A week in which the trend for M&A in the gold sector accelerated ended with predictions that the copper sector could be next, as analysts issued a bullish outlook for the mineral.
The report from Fitch Solutions on mining the Americas pointed to promising spot levels on nickel, lead, copper, tin and gold, auguring well for 2019. The bullish outlook for copper, in particular, is expected to prompt mining conglomerates to beef up their assets through acquisition.
It came as Auryn Resources announced its latest find in Peru. Hoped-for oxide copper mineralization at the Milpoc prospect on Auryn’s Sombrero North copper property in Peru was supported by rock samples graded as high as 8.75% copper and 101 grams silver per tonne.
Fitch, which highlighted South American copper as an investment hotspot, also likes Canada's cobalt sector. Alongside Chile, Canada is highlighted for its willingness to use innovative technologies to minimize environmental impact, as disputes over land use, pollution and resources, such as water, become a major factor in mining development.
Of course, the week’s big mining news was the unveiling of Newmont Mining's US$10-billion deal to acquire Goldcorp, on Monday. Canadian Mining Report had predicted further mergers in the gold mining sector only last week, and didn’t expect this scenario to move quite as quickly as it did!
The latest takeover sees Newmont regain top spot from Barrick Gold following its merger with Randgold in December, and is likely to see cutbacks in headquarters functions, such as those which are taking effect at Barrick’s Canadian offices. However, with the sector still fragmented at the smaller end of the scale, the likelihood of further corporate activity remains strong as higher gold prices and the need by many companies to boost resources.
The merger announcement came just days after Newmont Mining Corp said it was cutting 120 jobs at its Carlin mining operation in Nevada after deciding to reduce the life span of one mine and suspending part of another.
Among the Canadian small caps, Northern Superior Resources made a positive statement this week as the explorer announced it was ready to move forward with its TPK (Ti-pa-haa-kaa-ning ) gold-silver-copper project in north-western Ontario, and its Lac Surprise gold project in Quebec, following the completion of an option/joint venture agreement with Yamana Gold. Northern Superior Resources claims that it ”identifies exploration opportunities from its vast geoscientific data base and advances them through to discovery through its unique approach to exploration, with the intention of ultimately optioning, joint venturing or selling the asset.”
In terms of commentary, 321Gold.com owner, Robert Moriarty, gave an interview to Jay Taylor Click Here from his home in the south of France. Moriarty, a Vietnam veteran and legendary aviator who also owns 321Energy.com, took a dim view of the prospects for markets in general suggesting that “the idiots in Washington are about to blow up the US financially”.
But, he did have some kind words for Novo Resources, the Australian firm focused on exploring and developing gold projects in the Pilbara region of Western Australia. Moriarty highlighted the fact that Novo chief executive, Dr. Quinton Hennigh, and his team have solved key technical problems that could allow them to measure nuggets of gold in conglomerate, and to extract alluvial deposits with little water.
Pilabra also looks like a quiet place to hide if the US financial system implodes.