$11.5 billion in M&A this summer alone - MJG Capital's Matt Geiger on resource sector momentum

Despite gold hitting several all-time highs, the mood in the junior sector is subdued, said Matt Geiger, managing partner at MJG Capital.

Last week Geiger spoke to Kitco Mining at the 2024 Precious Metals Summit Beaver Creek in Colorado.

Geiger highlighted several major mergers and acquisitions (M&A) over the past six weeks, noting that these deals have generated significant activity in what is typically a quiet period. Major transactions included Filo $4.1 billion acquisition by BHP and Lundin Mining, Gold Fields' $2.1-billion cash bid for Osisko Mining, and First Majestic Silver's acquisition of Gatos Silver for $970 million. All these deals show that the mining sector outlook is improving. Geiger said there was about C$11.5 billion in deals made over the past six weeks, a time of the year that is usually pretty quiet.

"I can only imagine that there's more deals being hatched right now as we speak," said Geiger. "We're really in a hot and heavy...M&A cycle at the moment."

Despite the high metal prices, Geiger noted that the show participants were subdued. Juniors are not seeing much of a lift yet. He did note that there is more money in the sector now.

"I'd say the space...is actually pretty well cashed up," said Geiger. "I think that's one of the arguments in favor of mining stocks, at least over the next six to nine months: they're more cashed up than they've been in many years."

He said that means less financing and more news flow.

"All things equal, those two factors result in higher and higher share prices."

Coverage of the 2024 Precious Metals Summit Beaver Creek in Colorado is sponsored by Newcore Gold.

0:00 - What types of investments are you looking at?
2:12 - What themes or ideas work?
3:27 - What M&A deals work?
9:08 - Valuing projects at higher gold prices
14:26 - Juniors start to recover
16:29 - Better margins at the gold producers with falling oil prices
16:43 - How are going companies going to use that cash?

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