Wrap Text
Gold Fields Acquires Osisko Mining and Consolidates 100% Ownership of the Windfall Project
Gold Fields Limited
Reg. No. 1968/004880/06)
Incorporated in the Republic of South Africa)
JSE, NYSE, DIFX Share Code: GFI
ISIN Code:ZAE000018123
("Gold Fields" or the "Company")
GOLD FIELDS ACQUIRES OSISKO MINING AND CONSOLIDATES 100% OWNERSHIP OF
THE WINDFALL PROJECT
1. Introduction
Gold Fields is pleased to announce that it has entered into a
definitive agreement with Osisko Mining Inc. ("Osisko") ("Arrangement
Agreement"), to acquire all the issued and outstanding common shares
in Osisko, which are admitted to listing and trading on the Toronto
Stock Exchange ("TSX") ("Osisko Shares"), pursuant to a plan of
arrangement ("Transaction"). Osisko's primary asset is a 50% interest
in the Windfall Project in Canada ("Windfall" or the "Project"),
jointly owned with Gold Fields ("JV Partnership").
Under the terms of the Transaction, Gold Fields has agreed to acquire
the Osisko Shares at a price of C$4.90 per share in cash ("Offer
Price"). The Offer Price represents transaction consideration of
approximately C$2.16 billion (US$1.57 billion) on a fully diluted
basis ("Transaction Consideration") and enterprise value of C$1.48
billion (US$1.08 billion)(1).
The Offer Price represents a premium of 55% to the 20-day volume-
weighted average price on the TSX for the period ending 9 August 2024.
As a result of the Transaction, Gold Fields will fully control a highly
strategic asset, and the Transaction will extinguish Gold Fields'
existing obligations of a C$300 million deferred cash payment and C$75
million exploration obligation, which were part of the 2023 joint
venture transaction with Osisko.
Mike Fraser, CEO of Gold Fields said:
"We are pleased to consolidate the remaining 50% interest of the
advanced-stage Windfall Project and its highly prospective exploration
camp. Over the past two years, beginning with our initial due diligence
in 2022 and throughout our joint ownership of the Project since May
2023, we have developed a strong understanding of Windfall and its
potential, and view it as the next long-life cornerstone asset in our
portfolio.
The acquisition is consistent with our strategy to improve the quality
of our portfolio through investment in high-quality, long-life assets,
like Windfall. It provides an opportunity to consolidate our presence
in Quebec, a Tier-1 mining jurisdiction, and apply our experience and
expertise in greenfields exploration, project development and
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1. Enterprise value calculated as the C$2.16 billion fully diluted equity
value less net cash, securities, proceeds from in-the-money dilutive
securities and C$300 million deferred cash payment.
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underground mining as we consolidate full commercial control of the
Project and the exploration camp. Our proven track-record of near-
mine exploration and building multi-decade mining camps will be
invaluable in realizing Windfall's full potential.
We look forward to continue working closely with the host Cree First
Nation of Waswanipi, other local communities, the Quebec Government
and Windfall employees and business partners as we advance this Project
which I strongly believe will create shared, enduring value for Gold
Fields and our people, community, business and government partners."
2. Strategic rationale
The Transaction delivers on our strategy to grow the value and quality
of our portfolio. It consolidates the Company's interest in a world-
class, advanced-stage project that Gold Fields understands well,
having jointly owned the asset with Osisko since May 2023. With assets
situated in Quebec, Canada, Gold Fields will firmly solidify its
presence in a Tier-1 mining jurisdiction in one of the largest gold
deposits in Canada, and a top ten gold deposit globally by head grade.
Full ownership of Windfall enables Gold Fields to streamline decision-
making and increase flexibility with respect to the Project's
development and subsequent operation.
Based on Osisko's December 2022 feasibility study published on SEDAR+
(www.sedarplus.ca) (the "Windfall Feasibility Study"), Windfall is
expected to produce circa 300,000 ounces of gold per annum at an all-
in sustaining cost ("AISC") of US$758 per ounce (2023 real terms).
Our technical and project development work over the last year has
progressed our understanding of the asset and confirms our view that
Windfall is expected to become one of the lowest cost mines in our
portfolio.
Gold Fields believes that Windfall is on track to become its next
high-quality, low-cost underground gold mine, with considerable growth
prospects along strike and down plunge, well beyond delineated mineral
reserves and the current 10-year projected mine life set out in
Osisko's Windfall Feasibility Study.
