The volume of Canadian mining deals rose in 2016, and the trend is expected to continue into 2017, but the value of these deals remained flat in 2016, as smaller deals replaced mega mergers
TORONTO—After an increase in the amount of mining deals in 2016, the trend is expected to continue in 2017 but deal values won’t keep pace.
According to Ernst and Young’s (EY) Quarterly Report on Mineral Mergers, mining deal volume ticked up by 16 per cent in 2016, from 132 to 153 deals. Canadian deal value, however, remained virtually unchanged, falling by one per cent year-over-year to just over US$6 billion in 2016.
“There’s a move away from the mega deals that we saw during the last cycle,” said Michelle Grant, EY’s B.C. Mining and Metals transactions leader. “In 2016, one deal was valued at over $1 billion and several deals were greater than or equal to $0.5 billion. We expect the trend of more, but smaller deals to continue in 2017.”
Grant continued, “Key deal drivers in 2016 included diversification, balance sheet strengthening through business combinations and investment in exploration initiatives through acquisition of junior exploration companies.”
Looking back on 2016
“In 2017, we expect a more positive industry outlook and access to capital, leading to an improvement in transaction activity this year,” Grant said.
Looking ahead to 2017 trends