Gold Fields and AngloGold Ashanti announced yesterday that they have agreed on the key terms of a proposed joint venture in Ghana, which would create the largest gold mine in Africa.
The joint venture is between Gold Fields’ Tarkwa and AngloGold Ashanti’s neighbouring Iduapriem mines, but the mining firms said they were not considering a full-scale merger.
Shares in Gold Field rose 1.77% to R200.95, while shares in AngloGold fell 3.34% to R352.33.
The Tarkwa Mine is held by Gold Fields Ghana, in which Gold Fields currently owns a 90% share, and the government of Ghana (GoG) holds 10%. The Iduapriem Mine is currently 100% owned by AngloGold Ashanti. Both mines are located near the town of Tarkwa in the country’s Western Region.
If the joint venture goes ahead, Gold Fields and AngloGold would own 60% and 30% of the joint operation, respectively, with the Ghanaian government holding 10%.
AngloGold Ashanti CEO Alberto Calderon said there had been no conversation about a merger, and the focus at the moment was on the joint venture.
"We are in similar places around the world, but for now this is the thing we are focused on. We’re not going to entertain any speculation on that (a merger). There’s no conversation or anything of that sort," he said.
Gold Fields interim CEO Martin Preece said: "The proposed joint venture is an exciting opportunity to combine mining operations that are essentially part of the same mineral deposit and is something that Gold Fields and AngloGold Ashanti have discussed many times before over the years.
"The ability to optimise mining and the use of shared infrastructure across the combined operation will result in significant flexibility in mine planning, materially enhancing the economics of the mine and ensuring quality and scale of operation that will be world-class.
He said the unlocked value would underpin the proposed joint venture’s continued contribution to our host communities and Ghana for decades to come. For Gold Fields, it would also significantly enhance the overall quality of our portfolio.
Calderon said the combination puts together two parts of the same world-class ore body, allowing them to share skills and infrastructure to significantly enhance every aspect of this mining operation, from exploration and planning to mining and processing.
“By creating one of the world’s largest open-pit gold operations, in a pre-eminent mining jurisdiction, we will create longer-term value not only for AngloGold Ashanti and Gold Fields but for the combined stakeholders in our local host communities and for all of Ghana,” he said.
According to the groups, the joint venture would produce an average of 900 000 ounces annually over the first five years and 600 000 ounces over its estimated 18-year life of the mine, the companies said.
“The proposed joint venture would create the largest gold mine in Africa and one of the largest in the world. It will be a high-quality operation, supported by a substantial mineral endowment and an initial life spanning almost two decades,” the groups said.
The groups estimated all-in sustaining cost, in 2023 terms, of less than $1000 (R18 398) per ounce over the first five years and less than $1 200 per ounce over the estimated life of the operation.
"It is expected that the ore reserves for the proposed joint venture will exceed the sum of the ore reserves for the stand-alone operations due to the anticipated operational synergies, and the declaration of additional mineral resources and ore reserves as a result," the mining companies said.
BUSINESS REPORT