By Sybilla Gross, Bloomberg.
Gold Fields will buy Gold Road Resources in a deal valuing its Australian joint venture partner at A$3.7 billion ($2.4 billion), a sweetened offer following weeks of negotiations over their key project in Western Australia.
The Johannesburg-listed miner will use cash to acquire all outstanding shares at A$3.40 each — 12% higher than a previously rejected proposal put forward by Gold Fields in March, Perth-based Gold Road said in a statement Monday.
Shares in the firm jumped as much as 12% after the announcement and closed 9.4% higher at A$3.25 per share. Gold Fields shares rose as much as 2.8% in Johannesburg.
Bullion’s record-breaking rally over the past three years — with prices topping $3 500 an ounce last month — has renewed interest in deal-making across the sector after years of overspending and operational setbacks curbed appetite for assets. While that means some deals may be negotiated toward the top of the market, large producers have been encouraged to sell smaller mines that without fresh investment are approaching the end of their lives.
The deal — unanimously recommended by Gold Road board members — will consolidate Gold Fields’ 50% ownership of the joint-venture Gruyere mine it operates in Western Australia. The project, which produced 287 000 ounces of gold in 2024, accounted for about 11% of Gold Fields’ free cash flow from extractive operations last year.
The transaction, which requires the support of 75% of Gold Road’s shareholders, is expected to complete in October, Gold Fields Chief Executive Officer Mike Fraser said in an interview.
There’s been a flurry of deals in the sector in recent months, including Northern Star Resources purchase of De Grey Mining in an all-share takeover valuing the target at about A$5 billion. CMOC Group purchased Canada’s Lumina Gold Corp. in April, while Gold Fields last year agreed to buy Osisko Mining to secure full ownership of the Windfall development project in Quebec.
Meanwhile, Newmont Corp — the world’s largest gold producer — generated $4.3 billion on asset sales earlier this year. Barrick Gold Corp last month exited an Alaskan mining project by selling its 50% stake to billionaire John Paulson and Novagold Resources for $1 billion.
Gold Fields’ offer implies a total enterprise value of A$2.4 billion and represents a premium of 43% to the Australian company’s closing price on March 21 — before the larger miner initially announced its acquisition intention, Gold Road said Monday.
The South African firm – which is studying how to prolong operations at the Gruyere asset – will also acquire Gold Road’s exploration rights near the mine.
“Given that we do need to do some additional effort into extending the life, it made sense that we did this on a 100% basis rather than on a 50% basis,” Fraser said.