The M&A results and in and they are
decidedly mixed in respect of the Canadian mining industry for Q1
2015. Although total M&A transactions and financing was down
worldwide, Canadian companies were the dominant players in those
M&A transactions which did take place during the quarter, and
Canadian companies also had a dominant position in the raising of
capital during Q1.
During the first quarter of 2015, the global mining industry
recorded its lowest number of M&A transactions in many years,
only 14. This represented a drop of 46% compared to the number of
transactions last quarter and a drop in deal value of 58% as
compared to last quarter. On the plus side, however, Canada was by
far the dominant player in Q1, representing both the major acquirer
and the major target by a wide margin, and factoring into five of
the eight top global transactions.
The TSX/S&P Global Gold Index rose for the
first time in three quarters. In total, Canadian companies were
involved in nine transactions valued at over US$50 million, with a
Canadian company functioning as the acquiror in seven of those
transaction. 60% of worldwide deal value, including the largest
single deal, was in the gold industry. This largest gold
transaction, valued at nearly US$1.4 billion, was an all-Canadian
affair, as were the next two largest global gold deals.
The top ten transactions in Q1
2015 featured one transaction from the copper, coal, potash
and uranium industries, respectively, with the latter being an
Based on the above statistics, it cannot be said that
the outlook for the industry in Canada is entirely gloomy.
mining financing in the first quarter of the year still fell
behind the capital raised in 2014 and 2013, not to mention the boom
years of 2007 to 2009. Overall, more than a third of the
capital raised worldwide during the quarter was for Canadian
projects, followed by Latin American projects at 26%, and projects
in Asia/Middle East at 13%.
This represents a significant change over the previous nine
quarters taken as a whole, during which time Canadian mining
companies raised the most capital at US$22.16 billion, but invested
less than a third of it in Canadian based projects.
In terms of the rate of domestic spending by Canadian mining
companies, it is noteworthy that there was an increase from 19% in
2013 to 35% in 2014, and this trend appears to be continuing.
Canadian mining companies remain among the world's leaders for
financing in gold, potash and diamonds. The
Canadian Mining Eye Index fell 1% in the first quarter of 2015,
which compared favourably to the 12% decline from the Q4 2014.
However, the index underperformed the S&P/TSX Composite index,
which was up 2%.
Finally, in Q1 2015 mining sector employers
reported the weakest – and the first negative –
hiring intentions since the sector analysis was first carried out
in the first quarter of 2004. With
numerous large offerings planned, however, it is still possible
for results in the mining sector to turn around and for 2015 to be
a more robust year than the Q1 results suggest.
The author would like to thank Graeme Rotrand, summer
student, for his assistance in preparing this legal
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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