'There's going to be a major winnowing' - Douglas Silver on exploration companies
|Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here!|
(Kitco News) - Douglas Silver, CEO of Balfour Holdings, says there are too many companies in the gold space, but consolidation is unlikely to happen during the current market bottom. Rather, he sees M&A occurring at the top of the cycle when companies can raise the funds needed to finance the merger or acquisition.
Silver spoke to Kitco mid-September at the Precious Metals Summit 2023 held in Beaver Creek, Col
orado. "There's going to be a major winnowing because there's no capital coming into the exploration sector, so rather than having mergers you're going to have companies just die on the vine," he said, adding:
"We have too many companies, the capital markets can't support the large population."
Silver, a mining hall of famer in both Canada and the United States, and the author of 'Rise of the Mining Royalty Companies', is optimistic when it comes to political support for U.S. mining. He noted over $360 million of government money has come into either mining companies or universities to study critical minerals, including grants to Albemarle, the US-based chemicals giant, and to Lithium Americas' Thacker Pass project despite local opposition.
"That's quite a sea change for the people in U.S. mining."
Silver said automakers including General Motors, Ford, Tesla and Stellantis are investing directly in mining companies because they need the electrification metals.
Kitco Mining's coverage of the Precious Metals Summit 2023 was sponsored by Newcore Gold.
|Start date for British Columbia's largest gold mine is 2024|