There were considerably more mining project and company acquisitions announced in the first half of 2014 compared with the same period in 2013, although the averages of price paid and value of acquired commodities per deal were lower, SNL Metals & Mining data shows.

The upswing in merger and acquisition (M&A) activity compared with a year ago suggests that a long period of low project valuations combined with strategic (or forced) portfolio divestitures is tempting buyers back into the market.

At the end of the first half of 2014, there were 56 percent more completed and pending metals and mining transactions than in the year-ago half, rising to 117 deals from 75 year over year. However, the total price paid in the first half of 2014 was only 15 percent higher than a year earlier, and the value of all commodities acquired was 21 percent lower. The average price paid per transaction was US$113 million, compared with $153 million in the first half of 2013, while the average value acquired per deal sank to $4.55 billion from $8.99 billion year over year. There were four deals with prices of at least $1 billion in the half year, compared with three in the 2013 half, and 12 deals with values between $100 million and $999 million, compared with 14 in the prior year half, SNL Metals & Mining reported.

In terms of primary commodities acquired, the biggest change year on year was in early-stage gold deals. There were only two gold project purchases without resources or reserves in the first half of 2013, whereas there were 32 early-stage gold deals in this year's first half. All told, there were 75 gold deals in the first half, up from 37 a year ago.

This suggests that companies have been shedding their noncore gold projects at a high rate, and that companies with sufficient capital are snapping them up — buyers are taking advantage of low project valuations to enhance their long-term pipelines or to acquire properties near their existing mines and projects. The renewed interest in early-stage projects could also presage an increase in new gold discoveries, as the buyers begin exploring what were likely dormant projects under their previous owners. The largest gold deal during the 2014 half-year period was far and away Yamana Gold Inc. and Agnico Eagle Mines Ltd.'s acquisition of Osisko Mining Corp. in April, after swooping in with a white knight bid to counter Goldcorp Inc.'s hostile takeover attempts. Yamana and Agnico Eagle paid $3.49 billion for Osisko's $28.46 billion of gold in reserves and resources — mostly held by its Canadian Malartic Mine in Quebec.

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