25/03/2025: The Money of Mine podcast today was a great listen - with JD providing a good overview of his list of the worst acquisitions by ASX-listed mining companies in the last 30 years. Obviously BHP & RIO are in the mix, and Newcrest's Lihir acquisition was to be expected, but one I didn't see coming was St Barbara (SBM) buying Atlantic Gold with their multiple gold projects in Nova Scotia, Canada. I was holding SBM at the time and arguing that if things went as planned for them, Bob Vassie had made a reasonable move by acquiring Atlantic. Well, I was dead wrong and I lost money on SBM in the process. Nothing went right for them and now SBM are trying to offload those Atlantic assets for a fraction of what they paid for them, and in the meantime the only gold mine and mill they got running there along Moose River in Nova Scotia (Touquoy) - it was actually already running when they bought Atlantic - has been shut down after being mined out and then running out of tailings storage facility (TSF) capacity while still processing stockpiled ore.
SBM failed to obtain permission to convert the Touquoy open pit into a TSF, so were forced to stop production early. They have also failed to progress any of their other three Moose River gold projects due to increased efforts by locals and the Nova Scotia government to protect the wilderness area along Moose River from mining, particularly open pit mining. A clear case of an ASX company with an Australian head office failing to read the room in the country that their "growth projects" are located. This wasn't like RRL's McPhillamys GP in central west NSW farmland, with a federal Minister pulling the rug from under them with zero notice, this is along a proper river in Nova Scotia that has recreational uses (camping, kayaking, etc.) and is in pristine natural wilderness and forests.
The idea that they might encounter some pushback on new mine permitting should have crossed their minds at some point along the journey, before it actually happened. And it should have ocurred to me too. Mistakes were made. Lessons were learned, at my end anyway.
The only good thing to come out of it for me was that when Genesis (GMD) bought all of SBM's decent assets, which SBM were forced to sell to stay solvent - as they would have breached lending covenants otherwise and may well have been placed into Administration, those decent assets being their Australian assets around Leonora in WA, I jumped on the Genesis train at that point and that's been a very nice ride. SBM issued GMD shares to me as part of that transaction, and I bought a heap more GMD myself. I have made more on GMD than I lost on SBM, but any loss of capital is regrettable, and JD breaks down how it all went so horribly wrong for SBM.
And that was the 2nd worst one. What do you reckon made #1?
BTW, FWIW, Bob Vassie, the MD of SBM at the time of the Atlantic Gold acquisition retired soon after that deal settled, and everything began to unwind for SBM soon after that. Bob later turned up as the new Chairman of Ramelius Resources (RMS), which I hold now, and Bob's still the Chairman there. So far Ramelius haven't appeared to make any similar mistakes to SBM's Atlantic debacle, but then just last week RMS did announce a takeover of Spartan Resources (SPR) who have a lot of gold and a decent capacity gold mill north of RMS' operations in WA, and some have suggested they might be overpaying. I have already reduced my RMS positions and bought into SPR as I think it's often better to hold the target company than the potential acquirer when it looks fairly certain that the deal will go through in the absence of a superior offer, i.e. the downside is limited. The potential upside is if somebody else comes over the top and trumps RMS' offer, and then RMS either match that or go higher, or else the third party gets the chocolates instead of Ramelius. Either way I see little downside in owning SPR shares here while I am able to buy them for less than the implied offer price from RMS.
Along similar lines, I have reduced my Northern Star (NST) positions since they made that huge $5 Billion bid for De Grey Mining (DEG) that was announced on December 2nd - almost 4 months ago - and I did build up a position in DEG at prices below NST's implied offer price and have since taken profits on that (sold out of DEG completely) when the DEG SP went up to around 10 cps above the implied offer price from NST - I had already sold out of DEG at lower levels here on SM, but still at a profit. There is always the risk of these deals collapsing and the target company's SP falling back to pre-bid levels or lower, but I consider that possibility to be very slim with both the SPR and the DEG takeovers because there are so few conditions that could enable the acquirers to back out, other than the usual superior offer from a third party clauses.
Anyway, here's the podcast:
The 5 Most Destructive Deals in Mining History
Money of Mine 
March 25th, 2025
Show notes:
Today’s show is a bit different.
We thought we’d give ourselves a history lesson and explore the costliest M&A mistakes in our industry.
Our aim was to understand what went wrong, why things went south and what mining companies and investors alike can learn so that we allocate capital better going forward.
CHAPTERS
0:00:00 Introduction
0:01:53 What's the criteria?
0:04:08 How were the deals ranked
0:05:47 Deal 5: An Island Adventure
0:18:55 Deal 4: Wanna be a Copper Champ
0:35:16 Deal 3: Don't Worry, We've Done the DD
0:50:35 Deal 2: In a Land Far Far Away…
1:05:33 Deal 1: Commodities are Higher Forever, Right?
1:18:41 What are THE lessons to learn
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Source: https://www.youtube.com/watch?v=nW8C3kU-ZSw