vancouver-based Goldcorp Inc., brokered a $10-billion sale of his company earlier this month to Newmont Mining Inc., he characterized it as one of the first in a series of deals coming to the gold sector.

“It was our sense that the industry was going to consolidate,” said Telfer. “It’s becoming a big company game for people who want exposure to gold.”

His remarks echo those made by a chorus of analysts, bankers and mining executives, who for months have been predicting a wave of mergers and acquisitions is about to hit the gold sector, where too many companies are chasing too few investors.

Throughout most of 2018, however, the spate of large mining deals never materialized. Then, Barrick Gold Corp.’s $6-billion acquisition of Randgold Resources Inc. in September, followed by the Newmont-Goldcorp deal this month confirmed many bankers’ views that Canada’s mining industry is finally shaking off the hangover from several years of underperformance and moving closer to consolidation.

“I think there is a view that money is coming back into the space,” said Ted Hirst, global head of resources for Canaccord Genuity. “We’re cautiously optimistic that there’s going to be a lot more M&A, and cautiously optimistic there’s going to be a lot of capital coming in.”

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