Our Perth team recently co-hosted the 2025 Mines, Markets & M&A Forum with BDO and Vector Advisors at which a range of industry experts explored the latest trends in public M&A in Australia.
Need to know:
- Despite global volatility, investors remain confident in the outlook for Australia’s resource sector, with sustained capital raising and significant M&A activity.
- Innovative deal structures are increasingly being used in public M&A transactions to bridge valuation gaps.
- Alternative financing solutions are gaining traction but require careful structuring due to accounting complexities and regulatory compliance.
- Strong interest and strategic timing in commodities such as gold, copper, lithium, silver and critical minerals are shaping investment decisions and M&A strategies.
- Enhanced due diligence processes addressing ESG, native title and foreign jurisdictional risks have become critical to seamless and successful M&A transactions.
- Companies increasingly prefer acquisitions over exploration to rapidly scale operations and secure resources on the ground.
- Shareholder activism is on the rise, significantly impacting transaction outcomes and necessitating proactive investor engagement and communications.
- Positive IPO market developments include increased dual-listing activity from Canadian TSX-V companies migrating to the ASX, reflecting confidence in Australia’s market resilience.
Forum highlights
ASX update: sustained resource sector dominance and regulatory clarity
Dale Allen from ASX’s Listings Compliance delivered an update on the prominence of the mining and resource sectors within the Australian market.
Dale highlighted that nearly half of all ASX-listed entities operate in these sectors, a testament to Australia’s strong positioning as the primary location for resource financing.
Notably, despite market volatility, Dale observed that resource companies remain resilient in their ability to access secondary capital. Recent equity and debt raisings, particularly during July’s turbulent period, demonstrated sustained investor appetite.
Dale also emphasised upcoming regulatory changes that are crucial for market participants:
- New approach to disclosure of waivers by listed entities (effective September 2025): ASX will standardise its approach so that listed entities will be required to disclose the nature and effect of any waiver that has been granted to them and their reasons for seeking the waiver, as a normal condition.
- Trading halts and voluntary suspensions: To protect market integrity, companies must proactively plan trading halts and clearly justify suspensions.
Alternative consideration in Public M&A: bridging the value gap
Hamilton Locke Corporate M&A Partner, James Nicholls shared valuable insights into alternative forms of consideration that are being increasingly used in public M&A transactions. James explained that innovative consideration structures help bridge valuation gaps, particularly relevant in an uncertain economic environment and volatile market.
James discussed the following key forms of alternative consideration and noted that the deployment of special dividends is highly unusual in public M&A mining transactions:
- Contingent consideration, including Variable Base Consideration (VBC) and Contingent Value Rights (CVR) and how this form of consideration can help to value and capture the upsides and downsides of pre-production mining projects.
- Stub equity structural and commercial developments and circumstances in which such alternative consideration may assist acquirers of mining companies.
- Demerger scrip, in particular, the continuing prevalence of such offerings in the mining sector notwithstanding the formal revision to ATO’s demerger tax rules in 2018.
Financing the mining transition: robust Australian resilience amid global decline
BDO Deal Advisory Partner Ashton Lombardo spoke to attendees on the evolving financing landscapes within the Australian resource market.
Ashton detailed alternative financing methods gaining traction:
- Reserve-based lending: Directly linked to asset performance, offering flexibility but sensitivity to reserve quality.
- Project financing: Non-recourse structures isolating parent company risk, though costly and restrictive.
- Royalty financing: Non-dilutive capital with upfront funding offset by operational premiums and high costs.
- Streaming arrangements: Upfront capital exchanged for future production, popular but complex in accounting terms.
Ashton emphasised the strategic role of accurate financial classification under IFRS and ASX regulations: noting that correct accounting treatments and robust funding disclosures are pivotal to successful deals, particularly referencing ASIC guidelines in relation to funding assumptions for Independent Expert Reports.
M&A panel discussion: tips, tricks and tactics
The highlight of the event was the panel discussion hosted by John Gardner, featuring David Southam, Rob Gray, Sarah Standish, Deanna Carpenter, Adam Myers and Shaun Duffy. Talking to the theme “Tips, Tricks and Tactics”, our panellists shared exclusive insights into navigating the ever-evolving M&A deal landscape in today’s markets.
Market conditions and opportunities
A range of factors including inflation, policy shifts (such as the Trump-era tariffs), and broader global economic uncertainties are contributing to market turbulence. Our panellists observed that while these factors may have short-term impacts, they are unlikely to have major long-term knock-on effects.
The panel observed that there are increased opportunities within certain commodity markets, notably gold, copper, lithium, silver and critical minerals, with gold positioned optimally within its market cycle. Lithium remained bullish, with timing critical for success. David Southam was keen to point out the opportunity in the Canadian resource sector in terms of silver investments.
Strategic shifts toward M&A
There was consensus on the shift towards acquisition-driven growth, with companies opting to acquire established resources and entities (“ounces by acquisition”) rather than undertake exploration projects.
This trend is particularly evident among smaller companies seeking scale rapidly through M&A rather than exploration. The panel also highlighted the growing trend of Canadian and Australian resource entities seeking to make use of the African resources market.
Regulatory landscape and due diligence
Tighter regulation has put greater emphasis on the need for robust, multi-dimensional due diligence beyond traditional financial due diligence. Sarah Standish and Deanna Carpenter highlighted the growing importance of ESG, native title issues, and cross-border regulatory compliance in M&A due diligence. Incorporating conditions precedent, including foreign regulatory approvals and ‘leak clauses’, was advised to manage transactional risk effectively.
The panel emphasised that early engagement with advisers and rigorous planning significantly enhance transaction success and regulatory compliance.
Practical deal considerations
Experienced non-executive directors emerged as valuable assets for their strategic oversight, risk management, and ability to bridge gaps during complex negotiations. Panellists urged organisations to foster strong internal ‘war rooms’ for proactive strategic planning and recommended rigorous internal questioning on asset valuation, as well as conducting effective reviews of executive benefit agreements, performance rights on issues and potential change of control provisions.
IPO and listing trends
BDO’s Adam Myers noted the positive signs emerging from the IPO market, with the likelihood of increased activity in due course. Panellists were keen to point out the growing trend of dual-listings driven by TSX-V entities migrating to the ASX.
Takeover defences and shareholder activism
Maintaining strong shareholder engagement and understanding shareholder motivations were highlighted as crucial in managing takeover defences effectively. Increased shareholder activism, particularly around governance and strategic direction, has heightened the need for continuous investor communication and active shareholder registry management.
A vibrant outlook amid challenges
The panel was unanimous in pointing to the resilience of Australia’s resource sector and the strategic necessity of adaptive financing solutions. They also reinforced the essential need for effective due diligence frameworks for successful M&A transactions.
Amid market volatility and regulatory complexities, the overarching sentiment from panellists was that market conditions are ripe for M&A activity to continue, if not increase. Panellist also urged attendees to be watchful of the continued growth expected in the number of dual-listed entities coming onto the ASX.
Additionally, there are compelling, countercyclical opportunities emerging in other metals and metal processing assets that both industry participants and investors may wish to consider, offering potential for value creation through strategic timing and a buy-low, sell-high approach.
Commodities-wise, gold, copper, lithium, silver and critical minerals should continue to present significant growth opportunities for companies, shareholders and investors alike.
