Gold Fields has secured shareholder approval from joint venture partner Gold Road for its takeover of the coveted Gruyere mine in Western Australia.
The deal, which closed in May, will see Gold Fields consolidating its ownership of the low-cost, high-grade gold mine, which it has operated since mid-2019.
As part of the takeover, Gold Fields will receive a $1.1bn cash injection after it announced this week it would sell the sizeable chunk of Northern Star Resources it inherited from Gold Road as part of the buyout.
The agreement followed a three-month corporate battle, which saw Gold Fields sweetening its offer for 100% of the Perth-based miner’s share capital from $3.3bn in March to $3.7bn in May.
Under the terms of the deal, Gold Road shareholders will receive
a fixed cash portion of A$2.52 per share, less the special dividend of 43 Australian cents declared by the Gold Road board on September 16, resulting in a final fixed cash consideration portion of A$2.08 per share, and an A$0.98 variable cash portion, valuing the company at A$3.3bn.
Gold Fields CEO Mike Fraser welcomed the stamp of approval from Gold Road’s board, saying: “This acquisition is a strategically logical, low-risk opportunity to further improve the quality of our portfolio through consolidation of a high-quality asset that we already operate.
“We appreciate the partnership we have had with Gold Road and look forward to further developing the potential of the Gruyere Gold Mine and Gold Road’s exploration packages to the benefit of Gold Fields’ shareholders.”
With all conditions now met, the scheme becomes effective on October 14.
The shareholder approval comes just days after Gold Fields sold its 19.5% stake in Toronto-listed Galiano Gold, raising C$151.4m (about R1.88bn) in a block trade last week.
The company has been consolidating its portfolio after record gold prices saw it report surging profit for the six months to end-June, with headline earnings per share more than three times higher year on year.
The company, which operates nine mines across Australia, Ghana, Peru, Chile, Canada and SA, is now valued at more than R615bn on the JSE.
The shares are up more than twofold since the start of the year, and closed 2.7% higher at R706.49 on Friday.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.