Overall uptick in M&A activity and equity/debt financing,
especially for gold, silver and copper companies; recent movement
also seen in iron ore and coal.
Increased variety in deal making and finance — joint
ventures, convertible debt, high-yield debt, strategic
partnerships, off-take arrangements.
More cherry picking of specific assets as opposed to
Greater activity in commodity streaming (Silver Wheaton, Gold
Wheaton) and royalty companies (Royal Gold's acquisition of
International Royalty Corporation).
Return to share-for-share transactions as opposed to cash-only
International investment interest continues to rise —
particularly from China, India and Brazil.
Increased shareholder activism and proxy fights (Chariot
Resources, Rockwell Diamonds).
McCarthy Tétrault's Mining Group observes the
following industry challenges, opportunities and trends through the
balance of 2010:
Inbound Investment — Eye on Asia
Over the last 12 months, greatly increased interest in Canadian
resource companies and assets from Asian investors, particularly
Chinese SOEs and private investors. Chinese inbound investment was
$4.5 billion in 2009 and exceeds $7 billion so far in 2010.
China Investment Corp. invested $1.74 billion to acquire 17% of
Wuhan Iron & Steel Corp. made a $240-million strategic
investment in Consolidated Thompson Iron Mines and a joint venture
in Bloom Lake project; and
Jilin Jien Nickel Industry Co. made a $192-million joint
hostile bid for Canadian Royalties.
Strong interest in Anglo American's metallurgical coal
assets in British Columbia (auction process underway) and steel and
grinding media businesses in Alberta and British Columbia.
Canadian junior and mid-cap mining companies have diverse
assets internationally; many remain vulnerable to cash-rich
Increased willingness to consider greenfield developments and
exploration projects (recent staking activity in Saskatchewan
Some Canadian mining companies operating in Asia (such as
SouthGobi Energy Resources) are eyeing Hong Kong Stock Exchange
Partial rebound of commodities sector.
Material difficulties reaching consensus valuations of mining
Deterioration in deposit quality, and narrowing production
pipeline exacerbated by mine closings as a result of the economic
Infrastructure access, combined with equipment and skills
Concerns over operating in high-risk jurisdictions.
Securing and maintaining the social licence to operate,
including Aboriginal and environmental concerns.
Regulatory Developments to Watch
Investment Canada Act thresholds for review of M&A
transactions generally raised to $600 million, but full
implications of new national security test for foreign investment
and guidelines for investments by SOEs still being assessed.
Role of "poison pills" in Canadian take-over bids
— securities commissions appear divided as to whether
shareholder approval of a poison pill after a hostile bid has been
made will be allowed to defeat the bid.
Changes to TSX rules require shareholder approval of materially
dilutive share exchange transactions — may partially
arrest retreat from all-cash deals.
The US approach to energy policy and climate change
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).