LONDON, UK / ACCESSWIRE / April 03, 2018 / Active-Investors.com has just released a free research report on Gold Fields Ltd (NYSE: GFI). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=GFI as the Company's latest news hit the wire. On March 29, 2018, the South African-based gold mining Company announced that it has, through its wholly-owned subsidiary, signed an agreement to form a 50:50 joint venture (JV) with Canada's Asanko Gold, Inc. (NYSE AMERICAN: AKG) ("Asanko"). Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Details of the JV Agreement
- Gold Fields' subsidiary will acquire a 50% stake in Asanko Gold Ghana Ltd ("AGG")'s 90% ownership interest in the Asanko Gold Mine (AGM), associated properties, and exploration rights in Ghana. The AGM is a multi-deposit complex, with two main deposits, Nkran and Esaase, and nine known satellite deposits.
- Gold Fields' subsidiary will subscribe to a 9.9% share placement in Asanko by way of a private placement of 22,354,657 Asanko shares, at a price of approximately $0.79 per share, for a total consideration of $17.6 million, anticipated to be completed in the immediate future.
- Upon closing of the transaction, Gold Fields will make an upfront payment of approximately $165 million to Asanko, and a deferred payment of $20 million. Gold Fields will fund the acquisition from cash and by drawing down on Gold Fields existing debt facilities.
- Asanko will use the proceeds primarily to repay its outstanding Red Kite debt of $164 million. Asanko will remain the manager and operator of the AGM and will receive approximately $6 million per annum for services rendered to the JV.
- A management committee, comprising representatives from Asanko and Gold Fields, will be formed for overseeing the operations of the mine. A technical sub-committee will also be formed to provide technical advisory services to the management committee.
- The transaction is expected to close in Q3 2018, provided the Ghanaian government approves the deal.
JV Will Give Access to Asanko's Low-Cost Production Ounces
The Asanko JV will give immediate access to low-cost production ounces, increasing the quality of Gold Fields' portfolio. The sizeable resource base of the asset is immediately accretive to Gold Fields in terms of life, with the potential for further discoveries on the large, relatively unexplored tenement package held by Asanko. The transaction exceeds Gold Fields' requirement of a return of 15% at a gold price of $1,300/oz, with a payback period of five years out of an anticipated life-of-mine of at least 15 years.
The transaction is also in-line with Gold Fields' current growth strategy of focusing on jurisdictions in which the Company already has an established footprint. The AGM is located in Ghana, where Gold Fields has more than 20 years of in-country experience.
Transaction Presents Unique Opportunity for Asanko to De-Risk its Future Production Targets
Peter Breese, President and Chief Executive Officer (CEO) of Asanko, mentioned that this transaction presents a unique opportunity for Asanko to de-risk its future production targets whilst at the same time eliminating corporate debt. With a healthy balance sheet and robust operational cash flows, together with a strong technical endorsement, Asanko's Life of Mine plan is assured.
Gold Fields Views AGM as Great Addition to Existing Portfolio
Commenting on the agreement, Nicholas Holland, CEO of Gold Fields, stated that West Africa is an important part of the Company's business, and that it looks forward to a long partnership with Asanko in Ghana. Holland added that Gold Fields views the AGM as a high-quality asset and a great addition to the Company's existing portfolio of open pit gold operations in the country.
About Gold Fields Ltd
Headquartered in Sandton, Johannesburg, Gauteng, South Africa, Gold Fields is an unhedged, globally-diversified producer of gold with eight operating mines in Australia, Ghana, Peru, and South Africa, with attributable annual gold production of around 2.0 million ounces. It has attributable mineral reserves of around 48 million ounces and mineral resources of around 101 million ounces.
About Asanko Gold, Inc.
Built in 2015 and headquartered in Vancouver, Canada, Asanko is a large scale, multi-pit asset. The Company's vision is to build a low-cost, mid-tier gold mining organization through organic production growth and exploration and disciplined deployment of its financial resources. Asanko's flagship project is the multi-million ounce Asanko Gold Mine located in Ghana, West Africa.
Stock Performance Snapshot
April 02, 2018 - At Monday's closing bell, Gold Fields' stock ended the trading session flat at $4.02.
Volume traded for the day: 4.23 million shares, which was above the 3-month average volume of 4.15 million shares.
Stock performance in the last month–up 1.01%; and past twelve-month period –up 15.52%
After yesterday's close, Gold Fields' market cap was at $3.44 billion.
The stock has a dividend yield of 1.74%.
The stock is part of the Basic Materials sector, categorized under the Gold industry.
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