Gold mining stocks in takeover fever! Barrick Mining and Newmont are selling! B2Gold neighbor Desert Gold in the crosshairs?

Barrick and Newmont with billion-dollar deals

A billion-dollar deal at Barrick Mining. The investor favorite has announced plans to sell its long-established Hemlo Gold mine in Ontario, Canada, for up to USD 1.09 billion. The buyer is Carcetti Capital, which, in turn, is being supported by Wheaton Precious Metals in financing the transaction.

Hemlo is one of Canada's best-known gold mines and has a production history spanning more than 30 years. Since its opening in the mid-1980s, the mine has produced more than 20 million ounces of gold and has long been considered one of the most important assets in Barrick's portfolio. In recent years, however, production costs at Hemlo have risen significantly as near-surface deposits have been largely exhausted, requiring a shift to more complex and capital-intensive underground mining. The planned sale to Carcetti Capital will provide Barrick with greater flexibility to reallocate capital toward higher-return projects. Meanwhile, the new owner will have the opportunity to exploit the mine's remaining resources and modernization potential.

Newmont is also currently on the selling side. The Company is divesting selected mines to free up capital for other projects. Earlier this month, the Company announced the sale of the Akyem Gold mine in Ghana to Zijin Mining for approximately USD 1 billion. Akyem is one of the largest open-pit gold mines in the country. Since production began in 2013, it has produced several million ounces of gold and is considered an important project with a long remaining life. The buyer, Zijin Mining, is a Chinese mining group with global operations in gold, copper and lithium, which is further expanding its presence in Africa with the acquisition and gaining access to a stable producing asset. The sale of the Porcupine complex in Canada will bring a further USD 425 million into Newmont's coffers.

Desert Gold: New partner or buyer?

With the takeover fever, Desert Gold is also likely to return to the radar of potential buyers and investors. The exploration company's share price has been trading sideways between EUR 0.04 and EUR 0.05 for months. However, there have been several operational developments in recent months. Analysts at GBC Research see great potential and recommend the stock as a "Buy" with a price target of CAD 0.43.

With the acquisition of a 90% stake in the Tiegba Gold project in Côte d'Ivoire, Desert Gold has added a second exciting project to its portfolio. In recent years, the country has developed into one of the most stable and investor-friendly mining regions in West Africa. Tiegba covers an area of 297 km², of which only 20% of the concession area has been explored in detail so far, leaving significant untapped potential. At the heart of the project lies a gold-in-soil anomaly measuring 4.2 km in length and 2.1 km in width. Historical sampling returned results ranging from 50 to over 200 ppb of gold. Further exploration is expected to begin soon to determine the depth and scale of the gold deposit.

There may soon be news from Desert Gold's flagship project in Mali as well. Perhaps a financially strong partner will be announced, or the entire project will be sold? The SMSZ project currently holds a gold resource totaling 1.1 million ounces. However, only five of the more than 30 known gold zones have been included in the estimate so far. In August, the first Preliminary Economic Assessment (PEA) delivered convincing results, based on a conservative gold price of only USD 2,500 per ounce. Gold production could begin as early as next year.

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Further small-scale acquisitions

Desert Gold would represent a smaller acquisition. There is activity in this segment as well. For instance, New Found Gold has announced the acquisition of Maritime Resources for CAD 292 million. This merger creates a promising exploration company in Newfoundland, which could evolve into a Canadian gold producer in the medium term.

Gold price outlook: What will the Fed do?

It was another strong week for the gold price. The spot price was last at around USD 3,650 per troy ounce. This means that gold has risen in price for four consecutive weeks. Analysts have also contributed to this, with some significantly raising their price forecasts. UBS believes the precious metal will reach a price of USD 3,800 per ounce by the end of this year. Overall, gold is currently benefiting from geopolitical tensions, expectations of falling interest rates, and a weaker US dollar.

This week, attention is focused primarily on the upcoming Fed meeting. Investors are speculating that the US Federal Reserve will initiate the next interest rate move in view of weaker economic data and easing inflationary pressure. An interest rate cut appears largely priced in, so any deviation from a 25-basis-point adjustment could surprise the market. The direction and magnitude of further rate moves will likely be a key driver for gold prices going forward.

Desert Gold currently offers an exciting opportunity in the gold sector. The addition of a promising second project in Côte d'Ivoire strengthens its portfolio, while increased activity is expected soon in Mali. Meanwhile, industry giants Barrick and Newmont have filled their coffers and could soon fuel another wave of takeover activity as buyers.