The number of major company investments in early-stage exploration through project earn-ins and purchases, and junior company acquisitions and financings fell to a seven-year low in 2022.
Gold favored target despite lackluster investment
Despite the high market price for gold — on par with 2021 — exploration investment for gold fell considerably in 2022, following the overall trend in the majors' early-stage investment. The yellow metal nevertheless remained the favored target, accounting for more than half of the number of transactions and two-thirds of the financings.
Unsurprisingly, the highest-valued financing and acquisition were both for gold.
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Major early-stage exploration investment in acquisitions and financings was lackluster in 2022, with the number of transactions halving year over year
to just 67 — including 38 deals and 29 financings, compared with 60 and 63, respectively, in 2021. The total was a seven-year low.
The majors favored project deals over company deals; in the five transactions involving purchases of equity in companies, three targeted gold, one lithium and one silver.
Copper transactions up on looming threat of near-term market deficit
In contrast with the trend for gold, the number of copper exploration-stage transactions involving majors increased year over year, to 17 from 13, reflecting the heightened need to find new deposits of the red metal.
Among metals and mining industry deals with a minimum value of $10 million and 1 million ounces of gold or 100,000 metric tons of base metal in acquired reserves and resources, more money was spent on copper assets in fewer transactions than for gold. Meanwhile, exploration budgets for copper were at a nine-year high in 2022, driven by a 67% year-over-year increase by junior explorers.
North America still hosts over 50% of target assets
The geographical distribution of exploration assets acquired by majors in 2022 was fairly similar year over year. Canada-US led the regions with 55% of all targets, a slight decrease from the 59% share in 2021. With the number of investments in the US holding steady at 11 since 2019, the year-over-year decrease in the number of transactions in the region resulted in the US share jumping to 30% from 15% while Canada's share dropped to 70% from 85%.
Elsewhere, Asia-Pacific remained a distant second, followed by Latin America — a ranking the region has held for three consecutive years. Africa had a slight increase in 2022 at the expense of Europe.
See the whole report from S&P Global Intelligence here:
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