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Gold Fields extends reach - Business Live

Tuesday, 8 November 2016

Gold Fields is expanding its Australian footprint, buying half an undeveloped gold project owned by the listed Australian gold development company Gold Road Resources for A$350m ($268m) and a smelter royalty agreement, accelerating development of a mine.

The R3.6bn investment in the joint venture agreement marks the second big capital outlay by Gold Fields in recent weeks, with a R19.5bn investment in its Damang mine in Ghana to extend its life by eight years to 2024 and tap into 1.56-million ounces of gold.

Gold Road has agreed to bring Gold Fields in as its equal partner at the large Gruyere deposit, with a resource of 6.2-million ounces. Gold Road is headed by Ian Murray, former CE of DRDGold, which operates in SA.

"We continue to believe the structurally stylised gold deposits in Western Australia are of good quality which provides optionality and flexibility across mine tenements.

"We expect the Gold Fields production profile to increase between 6% and 8% once Gruyere is fully in production and further prolong life of mine at its Australian asset base," Macquarie said.

Other analysts raised concerns about debt levels within Gold Fields that have fallen to $1bn, but applauded the presence of Gold Fields in one of Australia’s newest gold tenements, with additional prospects in the joint venture adding to the prospective nature of the deal.

Gold Fields will pay A$250m up front from cash holdings in Australia, and A$100m as Gold Road calls on cash to fund the Gruyere project.

The South African miner will pay a 1.5% net smelter royalty on its share of production once the project has delivered 2-million ounces of gold.

Gold Fields will manage the development of the Gruyere mine and the deal is expected to be concluded in December.

"Australia is a key part of our business and our largest cash generator," said Gold Fields CEO Nick Holland

"And this deal enhances our portfolio and expands our exposure to a new and emerging goldfield in Western Australia," he said.

 

 

Gold Fields extends reach - Business Live

Tuesday, 8 November 2016

Gold Fields is expanding its Australian footprint, buying half an undeveloped gold project owned by the listed Australian gold development company Gold Road Resources for A$350m ($268m) and a smelter royalty agreement, accelerating development of a mine.

The R3.6bn investment in the joint venture agreement marks the second big capital outlay by Gold Fields in recent weeks, with a R19.5bn investment in its Damang mine in Ghana to extend its life by eight years to 2024 and tap into 1.56-million ounces of gold.

Gold Road has agreed to bring Gold Fields in as its equal partner at the large Gruyere deposit, with a resource of 6.2-million ounces. Gold Road is headed by Ian Murray, former CE of DRDGold, which operates in SA.

"We continue to believe the structurally stylised gold deposits in Western Australia are of good quality which provides optionality and flexibility across mine tenements.

"We expect the Gold Fields production profile to increase between 6% and 8% once Gruyere is fully in production and further prolong life of mine at its Australian asset base," Macquarie said.

Other analysts raised concerns about debt levels within Gold Fields that have fallen to $1bn, but applauded the presence of Gold Fields in one of Australia’s newest gold tenements, with additional prospects in the joint venture adding to the prospective nature of the deal.

Gold Fields will pay A$250m up front from cash holdings in Australia, and A$100m as Gold Road calls on cash to fund the Gruyere project.

The South African miner will pay a 1.5% net smelter royalty on its share of production once the project has delivered 2-million ounces of gold.

Gold Fields will manage the development of the Gruyere mine and the deal is expected to be concluded in December.

"Australia is a key part of our business and our largest cash generator," said Gold Fields CEO Nick Holland

"And this deal enhances our portfolio and expands our exposure to a new and emerging goldfield in Western Australia," he said.

 

 


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