Make Kitco Your Homepage

How Fed tightening may lead to more resource sector M&A - Sandstorm Gold's Kazemi

Kitco News

(Kitco News) - Royalty and streaming M&A has been on a roll, noted Sandstorm Gold Royalities' CFO Erfan Kazemi.

Last week Kazemi spoke to Kitco.

Vancouver-based Sandstorm Gold Royalties (TSE: SSL) holds a portfolio of 250 royalties. Antamina, the world's third-largest copper mine, is a portfolio highlight. In 2022 Sandstorm sold approximately 82,400 attributable gold equivalent ounces and had revenue of about $148.7 million.

The royalty and streaming space was notable in 2022 for the number of deals. Nomad Royalty company was acquired by Sandstorm Gold Royalties in an all-share deal valued at approximately C$755 million. Royal Gold picked up Great Bear Royalties for about C$200 million. Lastly, Triple Flag Precious Metals picked up Maverix Metals for about US$86.7 million.

"It tended to be a theme of consolidation over the last 18 months," said Kazemi. "I think a lot of that had been telegraphed over many years."

Mergers and acquisitions may continue, said Kazemi, not just in royalty and streaming but in the resource sector as a whole due to central banks raising interest rates to fight inflation.

"Capital is becoming harder to obtain when interest rates are increasing. That's not surprising...[so] that might lead to more M&A," said Kazemi.

The lithium sector viewed by a key mining supplier - Metso Outotec

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.