The world's rich are hoarding gold – this according to data buried in a recent Goldman Sachs note to clients.
In the note published over the weekend, Goldman recommended diversifying long-term bond holdings with gold, citing "fear-driven demand" for the yellow metal.
The Goldman note cited political uncertainty and recession fears as the catalyst for the move toward gold. It also mentioned worries about a wealth tax, increasing interest in Modern Monetary Theory (essentially money-printing) and the current loose central bank monetary policy.
Data buried in the note also revealed that owning physical gold appears to be the preferred method to "hedge against tail events" by the rich.
"Since the end of 2016 the implied build in non-transparent gold investment has been much larger than the build in visible gold ETFs."
Recent deal metrics on average value reserves at ~US$260/oz and production at ~US$3,900/oz. For takeovers the average bid premium is 24%, with Barrick+Randgold's zero percent premium model not lasting.
Most of the M&A activity in the last six months has been focussed on individual asset divestments from the majors
From GMR:
One thing that strikes GMR about the flurry of recent M&A in the gold sector is it highlights a disparity between the market (gold equities are drifting lower) and acquisitive company boards encouraged by a robust gold price. The risk is some boards/management may feel they have missed out or have been leapfrogged by peers, further driving M&A activity into 2020. GMR feels a bad sense of déjà vu.... or is it just us?
The Gold M&A Disparity
In the last 18 months there has been some +US$25B of M&A activity in the gold sector. While the large mergers of Newmont+Goldcorp and Barrick+Randgold occurred early in this cycle, the number of deals has dramatically picked up over the last month. Recent activity includes Evolution's acquisition of Red Lake, Saracen's acquisition of 50% of KCGM, Zijin's bid for Continental and Kirkland's bid for Detour. Notably, recent deal metrics on average value reserves at ~US$260/oz and production at ~US$3,900/oz. For takeovers the average bid premium is 24%, with Barrick+Randgold's zero percent premium model not lasting. Most of the M&A activity in the last six months has been focussed on individual asset divestments from the majors (e.g. Red Lake and 50% of KCGM) or single asset businesses. The following table ranks the top gold equities by market capitalisation, 2019 production guidance, reserves and notional mine life on 2019 production. Stocks marked in blue have been involved in M&A in 2019.
Significantly, three of the relatively small number of single asset companies have received bids/approaches in the last month highlighting where corporate interest is currently focused.
CRU: China Plans to Come from Behind to Win the Global Battery Recycling Industry, Thanks to New Policies
LONDON, Dec. 2, 2019
/PRNewswire/ -- Lithium-ion battery (LIB) recycling is hardly new in
the developed world, with notable industry players and well-established
regulations in place to process the countless 3-cell batteries reaching
the scrap-heap each day from portable electronics.
However,
the lack of explicit regulations (EU excluded) and integral recycling
networks for the nascent secondary market of electric vehicle (xEV)
batteries means that the playing field has once again been levelled; and China is positioning itself to capitalize on the opportunity.
Are proper regulations in place in China?
China is the world's largest
consumer of xEVs, representing 30% of global sales in 2018, and this
share is expected to double by 2030.
