(Kitco News) – Consolidation in the mining industry is accelerating, but not every deal is winning investor support, said David Erfle, founder of JuniorMinerJunky. Speaking with Kitco Mining’s Digging Deep, Erfle warned that Coeur Mining’s planned US$7 billion all-share acquisition of New Gold, which would create a US$20 billion North American precious metals company, raises red flags for shareholders.
“If I were a shareholder of either Coeur or New Gold, I wouldn’t be happy with this deal at all,” he said, pointing to years of growth through dilution and a lack of dividends. Erfle argued that the merger follows a pattern of larger producers pursuing scale at the expense of shareholder value, despite Coeur’s history of equity issuance and limited payouts.
He compared the transaction to the earlier Equinox–Calibre merger, where the smaller, lower-cost producer added value to the larger company. “Integrating Calibre’s operations, Equinox Gold gained access to an experienced production base that lowered its all-in sustaining costs significantly,” he said. But not all shareholders saw the benefits. Erfle noted that VanEck, Calibre’s largest shareholder, opposed the deal, arguing it diluted the company’s growth potential.
Erfle also commented on Fresnillo’s C$780 million bid for Probe Gold, calling it “a criminally low price” for one of Quebec’s largest undeveloped deposits. The offer, he said, undervalues Probe’s 10 million ounces of gold in the Abitibi region and could trigger a bidding war from Agnico Eagle or Kinross. “This is a criminally low price for this project,” Erfle said, adding that Fresnillo’s bid may be tactical, designed to draw out higher offers from regional players like Agnico or El Dorado Gold, given the low break fee and close proximity to existing mills.
Recent transactions, he said, show that majors are increasingly targeting early-stage opportunities through strategic investments rather than full takeovers. Erfle pointed to new equity positions by Gold Fields and B2Gold as examples of companies seeking exposure to promising exploration assets while managing risk.
Turning to base metals, Erfle said the industry faces a looming copper supply crunch, highlighting recent feasibility studies from developers such as Solaris Resources and Arizona Sonoran Copper. He cited falling production from Glencore and disruptions at Grasberg as further evidence of tightening supply. He added that the proposed Anglo–Teck merger, valued at about US$53 billion, underscores how consolidation is expanding beyond gold as copper’s strategic importance grows.
On the macro front, Erfle said record third-quarter earnings and strong balance sheets show miners are entering a more stable phase of the cycle. “This has been par for the course as far as the correction on the downside,” he said, describing gold’s pullback from record highs as a normal consolidation within an ongoing bull market. Despite those gains, he added, general investors have yet to return to the sector, leaving room for renewed upside as capital flows back into mining.
Watch the full interview on the Kitco Mining YouTube channel, where David Erfle discusses the Coeur–New Gold merger, Fresnillo’s “criminally low” Probe Gold bid, and why he believes gold’s bull market is still in its early stages.