Gold M&A back on the agenda as coronavirus restrictions ease

LONDON/TORONTO (Reuters) - A lull in corporate takeover activity among gold miners is expected to end as new coronavirus-linked travel restrictions are lifted in coming months, clearing the way for prospective buyers, industry executives and fund managers said.

FILE PHOTO: Melted gold flows out of a smelter into a mould of a bar at a plant of gold refiner and bar manufacturer Argor-Heraeus SA in the southern Swiss town of Mendrisio, March 1, 2012. REUTERS/Pascal Lauener/File Photo

Deals this year have been hobbled by lockdown measures to curb the spread of the virus, preventing acquirers from travelling to inspect acquisition targets.

Miners year-to-date have struck 275 transactions worth about $6.9 billion, including net debt, according to data from Refinitiv, down from 329 deals valued around $26.8 billion in the six months to June 2019.

Last year's tally included the closing of multibillion-dollar deals by Barrick ABX.TO and Newmont NEM.N.

"Our industry is considering coronavirus a thing of the past as most countries are easing lockdowns and this should propel M&A activity again," said Ingo Hofmaier, SolGold’s SOLG.L executive general manager of project and corporate finance.

“Uncertainty and inability to visit mine sites was clearly not helpful.”

(GRAPHIC: Gold mining mergers hit coronavirus snag - )

Solgold, whose largest shareholder is BHP BHP.AX, earlier this month struck a financing deal worth up to $150 million with streaming company Franco-Nevada Corp FNV.TO.

Gold XAU= is trading at its highest since 2013, around $1,700 an ounce, because of its safe-haven appeal.

"We are being shown a lot more deals but with coronavirus, due diligence is tricky if you are not based on the ground and near the site," said Bert Monro, chief executive of West Africa-focused Cora Gold CORAC.L.

Deals this year largely took shape before the outbreak, executives and bankers said.

In March, Endeavour Mining EDV.TO offered C$1 billion ($726.9 million) for Toronto-listed Semafo SMF.TO. Silvercorp Metals SVM.TO this month hiked its bid for Guyana Goldfields GUY.TO, while China's Shandong Gold Mining 600547.SS1787.HK offered C$230 million ($167.9 million) for struggling TMAC Resources TMR.TO. SSR Mining SSRM.TO also snapped up Alacer Gold ASR.TO.

“Overall we expect more deals in the mid-cap space as companies compete to become relevant,” said David Baker of Baker Steel Capital Managers.

Reporting by Zandi Shabalala in London and Jeff Lewis in Toronto; editing by Ernest Scheyder