Mining and Metals co-heads on recent M&A activity

March 03, 2020

Torys’ Mining and Metals co-heads Michael Amm and Michael Pickersgill spoke to The Northern Miner about the burst of M&A transactions in the mining sector over the past year, with Amm labelling the worries surrounding these transaction as “overblown”.

The article discusses the significant changes in the Canadian mining industry and how the consolidation of the global gold sector has “prompted concerns that Canada’s influence in the global gold mining sector is waning”.

But Amm said he had seen these types of acquisitions before and despite major companies being “gobbled up”, other will emerge.

“This has been a theme that’s been talked a lot about over the last 15 or more years of Canada losing significant companies. … Goldcorp has gone but look at the growth of companies like Agnico and Kinross,” Amm said.

Michael Pickersgill agreed with Amm’s sentiments that “the next group of majors could emerge from consolidation in the mid-tier space”.

“While M&A activity can reduce the number of large players in Canada, especially when the acquirers are foreign companies, M&A activity involving domestic players can also be a catalyst to create larger, stronger and more dynamic Canadian companies,” Pickersgill said.

“This is especially the case in the mid-cap space where combinations between players can create new potential future champions in the sector with bigger clout to develop projects and make further acquisitions.

“Kirkland Lake Gold’s recent acquisition of Detour Gold is a good example of the creation of a new larger cap Canadian gold company that has the potential to develop into a leading player in the sector.”

Subscribers can read the full article on The Northern Miner website.

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