By:Miningweekly

There has been a flurry of activity in recent months, with Gold Fields’ $1.6-billion purchase of Osisko Mining and AngloGold Ashanti’s $2.5-billion acquisition of Centamin. That has sparked speculation over what could be next, with signs that more companies are working to ink deals.

Bullion’s rally and easing cost pressures have made assets more appealing, especially for those seeking to replace aging mines. Yet companies are signaling they’re wary of repeating errors made in a previous bull market when mega expansions left them with big debts and angry shareholders.

At an industry gathering in Colorado Springs this week, executives sought to show discipline by talking up the virtues of cutting debt, controlling costs and rewarding investors than the prospect of more M&A.

“There were some really stupid deals made last time around,” Ross J. Beaty, chairman of Equinox Gold, said in an interview at the Denver Gold Forum. “Companies bought dumb stuff and were penalized for it.”

Equinox itself has drawn interest, receiving takeover offers since starting production at the new Greenstone project in Canada this year, Beaty said. He’s concerned about a hostile approach and warned that the $2.6 billion company is “certainly not for sale.”

There have been other efforts behind the scenes. Top producer Newmont in July said it got dozens of bids for assets it’s selling in North America and Africa, while Osisko said Gold Fields competed against other firms for the company.

Deal appetite has picked up as gold soared to successive records on the outlook for lower US interest rates, central bank buying and haven demand. Inflationary pressures have eased in the past year, helping the industry keep costs in check, make more cash and boost share prices.

Still, ill-fated deals of the past are a reminder of the risks of overspending. After splashing out on big expansions that saddled companies with debt, generalist investors were spooked when the end of a bull run in prices more than a decade ago hurt balance sheets.

To entice investors, miners are trying to show that they won’t make a similar mistake this time.