Industry Insights: Consolidation, a given
As new players and capital flow into Québec’s mining industry, key financial players, producers, and explorers forecast M&A activity in the year ahead.
“The environment is undoubtedly favorable for deal-making in 2023. Gold is above US$2,000/oz. We see financings getting done now, and this will likely increase.”
Frank Mariage, Partner, Fasken
“M&A and consolidation are inevitable in the junior space as many explorers are operating in the same commodity area coupled with limited sources of capital. Increasingly more companies are also looking to vertically integrate and not only want to do the extraction of the mineral, but also want to add value through downstream processing, and this will lead to more M&A.”
Thomas Bachand, Managing Director, Investment Banking, National Bank
“There is a trend towards consolidation in the junior space and M&A activity has been strong over the past 18 months. With inflation and current economic conditions, investors might not be deploying capital as happily as they have done over the past 18 months, but I am still hopeful that the incredible demand for critical minerals will be more than enough to support M&A activity.”
Louis-Nicolas Boulanger, Partner - Business Law Group, McCarthy Tétrault LLP
“To overcome the market challenges, I believe consolidation among companies in James Bay is necessary. Some major shareholders and Québec institutions share this view, which is leading to recent mergers in the region.”
Normand Champigny, CEO, Québec Precious Metals
“Today, a significant number of junior explorers are fighting for limited funding, and due to this difficult environment, I believe we will see increasingly more M&A. As demands are also increasing, majors want to secure reserves and are thus looking for consolidation opportunities and viable projects they can add to their portfolios.”
Mario Drolet, President, Mi3
“There is no doubt that we will see more M&A happening across the board in the entire mining industry. Even if gold itself and the major gold producers performed well, the junior and explorer market has become extremely cheap, and this devaluation will lead to more and more M&A activity.”
Simon Marcotte, President and CEO, Northern Superior Resources
