Gold Fields acquires Australia's Gold Road Resources in a higher A$3.7 billion deal
Mining
Gold Fields' South Deep gold mine in South Africa. The global mining group has also clinched a deal to acquire the remaining 50% of Gold Road Resources, that it does not already own, valuing the Australian mining company at A$3.7 billion.
Image: Siupplied
Gold Fields has clinched the deal to acquire full control of Gold Road Resources after offering terms worth A$3.7 billion, higher than the A$3.3bn offer that the Australia-listed mining group initially rejected.
Gold Fields said Monday the R44bn agreement had been reached between them at A$3.40 per Gold Road share. Gold Road’s share price notched up 9.4% on the Australian Stock Exchange to A$3.25 per share on Monday, while on the JSE, Gold Fields’ share price surged 5.55% to R416.35.
Gold Fields’ subsidiary, Gruyere Holdings, had entered into a binding scheme to acquire 100% of the share capital of Gold Road that it does not already own by way of an Australian scheme of arrangement, a statement from the Johannesburg-based global mining group said.
“The consolidation of our ownership in Gruyere gold mine (in which Gold Fields has a joint venture with Gold Road) is firmly aligned to our strategy of improving portfolio quality through investment in high-quality, long-life assets and is immediately additive to the group's cash generation,” Gold Fields CEO Mike Fraser said in a statement.
He said the acquisition represented a logical and low-risk opportunity to enhance Gold Fields' portfolio through the consolidation of the Gruyere joint venture, in which Gold Fields is the operator.
The offer represented a 43% premium to Gold Road's closing share price on the Australian Stock Exchange of A$2.38 per share on March 21, 2025.
The Gold Road board has recommended that Gold Road shareholders vote in favour of the scheme, in the absence of "a superior proposal", and subject to an independent expert concluding the scheme is in the best interests of the shareholders,” the statement from Gold Fields said.
The A$3.40 per Gold Road share will comprise a fixed cash portion of A$2.52 for each Gold Road share, and a variable cash portion equal to the value of each shareholder's proportion of Gold Road's shareholding in Northern Star Resources.
Additionally, if the scheme becomes effective, Gold Road intends to declare a special dividend, the value of which will be based on the prevailing balance of Gold Road at the time of the distribution.
As at May 2, 2025, this implied a special dividend of about A$0.35 per Gold Road share for a total special dividend payment of about A$379 million.
“Gold Fields has confirmed to Gold Road that the consideration proposed under the scheme is a ‘best and final' price and will not be increased further,” the statement said.
“As the Gruyere gold mine is an operating asset, Gold Fields' cash-flow profile is immediately enhanced by the acquisition and will support Gold Fields' ability to increase shareholder returns going forward. Full ownership of the Gruyere gold mine enables Gold Fields to streamline decision-making and increases flexibility with respect to asset operation and future development opportunities,” Fraser said.
In addition, Gold Road's exploration properties, particularly in the under-explored Yamarna Greenstone Belt, were a “highly attractive opportunity to develop satellite deposits to leverage the existing mining and processing infrastructure at the Gruyere gold mine.”
Gold Road holds a 50% interest in the Gruyere gold mine alongside a portfolio of 100%-owned exploration projects located across the broader Yamarna Greenstone Belt, which hosts the Gruyere gold deposit.
Gold Road has been focused on advancing the development of the Yamarna Mine Readiness Project, which includes a combination of exploration, technical and economic studies, environmental permitting, and Native Title negotiations, the statement said.
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