Billion-dollar takeovers in the gold sector
Market Developments
After the correction in March, the fund recovered in April (+4.68%) and ended the month with a NAV of 120.16. This brings the YTD return to 6.16% and assets under management to €216 million. The April performance was mainly driven by the acquisition of two of our core positions (G2 and Rupert) by producers. Both companies are responsible for major gold discoveries. The performance in May is currently slightly positive (+2.3%).
The fund’s performance over the past month was remarkably strong, especially given that gold declined by 2% and the gold producers ETF, VanEck Gold Miners ETF, lost 4% in value. The main driver was the continued situation surrounding Iran and the Strait of Hormuz. When a ceasefire in the Middle East was announced on April 8, oil prices fell by 30% over the next 10 days. This led to lower inflation expectations and, consequently, lower interest rate expectations. However, when the US announced blockades and escort missions in mid-April, Iran responded by once again closing the Strait of Hormuz. Oil prices subsequently surged back above $110 per barrel. Gold moved inversely once again, ending the month in negative territory.
In addition to oil (+8%), copper also performed strongly (+6%). In the copper market, the ongoing supply shock continues to drive structural shortages. Morgan Stanley expects the largest copper deficits in 22 years by 2026, with shortages projected to grow even further in the years ahead. This view is reinforced by reports from companies such as Freeport-McMoRan, which drastically lowered production guidance for Grasberg, the world’s second-largest copper mine. Grasberg was hit by a major landslide last year, severely disrupting production for an extended period. Sulfuric acid shortages resulting from the Gulf conflict pose an additional threat to global copper production.
Lithium is also attracting attention. Prices in China rose to 175,000 Chinese renminbi (CNY) per ton (approximately $25,000). Following the prolonged correction, which bottomed out at 60,000 CNY in mid-2025, prices have now tripled. This development is being driven by rising demand for new EVs amid higher oil prices, which have made fuel significantly more expensive. Lithium demand is expected to increase sharply over the next decade, leading to expectations of structural supply deficits in this market as well.
An increasing number of major banks are issuing highly positive recommendations regarding investments in commodities. According to Bank of America, the “surge in commodities” could continue for years. In addition, Deutsche Bank released a particularly striking publication hinting at a possible return of gold to the monetary system. The report outlines several scenarios in which central bank demand for gold could push prices to between $8,000 and $14,000.
Last month, two core positions were acquired. This highlights the resurgence of M&A activity in the mining sector. Agnico Eagle Mines Limited is consolidating the so-called Greenstone Belt in Northern Finland. As the world’s second-largest gold producer, Agnico had maintained a conservative strategy for a long time, but with these acquisitions, the company is stepping firmly back into the spotlight. The company is paying C$2.9 billion for Rupert Resources, which is developing the Ikkari gold project, and C$482 million for the neighbouring Helmi discovery owned by Aurion Resources. We had long viewed the combination of Ikkari and Helmi as essential for the project’s eventual development, and these assets are now being acquired at a substantial premium by a major producer already operating extensively in the region.
Another remarkable acquisition comes from G Mining Ventures. The company is acquiring G2 Goldfields for nearly C$3 billion, creating a tier-1 project in Guyana by combining the adjacent Oko-Ghanie deposit with Oko West. Combined production could exceed 500,000 ounces of gold annually, with significant synergies and cost savings. We discussed this in more detail in our latest case study. Investment fund La Mancha, which manages approximately $3 billion in mining investments, expanded its stake in G Mining to 19.9% in March through an additional $300 million investment. Further along in Guyana, Omai Gold Mines expanded the resource base of the Wenot and Gilt Creek gold deposits to 8 million ounces. A preliminary economic assessment (PEA) is also expected in the coming months, which could make Omai Gold a logical next takeover candidate.
Such new discoveries and development projects are essential to close — or at least slow — the growing shortages across a range of metals. In the copper market, much attention is focused on NGEx Minerals, which continues to publish impressive drill results almost monthly. In April, the company intersected dozens of meters grading more than 7% copper equivalent at the Lunahuasi project in Argentina. That's why it was clear for our fund managers that NGEx deserves the CDFund Discovery Award this year, which was awarded uring a mining conference in Henderson (Nevada). Read more about the winner here.
