Gold Mining: A New “Super-Major”?
By Joe Foster, Portfolio Manager and Strategist
A major deal was announced on September 28 that, once approved by shareholders, will combine Kirkland Lake with Agnico Eagle Mines to create the world’s third largest gold company. Barrick and Newmont are already recognized as super-majors and industry leaders.
At 3.5 million ounces per year, the new Agnico does not rise to the level of a super-major producing five to six million ounces per year. However, other attributes enable Agnico to enter the big league. The merger sets it apart from other majors in terms of production: its costs are expected to be lower than the super-majors’ and it has the lowest geopolitical risk, with 75% of production coming from Canada and the remainder from Finland, Australia and Mexico.
MVIS Global Junior Gold Miners Index
Source: MV Index Solutions. All values are rebased to 1,000. Data as of 31 October 2021.
Joe Foster has been Portfolio Manager for the VanEck International Investors Gold Fund since 1998 and the VanEck – Global Gold UCITS Fund since 2012. Mr. Foster, an acknowledged authority on gold, has over 10 years of dedicated experience in geology and mining including as a gold geologist in Nevada. He has appeared in The Wall Street Journal, Financial Times, Barron's, and on Reuters, CNBC and Bloomberg TV. Mr. Foster has also published articles in a number of mining journals, including Mining Engineering and Geological Society of Nevada.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.