Gold’s rally has been evident in the increasing number of mergers and acquisitions in the metal mining industry over the past year. This trend could continue for the foreseeable future, given the strength of gold prices while copper isn’t too far behind.
S&P Global highlighted the number of M&A deals in metal mining last year. Gold is head and shoulders above its peers, while copper isn’t too far behind. M&A activity is a sign of a thriving industry. Given gold’s price spike the past year, it’s easy to see why. Global uncertainty during a volatile market year could help gold’s case for the rest of the year, according to S&P.
Copper’s electrical conductivity properties also make it a hot commodity as the world becomes more heavily reliant on electrical energy. The growth of artificial intelligence and other related disruptive technologies will require more electrical energy, resulting in increased demand for copper.
“With a total deal value reaching $26.54 billion across 62 deals that fit our criteria for this study, the transactions resulted in the turnover of 192.5 million ounces of gold and a combined 29.8 million metric tons of copper, nickel and zinc in reserves and resources,” S&P mentioned, noting that uncertainties in the current geopolitical landscape “will likely drive M&A activity in 2025, with gold and copper anticipated to remain strong focal points amid rising metal prices.”
Mining Opportunities in Gold
With the number of M&A deals forecasted to increase in gold and copper mining, consider four funds from Sprott. Sprott tailors each fund for broad market exposure or for more volatility-tolerant advisors, small-cap exposure.
The first pair to consider is the Sprott Gold Miners ETF (SGDM) and the Sprott Junior Gold Miners ETF (SGDJ). For a diversified approach to gold mining exposure, SGDM is ideal. It seeks investment results that correspond generally to the performance of the Solactive Gold Miners Custom Factors Index. This index tracks the performance of large gold companies found on Canadian and major U.S. exchanges, adding diversified exposure.
Investors who don’t mind the volatility in exchange for the growth potential of small-cap companies will appreciate SGDJ. It tracks the Solactive Junior Gold Miners Custom Factors Index, which follows the performance of the small-cap precious metal companies, allowing for greater growth potential.
Copper Mining Opportunities
The same broad and small cap dynamic is available in the copper mining industry, with the Sprott Copper Miners ETF (COPP) and the Sprott Junior Copper Miners ETF (COPJ). COPP tracks the Nasdaq Sprott Copper Miners Index (NSCOPP), which includes producers, developers, and explorers that support the copper mining industry. For diversification, COPP provides blanket exposure by focusing on large-, mid, and small-cap mining companies. On the other hand, COPJ tracks the total return performance of the Nasdaq Sprott Junior Copper Miners Index. The index incorporates mid, small-, and microcap companies entrenched in copper-mining-related businesses, offering exposure to equities with high growth potential.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index. Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
