Halifax, Nova Scotia, 12 May 2011

The 2010 dollar volume of large ($25m minimum) acquisitions totaled $50.7 billion – the third-highest annual total in ten years – a whopping increase of 260% over 2009’s $14 billion, and 23% over 2008’s $41 billion.

According to Metals Economics Group’s (MEG) recent Strategic Report, the 2010 total signifies a general return of confidence to the industry after a period of significant strategic retrenchment and caution due to the worldwide recession and sharply lower metals prices that began in late 2008 and lasted into early 2010.

Data analyzed from MEG’s Acquisitions Service shows a very significant rebound in both base metals and gold acquisitions spending. The total price paid in base metals deals (copper, nickel, and zinc) increased 220% to $21.8 billion in 2010 (43% of the year’s total), and gold jumped 298% year on year to a historical high of $28.9 billion (57% of the 2010 total).

Figure 1:  Base Metals and Gold Acquisitions Dollar Volume, 2001-2010

Distribution of the 66 base metals acquisitions targets considered in 2010 (Figure 2) is almost even among all regions; however, Africa dropped from 22% of 2009’s total acquired base metals in-situ value to 7% in 2010. The acquired value of reserves and resources in 2010 base metals transactions totaled $668.4 billion, with copper company and project acquisitions accounting for $371.4 billion of the total. Each region, except for Europe, hosted at least one very large deal in terms of in-situ value.

Of the 60 primary gold transactions (Figure 3), the Australia-Pacific region was tops with ten deals containing $75 billion of in-situ value—33% of the $222.7 billion gold total. It was followed closely by North America (mostly Canada) with 11 transactions accounting for 31% of the total.

The price paid as a percentage of in-situ value in 2010 averaged 13% for the 60 gold deals—a 71% increase over 2009. The most expensive region for gold acquisitions was Africa at 26.9%. The least-expensive region for acquiring gold in the ground was North America, with prices averaging only 3% of in-situ value.

MEG’s Acquisitions Service gives clients a competitive edge by reporting and analyzing current and historical transactions involving advanced-stage base metals and gold projects, operating mines, and companies.

Ends --

For more details on MEG services and for subscription information visit the MEG website:

www.metalseconomics.com