Make Kitco Your Homepage

'There's going to be a major winnowing' - Douglas Silver on exploration companies

Kitco News

Editor note 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

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.