1/ One of my favourite gold industry graphics: Prod’n distribution for mines/projects >25koz/yr (primary Au deposits only). Many take-aways, incl justification for non-linear valuations (premium for rarity); extent to which Senior Au miners operate deep in the distribution tail..

2/ Seniors that operate/expl for mines/projects >500k oz/yr live deep in distribution tail. This is a different way to express root cause of (a) y/y reserve life compression that is exacerbated by fewer multi-mln oz discoveries; (b) (pre-M&A) prod’n trending lower

3/ To their credit, $ABX & $NEM own many of the giant primary Au deposits, have consolidated positions in Tier 1 mines & projects through M&A and, importantly, have recently divested of non-core mines to start process of aligning overall prod’n levels w/ the geologic distribution

4/ While bulking up the mkt cap via M&A has helped the Seniors attract the “elusive” generalist investor & drive passive demand – an “if you build it, they will come approach” - longer-term, it becomes harder to align prod’n scale w/ geologic distribution

5/ Statistically speaking, Mid-tier producers, who tgt assets w/ a min size of 125-150k oz/yr, are much better situated in the distribution = exponentially more opportunities for prod’n/reserve growth & the possibility to be jurisdictionally focussed vs. chasing geology.

6/ There is a sweet spot where the mkt cap is large enough to attract large longer-term (stickier) generalist dollars and prod’n is of a size that still allows for prod’n & reserve growth. $AEM has spent much of its time in the sweet spot. $KL is a newer entrant

7/ M&A between Mid-tiers could push more into sweet spot = higher val’n for longer, w/ key caveat that the pro-forma project pipeline needs to support the larger prod’n base. @TraderPamplona likes the $AGI/$EGO idea. Perhaps a 3-way (2 producers + a large dvp asset gets it done)