Gold Fields to become world’s no. 4 gold miner with Yamana buy

Golden fields will become world number one. 4 gold diggers with the acquisition of Yamana

The merged company, headquartered in Johannesburg, will have a market capitalization of $ 15.9 billion. Gold Fields shareholders will own approximately 61% of the miner’s shares, while Yamana holders will own the remaining 39%.

The move fits in with Gold Fields ‘ambitions to expand across America, especially in the Southern Hemisphere, despite investors’ concerns about populist policies and the risks of higher mining taxes there.

CEO Chris Griffith, who described the acquisition of Yamana as a “monster deal,” said the transaction provided a solution to the relatively short life of existing Gold Fields operations.

Griffith also said that Gold Fields was looking for assets that would complement its growth strategy and provide operational synergies.

“That’s what Yamano’s assets do, they tick all the boxes.” They bring high quality assets in Canada, Chile and Brazil, with great pipeline projects especially in Canada and Argentina, “Griffith said in a presentation.

The Toronto-based miner’s asset portfolio includes the development Wasamac project in Quebec, the Jacobin gold mine in Brazil, the Cerro Moro gold-silver operation in Argentina and two early-stage projects in Chile. It also owns a 50% stake in Malartic, Canada’s largest operating open gold mine.

Waiting for Salares Norte

Gold Fields, which operates in Australia, West Africa and America, has only one mine 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 faced certain challenges.

At first, the company had to deal with the relocation of a small population of endangered chinchillas and now faces potential sanctions from the national environmental regulator due to the death of culpeo foxes in the area. The company said the project was well on its way to starting production in the first quarter of 2023.

RELATED: 25 chinchillas stand between gold fields and Chilean gold worth $ 7 billion

Apart from the Salares Norte mine in Chile, “we have no projects in preparation or any way to deal with the decline in production that should come from the golden fields over the coming years,” Griffith said.

The new Gold Fields could see its total output climb to 3.8 million ounces as 2024 as Salares Norte begins to contribute to total production, making the company the third largest gold miner, Griffith said. Within ten years, the CEO sees that Gold Fields has the potential to increase production to 4.8 million ounces.

Analysts believe there will be no competitive offer for Yamana.

“The most logical potential bidder is Agnico Eagle (TSX, NYSE: AEM), which has a joint venture with Yamana at the Malartic / Odyssey South mine in Canada and a project in Quebec,” wrote BMO metal and mining expert Jackie Przybylowski. note for investors.

“The recent merger of Agnico Eagle with Kirkland Lake is likely to take management time and limit the company’s bandwidth for the next major transaction at the moment,” Przybylowski wrote.

Gold Fields said the Yamana board had unanimously approved the deal, which is expected to close in the second half of 2022.

The South African miner has only one asset in his home country – South Deep. (Image courtesy of Gold Fields.)

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