Gold Miners Burned by Bad Deals Are Again Rushing to M&A
By GCRU Gold News on Wednesday, February 8 2017, 21:47 - Permalink
Top executives are on the hunt for mergers and acquisitions, and focusing on exploration as the industry emerges from survival mode. Gold prices have recovered and cost cuts are taking effect, delivering profits for companies that need to remedy a shortage of new discoveries and declining reserves.
“Beyond the next three to five years, there’s a significant drop off in the gold industry’s production profile,” said Arnold Van Graan, an analyst at Johannesburg-based Nedbank Capital. “Most companies are struggling to fill the gap that’s emerging and that’s why you’re seeing a resurgence in exploration and M&A.”
Due to fewer and smaller discoveries, reduced mine life and a lower gold price since 2013, the amount of economically viable gold in the world is declining. Major producers’ reserves have fallen 40 percent since 2011, according to Bloomberg Intelligence.