Mining M&A is gathering momentum as strong commodity prices, competition for quality assets, and concerns about security of supply push miners toward consolidation, lawyers working in this sector say. But regulatory scrutiny and geopolitical risk are increasingly influencing which transactions get done – and how they are structured.
Gold and copper are generating significant activity, while critical minerals are attracting strategic investors and government interest. At the same time, the scarcity of producing assets and the cost and uncertainty of developing new mines are encouraging buyers to consider acquisitions, minority investments, joint ventures and other structures that can provide access to resources while managing development and regulatory risk.
For dealmakers and their legal advisers, that is making transaction planning more complex. Foreign-investment and national-security considerations are moving toward the front end of transactions, while permitting, Indigenous relationships, environmental issues and jurisdictional risk are becoming increasingly important components of due diligence.
Capital markets and securities lawyer Sasa Jarvis, national co-leader of the mining group at McMillan LLP, sees strong momentum in mining M&A. High commodity prices and rising costs are combining with concerns about supply chain security to create what she calls “a really strong economic rationale for consolidation.”
Richard Fridman, partner at Davies Ward Phillips & Vineberg LLP, describes the current mining M&A environment as “frothy,” characterized by fewer but larger transactions and more mega-deals.
He points to Equinox Gold and Orla Mining officially completing their business combination on July 31 for US$5.1 billion, establishing a major North American senior gold producer with an implied market capitalization of roughly US$ 18.5 billion, operating as Equinox Gold Corp.
Strong commodity prices are part of the equation, Fridman says, particularly in precious metals. They can leave producers with stronger balance sheets while boosting share prices, giving companies valuable acquisition currency.
Another fundamental driver is the mining industry's perennial need to replace production.
“The truth of mining is that new resources are becoming more difficult to find, and certainly more difficult to find in lower-risk jurisdictions,” Fridman says.
Miners are acutely aware of their future production and resource profiles, he says. Companies can attempt to replace declining reserves through brownfield exploration around existing operations, but when those efforts fail to produce enough new resources, acquisitions offer another route.
Brian Graves, a partner at Fasken Martineau DuMoulin LLP specializing in mining and metals M&A, says mining companies have long used dealmaking to secure future production, whether a smaller company is seeking its first mine or a major producer is looking to replace depleted reserves.
“M&A is at its essence a shortcut for a company to not have to start from greenfield exploration and build all the way to an advanced project that’s producing,” Graves says, adding that gold and precious metals are probably driving the largest number of transactions in terms of deal volume.
Where a company enters that development cycle can depend on its expertise. A miner skilled in permitting and development may be comfortable acquiring an early-stage project, while another may prefer an operation much closer to production.
Competition for quality assets
Jen Hansen, partner in the capital markets group at Cassels Brock & Blackwell LLP and co-chair of its mining group, says consolidation remains a major theme, with buyers particularly interested in long-life mines and larger-scale deposits in stable jurisdictions.
Good assets are scarce, she says, and buyers may be willing to pay a premium for quality projects that can move the needle. Earlier-stage projects continue to attract interest but also carry greater risks in permitting, development, and execution.
Gold remains a highly active segment of the market, Hansen says, as strong commodity prices and geopolitical uncertainty continue to support M&A in the sector.
High prices, however, can complicate acquisition decisions. Graves says buyers must be mindful of acquiring an asset near the top of a commodity cycle, only to face criticism later if prices decline.
Copper and critical minerals in focus
Copper, meanwhile, has emerged as another major focus of M&A.
Hansen calls it “arguably one of the most sought-after commodities,” reflecting its importance to data centres, electric vehicles and renewable energy. Competition for quality assets is strong, she says, and many major transactions have been copper-driven.
Graves similarly identifies copper as the commodity generating the most activity within the base metals and critical minerals space. He says potential acquirers are showing interest in large copper assets in Latin America, while Chinese buyers remain important participants as they seek long-term supply.
Fridman expects copper M&A to continue, as electrification and demand from AI and data centres bolster the long-term outlook. Increasing demand, coupled with a lack of new supply, he says, has raised concerns about a significant widening of the copper supply deficit by 2035.
Critical minerals more broadly present a somewhat different transaction environment.
Roy Hudson, head of the Canada mining practice at DLA Piper, says Canada has emerged as a premier hub for Western supply chain insulation. “Programs like the G7-backed Critical Minerals Production Alliance have unlocked billions in Western project capital. While the federal government tightened Investment Canada Act reviews to intercept state-backed capital from non-allied nations, this has shifted dealmaking toward domestic and allied-nation buyers.”