The life extension upside, through expected resource conversion and
onsite exploration success, together with significant regional
exploration potential in the highly prospective Urban Barry and
Quévillon district exploration camps (circa 2,233km2), is anticipated
to provide a range of additional opportunities to Gold Fields' pipeline
beyond the scope of the Windfall Feasibility Study. The Transaction
will enable Gold Fields to pursue a more flexible, optimised camp-
wide exploration programme for which it will accrue 100% of the
benefits.
The near-mine, exploration upside is further enhanced by Osisko's
joint venture with Bonterra Resources Inc. ("Bonterra"), which, upon
completion of the joint venture earn-in, secures a 70% interest over
an additional ~225km2 of prospective exploration ground adjacent to
the Windfall deposit and proposed location of key project
infrastructure.
Gold Fields has extensive experience in exploring, delineating and
mining complex underground orebodies similar to the Windfall deposit,
through decades of efficient and profitable mining and reserve and
resource replacement at our Western Australian mines. Windfall is an
opportunity to further deploy our global project development and
underground mining expertise.
Development of Windfall is well advanced. As at May 2023 (when Gold
Fields announced the joint venture partnership with Osisko), Osisko
had invested more than C$800 million in Windfall. Since then, the
partners (through their respective 50% shares) have each invested an
additional ~C$158 million (total of ~C$316 million) on the development
of the Project. As a result, Windfall today includes over 2 million
meters of drilling, a submitted EIA permitting application in process,
studies, significant underground development and major surface
infrastructure.
The Project is now under its fourth bulk sample permit, with
underground infrastructure including 14km of underground development
to 671 metres of vertical depth into ore, four main ventilation raises
and 57 drill bays, an underground pumping station and a garage
currently under construction. Concurrently, extensive surface civil
works have already been undertaken, including a lined waste pad, three
lined water treatment ponds, a water treatment facility currently
under construction, administrative offices, communication tower,
temporary 300-person camp, and recreation area.
Environmental permitting for full scale construction of the Project
is underway, with a new round of questions recently received from the
Québec Ministry of the Environment, and final approval expected in
2025. In parallel, discussions have continued towards the execution
in due course of an Impact and Benefit Agreement with the Cree First
Nation of Waswanipi and the Cree Nation Government, as part of the
project development process.
The Transaction also strongly aligns to Pillar 2 of Gold Fields'
strategy – to build on our leading commitment to ESG – and will
materially contribute to the delivery of our 2030 ESG commitments. We
are encouraged by the strong ESG performance at Windfall, particularly
the relationships that have been forged with our host communities,
and we are committed to building on this as we take Windfall from
development into production.
During January 2024, the 85 km long 69 kV hydro-electric power line -
built, owned and operated by the Waswanipi Cree First Nation - was
completed on schedule, and grid power was successfully connected to
the Project. The use of hydroelectricity at Windfall marked the
switching over from diesel-generated electricity to renewables to
operate the camp and underground infrastructure, and will
significantly reduce both power costs and greenhouse gas emissions at
the site. Once in production, Gold Fields forecasts Windfall will be
one of the mines with the lowest carbon emissions in our portfolio,
on both an absolute and intensity basis.
3. Transaction structure
The Transaction will be carried out by way of a Canadian court-approved
plan of arrangement under the Business Corporations Act (Ontario)
pursuant to the Arrangement Agreement entered into between Gold Fields
and Osisko. On completion of the Transaction, Osisko shareholders will
receive cash consideration of C$4.90 per Osisko Share.
Completion of the Transaction will be subject to the approval of at
least two?thirds of the votes cast by the Osisko shareholders, as well
as a simple majority of the votes cast by Osisko shareholders excluding
certain related parties in accordance with Canadian securities laws.
The Board of Directors of Gold Fields and the Board of Osisko have
both unanimously approved the Transaction, with Osisko's directors
recommending that Osisko shareholders vote in favor of the
Transaction.
The Transaction is not subject to Gold Fields shareholder approval.
Each of the directors and executive officers of Osisko have entered
into a voting support agreement pursuant to which they have agreed,
amongst other things, to vote all of their shares in favour of the
Transaction.
The Arrangement Agreement includes customary deal protection
provisions, including non-solicitation (subject to a "fiduciary out")
and "right to match" provisions in favour of Gold Fields, in addition
to a C$108 million (US$79 million) break fee payable to Gold Fields
under certain circumstances.
4. Transaction funding(2)
The Transaction and its associated funding were assessed in line with
Gold Fields' capital allocation framework.
Gold Fields is in a strong financial position to satisfy the
Transaction Consideration, with an investment grade credit rating. As
at 31 March 2024, the Company had net debt to EBITDA of 0.51 and held
US$424 million in cash and approximately US$1.8 billion in undrawn
debt facilities. Subsequently on 15 May 2024, Gold Fields repaid bonds
totalling US$500 million.
