World’s Number One Gold Miner Newmont (NYSE:NEM) (TSX:NGT) Acquires GT Gold

Monday, May 17 saw Newmont (NYSE:NEM) (TSX:NGT) complete its acquisition of GT Gold by scooping up the outstanding 85.1% of common shares of the Canadian exploration company in a C$393 million cash deal. Announced two months ago in March, the deal allows Newmont (NYSE:NEM) (TSX:NGT) to take control of the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation. 

Tatogga sits about 14km west of Imperial Metal’s Red Chris copper-gold mine in British Columbia. For Newmont (NYSE:NEM) (TSX:NGT), the acquisition gives the US-based gold mining company a major advantage in the region, and further consolidates its position as the world’s number one gold producer.

Bigger and Better

By adding the copper-gold project to Newmont’s (NYSE:NEM) (TSX:NGT) portfolio, the company will add significant gold and copper annual production to its overall output. It also expands the company’s foothold in the area by adding to its existing interest through the company’s 50% ownership in the Galore Creek project; the acquisition includes the Saddle North asset. The company has also opened up opportunities for further exploration beyond the deposits at Saddle North with this acquisition.  

Newmont (NYSE:NEM) (TSX:NGT) president and CEO Tom Palmer commented in a statement: “With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio. We will partner with the Tahltan Nation at all levels, and with the Government of B.C to ensure a shared path forward as the company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”

M&A Optimism Picks Up 

M&A activity has picked up again after a sluggish rut in 2020 for the entire mining industry, but beautiful British Columbia’s volume has been higher than the average. Many of the deals in the last six months have involved deals with Vancouver-headquartered companies or companies with projects in the province. 

In 2020, there was the sale of the New Gold (NYSE:NGD) (TSX:NGD) Blackwater property south of Prince George to Artemis Gold (TSX.V:ARTG) for a total of $190 million. The snowfield project operated by Pretium Resources (TSX:PVG) was bought by Seabridge Gold Inc. (TSX:SEA) in December 2020 for $100 million in cash, a 1.5% net smelter royalty on all production, and a future contingent payment of $20 million. Those deals began to foreshadow a pickup in M&A activity as miners’ optimism rose with the lifting of restrictions and business operations in some parts of the economy. 

In early 2021, Eldorado Gold (NYSE:EGO) (TSX:ELD) made a neat and tidy acquisition of QMX Gold Corp. (TSX.V:QMX) for $132 million to kick off the new year. 

More activity is likely with higher volume as well as bigger buyouts as a dearth of exploration projects or development projects makes anything operating or of a higher-quality worth even more. With everything scrambling to scoop up the same properties and projects, the competition is fierce, and it is driving bidding wars and competition not unlike the red-hot Canadian housing market.

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

By Matthew Evanoff

I cover the mining industry and the best mining stocks around the world. I write about industry news, individual companies, projects, management, and profiles on industry leaders.

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