McMillan’s Jarvis says supply chain security is increasingly shaping mining investment, as trade disruptions heighten the importance of reliable access to critical minerals. But those same concerns are also producing greater regulatory scrutiny on national-security grounds – and that scrutiny is not new.
She points to the Canadian government forcing divestment of Chinese investments in three lithium issuers in November 2022 under the national security provisions of the Investment Canada Act.
Jarvis’ colleague at McMillan, capital markets partner and Vancouver office management partner Cory Kent, says the push to shore up critical mineral supply chains extends across the United States, Canada, Europe, Australia, Japan and Korea. Governments are supporting selected projects, while investors not traditionally associated with mining, including family offices and private equity, are showing greater interest.
Whether all that investment ultimately results in M&A remains to be seen, Kent says, but the pool of capital interested in critical-minerals mining appears to be broadening.
Fridman sees critical-mineral investment as more explicitly influenced by government policy than traditional precious-metals M&A.
“M&A is very much still happening, but it’s not driven exclusively by economics. It’s driven largely by policy,” he says.
That intersection of policy, geopolitics and investment is becoming difficult to separate from mining dealmaking. Resource nationalism, political instability and changing foreign investment policies can alter an asset's attractiveness regardless of its geological quality.
Canada’s jurisdictional advantage
Kent says country risk profiles ebb and flow as governments and administrations change. Canada nevertheless remains attractive because of the certainty surrounding mineral title, the rule of law and its long history as a mining jurisdiction.
“I do think Canada is viewed favourably,” Kent says.
For Graves, considering those issues is fundamental to advising on a transaction.
“It’s all about assessing risk and managing that risk,” he says.
Hansen points to Canada's geological prospectivity, political stability, established capital markets, and a predictable legal and regulatory regime as reasons why domestic assets attract both Canadian and international buyers.
Jarvis says Canada also compares favourably when investors consider political stability, predictable tax and royalty regimes, the rule of law and enforceability of contracts.
“When you look at that risk versus risks around resource nationalism, rule of law, security conditions that could impact operations and also reputational and ESG risks from working in some high-risk jurisdictions,” she says, Canada remains a significantly more stable and reliable jurisdiction than many places in which miners operate.
But stability does not necessarily mean simplicity.
Permitting remains a significant challenge. Graves says building a mine in Canada is hard work, with lengthy approval processes and a need to navigate Indigenous rights and participation. Jarvis similarly sees permitting and regulatory certainty as important to advancing Canadian projects from exploration to development.
Hansen says treating major mining and infrastructure projects as matters of economic and strategic importance could accelerate development, improve supply chains and attract investment. Improved project economics could, in turn, increase M&A interest and the value of advanced Canadian projects.
DLA Piper’s Hudson says large-dollar capital programs, including Canada’s First and Last Mile Fund and Critical Minerals Infrastructure Fund, are directly funding infrastructure required to commercialize previously isolated mining regions.
“Strategic intervention by the Canada Infrastructure Bank to fund supporting infrastructure reduces upfront capital expenditures for miners, potentially permitting juniors to be M&A targets at an earlier stage than has been the case in recent years.”
He also points to the federal Major Projects Office and provincial equivalents as initiatives expected to accelerate critical-resource projects and supporting infrastructure. While results remain to be seen, Hudson says there is an expectation they could significantly reduce development timelines and uncertainty.
Graves says it is probably too early for major-project initiatives out of Ottawa to have an immediate effect on acquisitions. Still, successful development could help create the conditions for future transactions.
“Project development breathes life into the sector generally, and that would help create the conditions for future M&A,” he says.
Regulatory risk moves upfront
One of the most significant developments mining M&A lawyers are seeing is the extent to which regulatory risk is being considered before transactions are signed.
Hansen says national security and foreign investment considerations have become a routine part of transaction planning and of assessing both risk and timing.
“One of the first threshold questions is: What kind of timeline are we looking at for regulatory approvals, and where are the risks in that?” she says.
Jarvis has also seen clients ask earlier about the Investment Canada Act, the possibility of national security reviews, and Competition Act filing requirements.
Those questions can affect not only whether an acquisition proceeds but also how the transaction agreement allocates risk.
Fridman says parties are paying closer attention to mechanisms such as reverse break fees, efforts covenants and outside dates. Those provisions can allocate some of the consequences if regulatory approval is not obtained, establish what parties must do to seek approvals and provide sufficient time to navigate an extended review.
The increasingly complex risk environment is also broadening the scope of due diligence.
“Environmental compliance, ESG credentials, Indigenous and community relationships, and permitting pathways are all key considerations in today's transaction environment,” Hansen says.
