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