Merger and acquisition activity in the gold sector goes hand in hand with rising gold prices. On that basis, every man and his dog has been tipping 2025 will see another rash of takeovers/mergers.

Before the recent run in the gold price to ever greater heights, there was Northern Star’s takeout of De Grey, and before that, Newmont’s takeover of Newcrest. Both were agreed scrip-only takeovers so everyone gets to share the upside.

Away from the big end of town there has also been a spate of smaller takeovers/project acquisitions, pointedly by well-priced developers/producers for explorers with advanced projects or for developers without the critical mass to become stand-alone producers.

Any market poll of where M & A activity in 2025 will land comes with more activity in the Leonora district at the top of the list, most notably a tie-up between Raleigh Finlayson’s $3.5 billion Genesis (ASX:GMD) and Luke Tonkin’s $2.7 billion Vault (VAU).

But Finlayson for one has sent a clear message that punters backing home a move by Genesis on Vault is not on, not in the current high gold price market at any rate.

On Wednesday, he said in Genesis’ interim financial results release that he believed an emphasis on organic growth opportunities will maximise its financial returns from the strong gold price compared with M & A activity in the current environment.

And just in case that message was missed, Finlayson had another go: “While we continue to assess M&A opportunities, we believe that in the current gold price environment we stand to make the best returns by developing our pipeline of organic opportunities”.

Strickland Metals (ASX:STK):

Strickland (ASX:STK) boss Paul L’Herpiniere does not shy away from setting an ambitious growth target for the $150 million (6.8c a share) Serbian/WA gold and base metals explorer, with the main value kicker to be its Rogozna gold-copper project in Serbia.

He reckons Rogozna could be a massive value creator for Strickland just as the Vares silver-lead-zinc project in neighbouring Bosnia & Herzegovina has been for ASX-listed Adriatic Metals (ASX:ADT) – a 20c float in 2018 now worth $1.2 billion.

Vares is in production while Strickland is not. But L’Herpiniere has certainly been moving Rogozna in the right direction since Strickland acquired the project from private equity interests in April last year.

What was a 5.41 million oz gold equivalent project from a tight cluster of gold-rich deposits (compared with the gold grades of large-scale porphyry/skarns elsewhere) has just been bumped up by 24% to 6.69Moz of gold-equivalent.

The addition came from the maiden resource estimate for the Medenovac deposit. Another increase in Rogozna’s overall resource estimate is planned for the September quarter when a maiden estimate is expected for the Gradina prospect.

So Rogozna is big in ASX terms and global terms as it is. But with six rigs now whirring away across the known deposits and more recent discoveries, it is going to get bigger still.

Thanks to a collect from Northern Star on the sale of a Yandal/WA gold deposit last year, Strickland has close to $34m in cash and shares to keep up the exploration pace.

Having said all that, the market is obviously holding back on rewarding Strickland for the Rogozna pick-up and the subsequent growth in its resource base. The company’s $150m market cap says as much, remembering it remains an active gold explorer in the Yandal belt.

It seems small shareholders that had long held positions in Strickland for its WA gold interests aren’t on board for the Serbian adventure, regardless of its big-time potential. And they have been heavy sellers with the selling not quite done yet.

The company’s Top 20 though have remained on board and like the combination of Rogozna and WA.

More broadly, Rio Tinto’s frustrated ambition to develop its Jadar lithium-boron project in Serbia has tarnished the country’s status as a mining destination in the eyes of some mining exploration/development investors, particularly in the Eastern states.

But Rogozna is about 400km south of Belgrade in a historic and active mining region. That puts it about 300km south-east of Jadar where prime agricultural land is a competing interest.

Strickland’s case for a major re-rating on the back of Rogozna’s growing scale and its future development optionality across the current four deposits should come into its own towards the end of the year when a scoping study is expected.

Planning for a 200,000oz per annum gold-equivalent project with a multi-decade life in the first instance would not surprise.

The scoping study will also be a de-risking event for the industry majors looking for a growth option in what is a heavily mineralised part of the world, one opening up in the modern era under the tutelage of the EU.

So merger and acquisition activity around Strickland/Rogozna from the big end of town will not surprise.

Southern Cross Gold (SX2):

The local market is finding it harder to find value in the gold stocks, even if the gold price seems to be continuing its march to $US3,000/oz.

More and more analyst reports are switching from buy recommendations to hold. The common theme is that while gold stocks haven’t matched the record performance of the yellow metal, they have had a good run.

And there are few if any analysts plugging $US3,000/oz gold into their models. So the implied premiums between target prices and actual share prices have been narrowing at a rate of knots in recent weeks.

But there are some stocks out there attracting outperform recommendations with attendant share price targets that are 15% or more higher than their ruling market price.

One of those is Southern Cross Gold (ASX:SX2) which was trading on Thursday at $3.60 a share. RBC analyst Alex Barkley has just initiated on the stock with a outperform rating and a $4.20 a share price target (+16.66%).

The stock is lightly covered in this market (it is dual listed in Toronto) so the attention of RBC is no doubt welcome stuff for the SX2 crew who have been drilling away at the Sunday Creek gold/antimony project at Clonbinane up the Hume Hwy, and all of 55km north of Melbourne.

Following the Canadian model of growing the resource first before rushing projects into production, Southern Cross did go as far to report an “exploration target” of 1.05M to 1.6Moz at 7.2g/t-9.7g/t gold-equivalent early last year.

Sunday Creek’s payable reefs were first worked way back in 1866. So as RBC put it, the modern day project is really a rediscovery of a high grade system, on the doorstep of Melbourne to boot.

RBC said that as drilling since has continued to produce high-grade hits along increasingly predictable structures, it expects the exploration target could potentially double to about 2.7Moz gold-equivalent by mid-2025 – a likely pivot point for infill drilling in support of a maiden resource estimate to begin.

RBC went a step further to suggest a 700,000tpa operation costing $500m could produce 185,000oz gold equivalent at an industry-best AISC of $A397/oz due to antimony by-product credits.

In line with what was said above about analysts keeping a tight rein on their metal assumptions, the RBC work assumed $US2,200/oz gold compared with spot of $US,2940/oz, and an antimony price of $US16,000/t compared with spot prices of $US50,000/t (thanks to China’s export controls).

RBC noted that some material technical and financial risks remain at the early-stage project which goes to the firm’s speculative risk rating on the stock. But it also noted that gold and antimony price upside from its long-term price assumption could be seen as an offsetting factor.