The Johannesburg-based combined company will have a market capitalization of $ 15.9 billion. Gold Fields shareholders will own about 61% of the mine’s shares, while Yamana holders will own the remaining 39%.
The move fits Gold Fields ‘ambitions to expand across the Americas, especially in the southern hemisphere, despite investors’ concerns about populist policies and the risks of raising mining taxes there.
CEO Chris Griffith, who described the Yamana acquisition as a “monstrous deal”, said the transaction provided a solution to the relatively short life of Gold Fields’ existing operations.
Griffith also said Gold Fields has been looking for assets that complement its growth strategy and provide operational synergies.
“That’s what Yamana’s assets do, they tick all these boxes for us. They bring high-quality assets to Canada, Chile and Brazil, with big pipeline projects in both Canada and Argentina in particular,” Griffith said. in a presentation.
The Toronto-based asset portfolio includes the Wasamac project under development in Quebec, the Jacobina gold mine in Brazil, the Cerro Moro gold and silver operation in Argentina, and two projects in initial phase to Chile. It also has a 50% stake in Malartic, Canada’s largest open pit gold mine.
Waiting for Salares Nord
Gold Fields, with operations in Australia, West Africa and the Americas, has only one mine left in its home country: South Deep. Its portfolio includes three operations in Ghana, the Cerro Corona mine in Peru and the Salares Norte project in Chile, where the company has found some hiccups.
First the company had to deal with the relocation of a small population of endangered chinchillas and is now facing possible sanctions from the country’s environmental regulator for the death of guinea fox specimens in the area. The company said the project is well on track to begin production in the first quarter of 2023.
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Apart from the Salares Norte mine in Chile, “we have no plans in place or any way to offset the fall in production that is expected to occur at Gold Fields over the next few years,” Griffith said.
The new Gold Fields could see its total production increase to 3.8 million ounces from 2024, as Salares Norte begins to contribute to global production, making the company the third largest gold miner. bigger, Griffith said. In a decade, the CEO sees Gold Fields as able to increase production to 4.8 million ounces.
Analysts believe there will be no competitive bid for Yamana.
“The most logical potential stakeholder is Agnico Eagle (TSX, NYSE: AEM), which has a joint venture with Yamana in the mine and the Canadian Malartic / Odyssey South project in Quebec,” wrote Jackie Przybylowski, an expert in metals and mining. of BMO. a note to investors.
“Agnico Eagle’s recent merger with Kirkland Lake is likely to take management time and limit the company’s bandwidth for another major transaction at this time,” Przybylowski wrote.
Gold Fields said the Yamana board has unanimously approved the deal, which is expected to close in the second half of 2022.
The South African miner has only one asset left in his home country: South Deep. (Image courtesy of Gold Fields.)