The best gold stories of the year and what to expect in 2022

The promise of higher returns on other assets also coincided with the arrival of covid vaccines, a signal of economic recovery, thus tipping the market towards more risky investments.

As a result, gold prices are trading 4.9% lower year-to-date (as of December 27, 2021), paving the way for its first annual loss in three years.

Still, despite a gleaming year for the yellow metal, 2021 is filled with plenty of gold-related news that investors can digest on the way into the new year.

# 1 billion dollars M & As

Back in January, analysts at Bank of America already predicted that the need to replace gold reserves would be a driving force for more mergers and acquisitions this year. In fact, the gold sector delivered a number of deals, some of which involved the big players.

Agnico Eagle and Kirkland Lake Gold’s C $ 13.5 billion merger to create a new gold giant with a market value of $ 24 billion and 48 million ounces in reserves took headlines.

During a recent symposium hosted by the Canadian Mining Journal, Kirkland Lake CEO Tony Makuch said this is “one of the most important mergers of the Canadian gold sector in recent times.”

However, the Agnico-Kirkland Lake merger announced in September is likely to be “the last grand M & A deal by a major Canadian mining industry.” according to Haywood Securities mining analyst Kerry Smith.

Another fusion of note is Newcrest’s acquisition of Pretium Resources in early November. The price for this $ 2.8 billion trade is the Brucejack property, about 140km from the Australian miner’s majority owned and operated Red Chris mine located in the Golden Triangle of British Columbia.

A month later, Kinross also watched to expand its footprint within another famous gold mining region of Canada – the Red Lake District of Ontario – with its $ 1.4 billion acquisition of Great Bear Resources and its flagship Dixie project.

Aside from any significant development in the last week of 2021, this would be the last significant gold M&A deal of the year.

# 2 Previous offers

Although no billion deal was announced during the first eight months, the impact that some of the former M & As could have on the industry cannot be overlooked.

Agnico already had a lead in January of snap on TMAC Resources after the Canadian government rejected a bid from China’s Shandong Gold for the Nunavut miner. In the same month, Eldorado Gold bought QMX Gold in a friendly merger and thus significantly expanding its land holdings in Quebec.

In March, Newmont moved by to acquire the remaining stake in GT Gold in a C $ 393 million cash trade. This would give the world’s largest gold miner full control of the Tatogga project, which is also located near the Red Chris mine in BC. Also in March Australia’s Evolution Mining took hold Battle North Gold, whose operations are based in Ontario’s Red Lake, for C $ 343 million.

In April, Fortuna Silver Mines announced that it would acquire the West Africa-focused Roxgold for $ 884 million and thus lead its activities beyond Latin America.

Also do not miss the action is AngloGold Ashanti, which offered in July to buy the rest of Corvus Gold for $ 370 million to consolidate its land holdings in Nevada.

# 3 Future mines

2021 also marks a milestone year for some of the world’s upcoming gold mines.

In October, Equinox Gold construction began by its $ 1.23 billion Greenstone project in Ontario, which is slated to become one of Canada’s largest gold mines, producing more than 400,000 ounces annually for the first five years.

Ascot Resources, which develops the Premier Gold project in BC’s Golden Triangle, recently got the green light to begin construction, with first production expected in Q1 2023.

Some mines have also achieved commercial production this year, highlighted by Segilola Mine in Nigeria, the first gold operation ever in the country.

Also read: RANGED: The world’s top 10 largest gold mines

# 4 Overseas Conflicts

Political factors remain a driving force behind a miner’s decision on some gold operations.

In the Dominican Republic, Barrick and Newmont could be forced to end their Pueblo Viejo joint venture without approval of a new tailings bearing.

B2Gold is also at stalemate with the Malian government over an exploration project near the company’s flagship Fekola gold mine.

A new law passed in Kyrgyzstan so too did Canada’s Centerra Gold lose control of its Kumtor mine, which is now the subject of international arbitration proceedings.

In the first half of 2021, the world’s leading gold miners reported a 1.1% drop in production compared to last year due to lower ore grades and mill flow, according to analysis firm GlobalData, although it expects production to increase in the second half of the year to keep production flat for the year.

Gold production was also exacerbated by the covid pandemic, which interrupted many operations. What lockdowns did not affect were emissions caused by gold mining, as shown by a study published by S&P Global Market Intelligence.

On the demand side is World Gold Council believes that there is a noticeable tendency among investors to seek out assets that have previously helped their portfolios, but which are less liquid. The shift to more risky alternatives would pave the way for gold, according to the Council, given that the metal provides the capital and liquidity needed during a market sale.

What awaits in 2022

Still, with rising inflationary pressures and the possibility of more rate hikes, 2022 may manifest a year of improvement for the yellow-colored metal.

Analysts, including those at TD Securities, remain optimistic about a potential gold rally in the first half of 2022.

The outlook for gold in the first quarter of 2022 is optimistic, with the main driving force being inflation, which keeps a bottom level below prices, says Jim Wyckoff, senior analyst at Kitco Metals, lately Reuters report.

(With files from Reuters)

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