Gold Fields has confirmed it is in discussions with Australian miner Gold Road Resources regarding a proposal to acquire 100% of Gold Road by way of an Australian scheme of arrangement.
Gold Fields issued the confirmation on Friday in response to recent media speculation and Gold Road’s trading halt on Friday over a potential change-of-control transaction.
Gold Road said in a market announcement to the Australian Securities Exchange (ASX) the same day that its securities would halted at its request, pending an announcement.
“Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Tuesday, May 6 2025 or when the announcement is released to the market,” the statement read.
On March 24, Gold Fields provided a nonbinding, indicative and conditional proposal to Gold Road’s board to acquire 100% of the issued and outstanding share capital of the Perth-based miner.
Gold Fields offered a cash consideration of A$3.05 per share, which comprised a fixed portion of A$2.27 per share plus a variable portion equal to the value of each shareholders’ proportion of Gold Road’s shareholding in De Grey Mining.
The proposed acquisition would consolidate Gold Fields’ ownership of Gruyere, a low-cost, long-life gold mine in Western Australia, in which Gold Road holds a nonoperating joint venture interest. Gruyere is operated by Gold Fields.
Coveted for its low-cost production and long operational lifespan, Gruyere boasts a substantial mineral resource of more than 6-million ounces of gold, making it one of Australia’s largest undeveloped gold deposits. Its ore reserve is estimated at
3.7-million ounces, with a mine life of more than 10 years. It produces about 35,000oz of gold per year.
The initial proposal was rejected by the Gold Road board, and after subsequent discussions Gold Fields said it was disappointed the board had not constructively engaged on key elements of the proposal. These would have allowed both parties “to confidentially progress towards an outcome that would deliver compelling and certain value to Gold Road shareholders”.
Gold Fields CEO Mike Fraser said at the time that the group had been disappointed and would continue to “seek the engagement of the Gold Road board to consider the merits of the proposed acquisition and to advance the proposal”.
As part of its rejection, Gold Road countered with a proposal to buy Gold Fields’ 50% stake in the Gruyere mine, which the SA miner rejected.
Gold Fields said on Friday that given the nature of the proposed transaction, there could be no certainty that engagement would result in a transaction being successfully concluded.
Shareholders were advised to continue exercising caution when dealing in their securities until any further announcement was published.
The gold miner’s shares closed down 5.86% on Friday at R394.47, though its share price is up 50.6% year to date.
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