In addition to the above, wholly-owned subsidiaries of Gold Fields
have entered into a commitment letter with a group of lenders, pursuant
to which the lenders have committed to provide a bank liquidity
facility of US$500 million to assist with funding a portion of the
Transaction. Gold Fields expects to fund the remainder of the
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2. The financial information contained in this section has not been
reviewed of reported on by the Company's external auditors.
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Transaction Consideration with cash on hand and undrawn existing
facilities as referred to above.
Gold Fields remains fully committed to its investment grade rating
and expects near-term free cash flow from existing operations to reduce
leverage following closing of the Transaction.
5. Conditions precedent
The respective obligations of Gold Fields and Osisko to complete the
Transaction are subject to the fulfilment of each of the following
conditions precedent on or before the effective time of the
Transaction, each of which may only be waived by mutual consent:
• Canadian Competition Act approval;
• Osisko shareholder approval and associated Court orders
customary for Canadian Plans of Arrangement; and
• Receipt of other applicable consents and approvals, including
approval from the TSX for Osisko.
As part of the conditions precedent, the Arrangement Agreement
includes certain additional conditions to the obligations of each of
Gold Fields and Osisko, which are customary for transactions of this
nature and, include, inter alia, conditions with respect to the ongoing
truth and correctness of the representations and warranties of the
other party as set out in the Arrangement Agreement, the material
compliance of the other party with its covenants as set out in the
Arrangement Agreement, and no material adverse change having occurred
in respect of Osisko.
Gold Fields and Osisko have committed to using their commercially
reasonable, best efforts to cooperate and engage with the relevant
authorities and affected stakeholders in order to ensure that the
Conditions Precedent are fulfilled as soon as possible to enable the
Transaction to be completed.
6. Transaction timing
Subject to satisfaction of the closing conditions referenced above,
Gold Fields expects the Transaction to be completed in Q4 2024. The
effective date of the Transaction will be a date shortly after the
plan of arrangement is approved by the Court.
Full details of the Transaction will be included in Osisko's management
information circular, which is expected to be mailed to Osisko's
shareholders in September 2024, with the Osisko shareholders meeting
expected to take place in October 2024. The Arrangement Agreement and
Voting Support Agreements will also be filed on SEDAR+.
7. Background on Osisko
Osisko currently hold a 50% interest in the high-grade Windfall gold
deposit located between Val-d'Or and Chibougamau in Quebec, Canada and
holds a 50% interest in a large area of claims in the surrounding
Urban Barry area and nearby Quévillon area (over 2,233km2).
Windfall is one of the highest-grade gold projects in Canada on a
property consisting of 286 individual claims covering an aggregate
area of 12,523 hectares. The property is located in the Abitibi
greenstone belt in the Urban Township of Eeyou Istchee James Bay,
Québec, Canada, which is 700 km north-northwest of Montréal, 200 km
northeast of Val-d'Or and 115 km east of Lebel-sur-Quévillon.
Osisko has also entered into a 70% exploration earn-in and joint
venture agreement on all of the Urban-Barry properties currently held
by UB Phoenix Corp. ("Phoenix") (hosting the Gladiator and Barry
deposits) and the Lac Barry property currently 85% owned by Phoenix
and 15% owned by Golden Valley Abitibi Royalties Ltd. The Duke property
(collectively with the Urban-Barry and Lac Barry properties, the
"Properties"), which is adjacent to the Urban-Barry and Lac Barry
properties, is currently 70% owned by Phoenix and 30% owned by Osisko.
All Properties are located in Quebec's Eeyou Istchee James Bay region
and total 495 claims over ~225km2.
Osisko is listed on the TSX and its shares are publicly held. As
disclosed in Osisko's Management Information Circular dated 18 April
2024, as of 12 April 2024, no person or company beneficially owns,
controls, or directs, directly or indirectly, voting securities of
Osisko carrying 10% or more of the voting rights attached to all
outstanding Osisko Shares, other than Blackrock, Inc. (17.6%) and
T. Rowe Price Associates, Inc. (10.0%).
On completion of the Transaction, Osisko will become a subsidiary of
Gold Fields and its articles and by-laws will comply with the
provisions of paragraph 10.21 of Schedule 10 of the JSE Listings
Requirements.