Hudson also sees longer transaction timelines as buyers conduct more rigorous due diligence on land tenure, environmental liabilities, regulatory approval conditions and early-stage Indigenous engagement. Even with government support programs, he says, thorough, early Indigenous consultation remains necessary to avoid or mitigate the risk of legal and regulatory action.
Graves says foreign buyers may also require advice on how Canada's regulatory environment differs from jurisdictions in which they have previously operated. That can require M&A counsel to bring in environmental, Indigenous, tax, financing and other specialists early in a transaction.
Kent says sophisticated buyers are unlikely to sacrifice diligence to move quickly. Senior miners may invest in a junior company first, gain access to information, and follow a project as it develops before deciding whether to make a larger move.
“Serious buyers do their due diligence,” Kent says.
“The role of a lawyer in these types of transactions has become much more advisory,” Fridman says.
Structuring deals to manage risk
Creative transaction structures offer another way of managing risk.
Graves points to joint ventures and strategic partnerships that allow miners to share infrastructure, technical expertise and development risk. Such arrangements can be particularly useful on large projects and when a company enters an unfamiliar jurisdiction and can benefit from a partner with local knowledge.
Fridman similarly sees minority investments and earn-in arrangements as a way for companies to gain exposure to exploration upside without immediately assuming the full risk of an undeveloped asset.
They can also offer a path toward an eventual acquisition. Kent says larger mining companies sometimes establish a foothold by acquiring a minority interest, obtaining investor rights and following the project's development before deciding whether to pursue a takeover.
Valuation differences can require additional creativity.
Hansen says contingent consideration can bridge a gap by providing additional payments upon achievement of future milestones. Royalty structures and joint ventures can also provide alternatives when the parties cannot make a conventional acquisition work.
Fridman says contingent consideration has historically been more workable in private asset transactions than in public-company takeovers. Still, contingent value rights, or CVRs, are starting to bridge that gap on the public side.
CVRs allow target shareholders to share in future upside if certain milestones are met after a transaction closes. In June of this year, Agnico Eagle issued CVRs upon acquiring Rupert Resources, entitling holders to receive up to C$3.00 in cash upon achieving certain mineral reserves and commercial production milestones.
Shares remain an important acquisition currency.
Hansen notes that share consideration is well established in mining M&A, and exchange ratios are heavily negotiated but broadly understood.
Jarvis notes that juniors may rely on stock because they have less cash, whereas senior companies may use a combination of cash and shares.
Kent expects stronger cash positions to result in more cash transactions among senior miners, although share-for-share deals will continue. Share-price volatility can create execution risk during negotiations, he says, giving parties an incentive to compress the period between reaching an agreement and announcing the transaction.
Hudson points out that producers who have seen higher equity valuations recently “are seeking to use those valuations to fund share-based transactions, although targets are becoming increasingly wary of the longevity of those valuations.”
The buyer universe is also evolving.
Strategic mining companies remain the principal acquirers, Hansen says, although private capital is increasingly visible.
Graves sees increased investment from Indigenous and Indigenous-adjacent groups. Traditional private equity can face a structural challenge because mining's lengthy and uncertain development cycle does not always fit neatly within a fund's defined lifespan. Private lending funds, however, can participate in the financing stack as projects approach construction.
Kent also sees family offices and private equity examining opportunities as government attention to mineral security brings new capital into the sector.
For legal advisers, the result is a role that increasingly extends beyond documenting an agreed transaction.
“Clients are looking for advisers who can help them navigate complexity, manage execution risk, identify solutions and create strategic options throughout the process,” Hansen says. “They're not just looking for lawyers to paper the deal.”
Jarvis says mining lawyers also must understand risks that may not be entirely manageable through a contract. Political, regulatory and community considerations must instead be incorporated into transaction and operational decision-making.
Hudson agrees that buyers must “proactively align their transaction structures with national security and Investment Canada Act risk profiles at an early stage.” To bridge valuation gaps caused by volatile market conditions, including trade policy uncertainty, he says clients should consider contingent consideration, earn-outs and adaptive pricing. At the same time, juniors and intermediates should seek strategic co-investments, offtake agreements or joint ventures to reduce completion risk.
With strong commodity prices, scarce high-quality assets, and increasing strategic demand for copper and critical minerals, the lawyers see conditions for continued mining M&A activity.
But geology and valuation alone will not determine which transactions succeed. As regulatory, geopolitical and development risks become more important, buyers and their advisers increasingly need to demonstrate not only why an asset is worth acquiring, but that there is a credible path from signing to closing – and ultimately to production.