Industry Trend Analysis - Gold Sector Outlook To Brighten Up - JULY 2016

BMI View: We have revised up our gold production growth forecasts for Canada in 2016 and 2017, as improving gold prices support project development.

We now expect Canada's gold production growth to average 3.0% in 2016 and 3.5% in 2017, up from previous forecasts of 2.0% and 1.6%, respectively. In terms of volume, we forecast Canada's gold output to climb from 5.3 million ounces (moz) in 2016 to 5.7moz by 2020, averaging 2.2% annual growth. The key reason for our more positive view on Canada's gold production is the improving gold price environment, which we forecast to average USD1,275/oz in 2016 and USD1,350/oz in 2017, up from USD1,160/oz in 2015. Our upward revision is also supported by high-frequency data. For instance, over the first four months of 2016, Canada's gold output increased by 8.0% y-o-y. Furthermore, as of June 21, the number of gold mining investment merger and acquisition deals in Canada totalled 37, a multi-year high.

Teaming Up To Jumpstart Projects

Deal Frenzy
Canada - Gold Mining Investment, Merger & Acquisition Volume (USDmn, LHS) & Deal Count (RHS)
Note: Q2 2016 data accurate as of June 21. Source: Bloomberg

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