Windfall Feasibility Study Summary
(Effective date of November 25, 2022)
Based on the Windfall Feasibility Study(3) produced by Osisko Mining:
• Mineral Reserves of 3.2Moz (12.18Mt at 8.06g/t)
• Life-of-mine of 10 years
• Average production (100% basis) of 294,000 ounces (peak
production of 374,000 ounces in year 2)
• AISC of US$758/oz (C$985/oz)
• Total project capital expenditure of C$1.1 billion which
includes preconstruction spend of c.C$300 million
• First production remains subject to approval of permitting,
expected in 2025, and final engineering design
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3. The results of the Windfall Feasibility Study summarized in this news
release are intended to provide only a high-level overview of the
Project. These results are supported by the Windfall Feasibility Study
which can be found on SEDAR+ (www.sedarplus.ca) under Osisko's issuer
profile. The news release of Osisko summarizing the results of the
Windfall Feasibility Study can be found at:
https://www.osiskomining.com/osisko-mining-delivers-positive-
feasibility-study-for-windfall
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8. Financial information
Osisko's reported net value of assets and its profit after tax, as
disclosed in its audited results for the second quarter ended 30 June
2024, prepared in accordance with IFRS, were C$971.5 million and C$0.28
million respectively. This financial information can be accessed on
Osisko's website on www.osiskomining.com.
9. Categorisation of the Transaction
The Transaction constitutes a Category 2 transaction for Gold Fields
in terms of Section 9 of the JSE Limited Listing Requirements and
consequently, no Gold Fields shareholder approval is required.
ENDS
12 August 2024
Sponsor:
J.P. Morgan Equities South Africa (Pty) Ltd
Financial advisor:
RBC Capital Markets
Legal advisor:
McCarthy Tétrault
For investor enquiries contact:
Jongisa Magagula
Tel: +27 11 562 9775
Mobile: +27 67 419 9503
Email: Jongisa.Magagula@goldfields.com
Thomas Mengel
Tel: +27 11 562 9849
Mobile: +27 72 493 5170
Email: Thomas.Mengel@goldfields.com
For media enquiries contact:
Sven Lunsche
Tel: +27 11 562 9763
Mobile: +27 83 260 9279
Email: Sven.Lunsche@goldfields.com
About Gold Fields
Gold Fields is a globally diversified gold producer with nine operating
mines in Australia, South Africa, Ghana, Chile and Peru and one project
in Canada. We have total attributable annual gold-equivalent
production of 2.30Moz, proved and probable gold Mineral Reserves of
46.1Moz, measured and indicated gold Mineral Resources of 31.1Moz
(excluding Mineral Reserves) and inferred Gold Mineral Resources of
11.2Moz (excluding Mineral Reserves). Our shares are listed on the
Johannesburg Stock Exchange (JSE) and our American depositary shares
trade on the New York Exchange (NYSE).
About Osisko Mining Inc.
Osisko is a mineral exploration company focused on the acquisition,
exploration, and development of precious metal resource properties in
Canada. Osisko holds a 50% interest in the high-grade Windfall gold
deposit located between Val-d'Or and Chibougamau in Québec and holds
a 50% interest in a large area of claims in the surrounding Urban
Barry area and nearby Quévillon area.
Forward-looking statements
This announcement contains forward-looking statements. All statements
other than statements of historical fact included in this announcement
may be forward-looking statements. Forward-looking statements may be
identified by the use of words such as "aim", "anticipate", "will",
"would", "expect", "may", "could", "believe", "target", "estimate",
"project" and words of similar meaning.
These forward-looking statements, including among others, those
relating to the Transaction (including the expected terms, timing and
satisfaction of conditions), Gold Fields' future business strategy,
development activities and other initiatives, business prospects,
financial positions, production and operational guidance are necessary
estimates reflecting the best judgement of the senior management of
Gold Fields and involve a number of risks and uncertainties that could
cause actual results to differ materially from those suggested by the
forward-looking statements. By their nature, forward-looking
statements involve risk and uncertainty because they relate to future
events and circumstances and should be considered in light of various
important factors, including those set forth in Gold Fields'
Integrated Annual Report 2023 filed with the Johannesburg Stock
Exchange and annual report on Form 20-F filed with the United States
Securities and Exchange Commission (SEC) on 28 March 2024 (SEC File
no. 001-31318). Readers are cautioned not to place undue reliance on
such statements. These forward-looking statements speak only as of the
date they are made. Gold Fields undertakes no obligation to update
publicly or release any revisions to these forward-looking statements
to reflect events or circumstances after the date of this announcement
or to reflect the occurrence of unanticipated events. These forward-
looking statements have not been reviewed or reported on by the
Company's external auditors.
Information relating to Osisko
The information contained in this announcement that relates to Osisko
is extracted from publicly available information about Osisko. To the
maximum extent permitted by law, Gold Fields makes no representation
or warranty, express or implied, as to the fairness, accuracy,
correctness, completeness or adequacy of any information in relation
to Osisko.
Date: 12-08-2024 07:05:00
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