Major gold producers expected to put more mines up for grabs

Mining mergers and acquisitions are at a three-year high and $14 billion worth of deals have been announced this year.

Only since March there have already been four hostile bids, with a total value of $4.5 billion, which contrasts with $594 million during the entire 2013.

Goldcorp’s $3.3bn failed takeover bid for Osisko Mining was the largest unsolicited offer for a mining firm following First Quantum Minerals’ $4.7bn purchase of Inmet Mining in 2013.

Apart from company take-overs and mergers another source of deal flows are major gold companies trimming portfolios to cut costs and keep shareholders happy.

Top gold miner Barrick Gold put on the block eight mines, number two in terms of annual ounces mined, Newmont Mining are also looking at further asset sales, while AngloGold recently announced similar moves.

In total the 10 largest producers have announced $912 million worth of divestments this year according to Bloomberg as smaller firms with lower overheads and more leeway to restructure operations pick up undervalued assets.

The Daily Star quotes David Coates, a Sydney-based analyst as saying "majors seeking to continue divestments may have a narrowing window, as any decline in the gold price would cut mine valuations:"

“The majors will be looking to offload assets while they can get a decent valuation for them,” Coates said. “We do see the flow increasing over the balance of the year.”