Gold Fields Limited has announced the divestment of its 45 per cent shareholding in the Asanko gold mine in Ghana to TSX-listed joint venture partner Galiano Gold for a total consideration of US$170m. The transaction also includes a one per cent net smelter royalty on future production from the Nkran deposit, the main deposit at the mine.
The Asanko mine, currently owned 45 per cent each by Gold Fields and Galiano Gold, with Galiano managing the mine, while the Government of Ghana holds the remaining 10 per cent. According to a statement issued in Accra today, the transaction will be settled by Galiano to Gold Fields through a combination of upfront, deferred and contingent consideration.
Further details of the settlement structure reveal that US$85m will be settled with US$65m in cash and US$20m in Galiano shares on completion of the transaction; US$25m to be paid on December 31, 2025; US$30m to be paid on 31 December 2026; and US$30m plus a one per cent net smelter royalty to be paid once more than 100koz of gold equivalent is produced from the Nkran deposit. The royalty is capped at a volume of 447koz.
Gold Fields currently holds a 9.8 per cent shareholding in Galiano, with the share purchase agreement limiting the shareholding that Gold Fields can raise this to 19.9 per cent. The release also stated that should the market value of Galiano shares be less than the requisite US$20m, Galiano will make up the difference with an additional cash payment.
Gold Fields Interim CEO, Martin Preece, expressed his satisfaction with the agreement, stating that "We are pleased to have concluded this agreement with Galiano. It is clear that the committed path forward for the Asanko mine requires consolidated ownership." He added that Gold Fields is pleased to realize value for its holding now, while providing flexibility to Galiano in the recapitalization of the mine and resuming mining to maximize its prospects of success.
Preece emphasized that the divestment of their interest in Asanko is part of their ongoing disciplined portfolio management process and releases capital for deployment by the Company in line with their other capital allocation priorities. The current transaction, expected to be completed during Q1 2024, is subject to a number of conditions, including regulatory approvals.
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