In the latest sign that the gold mining sector is consolidating, Toronto-listed Endeavour Mining Corp. on Monday announced a $2.4 billion all-stock acquisition of Teranga Gold Corp., creating a new West African-focused senior producer.
It marks Endeavour’s second acquisition since July and would propel the company into one of the world’s 10 largest gold miners, with six mines spread across three African countries, capable of producing around 1.5 million ounces of bullion per year.
In an interview with the Financial Post, Endeavour’s chief executive Sebastien de Montessus said the deal provides operational synergies, and gives his company geographic concentration in Burkina Faso’s Houndé gold district, with additional mines concentrated in Senegal and Cote D’Ivoire.
With a larger market capitalization and production profile, he said Endeavour will look more attractive to institutional and generalist investors seeking exposure to gold mining companies.
“Clearly, the industry needs to further consolidate,” de Montessus said. “When you look at the size of most players — they are pretty small players compared to the attractiveness of the industry for generalist investors, so I think this is a trend that will continue.”