Gold Fields has agreed to buy an 18.9 per cent stake in the Tarkwa and Damang gold mines in Ghana from IAMGOLD Corporation for $667 million.
The acquisition will increase Gold Fields’ interest in both mines from 71.1 per cent to 90 per cent. The remaining 10 stake is held by the government of Ghana.
The deal, which is expected to be completed by the end of July, will give Gold Fields an additional 181,000 ounces of annual production; an additional 2.14 million reserve ounces at a cost of around $300 per ounce; and an additional 3.27 million resource ounces at a cost of approximately $198 per ounce.
Commenting on the deal, Nick Holland, Gold Fields’ CEO, said: "Through this transaction we will consolidate our ownership in two world-class mines in a stable and mining friendly jurisdiction where we have been operating successfully for almost two decades and have a strong brand.
"This is a low-risk acquisition of ‘in-production ounces' generating healthy free cash flow that will improve the overall quality of our portfolio and be accretive to our shareholders on a per share basis.”
He concluded: "This proposed acquisition, together with the recent offer to the minority shareholders in our Cerro Corona mine in Peru, are important steps towards our objective of international diversification, and will contribute meaningfully to our target of growing our production base to five million ounces, either in production or in development, by 2015."
Gold Fields is one of the world’s largest unhedged producers of gold, with an annual production of 3.6 million gold equivalent ounces from eight operating mines in Australia, Ghana, Peru and South Africa.
The Johannesburg-based company has total attributable gold equivalent mineral reserves of 76.7 million ounces and mineral resources of 225.4 million ounces.
