Gascoyne Resources continues to achieve exploration milestones at its Dalgaranga gold project in Western Australia, which begs the question: will it become a renewed M&A (mergers and acquisitions) target?
The emerging gold company recently intersected 59m at 12.5 grams per tonne (g/t) from 139m, which included a significant 51g/t hit across 13m, at a newly named ‘Never Never’ lode within Dalgaranga’s Gilbey’s North prospect.
Gascoyne managing director and chief executive officer Simon Lawson didn’t mince his words when explaining Never Never’s potential.
“I have been fortunate to be a part of some great stories in my career, starting with Jubilee Mines and its $3.1 billion takeover by Xstrata through to the genesis of Silver Lake’s Daisy Milano mine and the incredible rise of Northern Star Resources from its origin at the Paulsens gold mine,” he said.
“I have seen some amazing gold and world-class mineralisation, but I have never seen consistent grades and thicknesses come from a new target like this.”
Dalgaranga is also an active operation, producing 71,153 ounces of gold for the 2021–22 financial year (FY22), and has a current mine life until 2027.
Gascoyne has been pursued before, with Westgold Resources making an aggressive play in late 2021, but remained defiant, instead completing a merger with Firefly Resources.
Westgold pitched $0.53 per share for the junior gold miner. Gascoyne closed at $0.34 at close on Tuesday.
Ramelius Resources, which is about six times the size of Gascoyne, also operates in the Murchison region of WA and is no stranger to M&A.
Ramelius completed its acquisition of Apollo Consolidated in January 2022 after locking horns with Gold Road Resources. The company paid $0.62 per share for Apollo.
We’ve seen the recent deal activity of Genesis Minerals and Gold Road, highlighting the gold industry’s continued penchant for M&A and PricewaterhouseCoopers (PwC) Australia partner believes this will only continue going forward.
“When you look at the deals that happened last year, they were really gold-focused … which is partly a consolidation phase,” Upcroft told Australian Resources & Investment. “And we think that consolidation phase will continue over the next few years, both at the large end of the gold sector and also the smaller end.
“When you look at the number of companies focused on gold (deals), it’s an ongoing cycle in terms of the sizing of those groups.
“There’s power in becoming a larger gold company – you’re in a little bit more control of what you do – but then there can also be a lot of extra value that can come from being narrowly focused on a couple of assets.
“So it is (about) getting that balance right across the gold industry.”
As long as M&A activity is up in the gold sector, an emerging success story like Gascoyne Resources will remain ripe for the picking.