Gold Mining Mergers Rise Amid Declining Ore Grades

Declining gold ore grades are among several factors anticipated to drive gold prices higher in the coming years, offering opportunities for investors. [Outsider Club Header] Jun 14, 2023 By Luke Burgess for the Outsider Club Gold Mining Mergers Rise Amid Declining Ore Grades In 2018, Barrick's acquisition of Randgold Resources for $18 billion initiated a significant rise in mergers and acquisitions (M&A) among gold mining companies. This trend continued in 2021 with another major merger announcement, as Agnico Eagle Mines and Kirkland Lake Gold combined in a deal valued at nearly $11 billion. Additionally, several smaller deals occurred that year, such as Kinross Gold's $1.4 billion acquisition of Great Bear Resources, Newcrest's $2.8 billion takeover of Pretium Resources, and the recent $4.8 billion purchase of Yamana Gold by Pan American Silver and Agnico Eagle. Mining M&A activity remained strong in 2022, reaching its highest level in a decade, with 288 deals totaling $88.2 billion. This performance outpaced the global aggregate M&A activity, which experienced a 34% decline in deal value. In 2023, mergers and acquisitions in the mining sector continue to thrive. B2Gold announced in February its plan to acquire Sabina Gold and Silver in a deal valued at $823.66 million. In the same month, Newmont Mining unveiled a massive $17 billion takeover bid for Newcrest Mining, Australia's largest gold miner. Shocking Truck Stop Encounter! Long Beach, California is home of a very unusual truck stop. It looks like any other. You’d get a nasty hot dog. Some burnt coffee. And all sorts of weird characters stop here. But the truck drivers who use it have a secret. A secret that’s set to render fossil fuels obsolete... and Bloomberg says it will “skyrocket 1,000 times over.” [Click here for the full story.]( More recently, Royal Gold revealed its intention to acquire two Brazilian mines for a total price of $250 million. Several smaller deals have also been announced this year. The recent surge in gold mining mergers raises concerns about the industry's persistent challenge of declining ore grades. Over time, the average ore grades in gold mines worldwide have declined. This is primarily due to the necessity of mining lower-grade ores. Ore grade indicates the amount of gold contained within a rock, and higher-grade ores are more economically viable to mine. After centuries of mining, most of the world's high-grade gold deposits have been depleted, leaving predominantly low-grade deposits for commercial operations. Gold ore grade is typically measured in grams per tonne (g/t). So, for example, 30 g/t means there are about 30 grams of gold per tonne of rock. However, even with such grades, extracting just one ounce of gold requires processing a tonne of rock. [QUIZ] Most Investors Have No Idea... How do you think the Ukraine-Russia conflict will affect energy markets? - Sky-high oil prices thanks to new demand for non-Russian energy - A worldwide shift to green energy - Saudi Arabia emerges as the oil producer to replace Russia - Absolutely nothing Want to see the real answer? [Make your selection, and I’ll reveal it to you!]( This scarcity contributes to gold's value. Commercial gold mines operating with an average ore grade of 30 g/t are now exceptionally rare. The Fosterville Mine in Australia, acquired by Agnico Eagle in 2021, stands as one of the few major mines producing gold from such high ore grades. The average ore grade from gold mining operations worldwide has dropped to approximately 1.35 g/t, and this trend is expected to continue. As ore grades decline, the cost of mining gold increases. The World Gold Council's data indicates that the all-in sustaining cost (AISC) for mine production of an ounce of gold reached its highest-ever level at $1,289 in the first nine months of 2022. Declining gold ore grades are among several factors anticipated to drive gold prices higher in the coming years, offering opportunities for investors. In the long term, the demand for gold is projected to steadily rise. Companies with significant portfolios of the world’s remaining high-grade gold assets like Agnico Eagle are well-positioned to benefit from this trend. Until next time, [Luke Burgess Signature] Luke Burgess [icymi oc]( A Cashless Society Isn't a Scare Tactic, It's a Reality You’re going to start seeing a lot more headlines like this one... But pretty soon, the headlines aren’t going to be about countries like Bangladesh, India, or Pakistan. The headlines will be declaring the United States as a cashless society. Some experts predict this move could happen as quickly as July 27, 2023... The shift to a cashless society is the latest move from the Federal Reserve to gain even more control over the population and their finances. The Federal Reserve will say it’s not an attempt to control your money, but they also told us that the inflation last year was “transitory.” This is just the tip of the iceberg, and once the ball gets rolling it’s not going to stop. An electronic dollar will allow the government to track your every move, purchase, and even your internet activity. More and more businesses are becoming cashless themselves, and come July 27 we’re going to witness a monumental shift in our society. Those left unprepared could lose more than just their money and privacy, though. [I’ve outlined everything you need to know about the cashless society right here](, including three easy steps to protect yourself before it’s too late. Make sure you’ve taken [these three steps before we reach the point of no return...]( Follow the Outsiders [Twitter]( | [Facebook]( | [LinkedIn]( | [YouTube]( This email was sent to {EMAIL}. You can manage your subscription and get our privacy policy [here](. Outsider Club, Copyright © Outsider Club LLC, 3 E Read Street Baltimore, MD 21202. Please note: It is not our intention to send email to anyone who doesn't want it. If you're not sure why you're getting this e-letter, or no longer wish to receive it, get more info [here]( including our privacy policy and information on how to manage your subscription. If you are interested in our other publications, please call our customer service team at [1-855-496-0830](tel:/18554960830).