Gold Fields and AngloGold Ashanti (“The Parties”) have agreed the key terms of a proposed joint venture in Ghana between Gold Fields’ Tarkwa and AngloGold Ashanti’s neighbouring Iduapriem mines (the “Proposed Joint Venture”).
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.
The Parties have agreed in principle on the key terms of the Proposed Joint Venture.
The Parties have commenced with preliminary, high-level and constructive engagements with senior government officials in Ghana and will continue engaging with the GoG, relevant regulators and other key stakeholders, with a view to implementing the Proposed Joint Venture as soon as practically possible. The Parties have agreed to
mutual exclusivity during this engagement.
It is intended that the Proposed Joint Venture will be an incorporated joint venture, constituted within Gold Fields Ghana and operated by Gold Fields. AngloGold Ashanti
will contribute its 100% interest in Iduapriem to Gold Fields Ghana in return for a shareholding in that company.
The Parties do not anticipate that any material, additional capital injection will be required by either company to establish the Proposed Joint Venture and is expected to
materially improve its capital intensity once operational.
Excluding the interest to be held by the GoG, Gold Fields will have an interest of 66.7%, or two-thirds, and AngloGold Ashanti will have an interest of 33.3%, or one-third, in the
Proposed Joint Venture.
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.
Operational synergies will be achieved by optimising mining of the combined ore bodies and consolidating the infrastructure of the immediately adjacent mines for the long-term
benefit of all shareholders and stakeholders.
Martin Preece, Interim CEO Gold Fields:
“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. That unlocked value will underpin the Proposed Joint Venture’s continued contribution to our host communities and Ghana for decades to come. For Gold Fields, it will also
significantly enhance the overall quality of our portfolio.”
Alberto Calderon, CEO AngloGold Ashanti:
“This combination puts together two parts of the same world-class ore body, allowing us 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.”
Benefits of the Proposed Joint Venture include:
• Estimated life of at least 18 years, which could increase through an extension and optimisation plan, which will be considered under the Proposed Joint Venture over
the next three years, and which could also enhance envisaged production and cost parameters.
• Estimated average annual production (100% basis) of almost 900koz over the first five years and average annual production in excess of 600koz over the estimated
life of operation.
• Estimated all in sustaining cost (in 2023 terms) of less than US$1,000/oz over the first five years and less than US$1,200/oz over the estimated life of 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.
Key principles of the Proposed Joint Venture:
• Gold Fields and AngloGold Ashanti have collaborated across a broad and comprehensive range of work streams to formulate the indicative base case for the combination, which underpins the estimates above. Additional, detailed work will now be undertaken to develop the optimised initial operating plan which will apply from commencement of the Proposed Joint Venture.
• Gold Fields and AngloGold Ashanti have agreed the governance principles of the Proposed Joint Venture, including their respective representation in management committees for the Proposed Joint Venture and the board of Gold Fields Ghana. As operator of Gold Fields Ghana, Gold Fields will receive a management and technical fee determined on an arms-length basis.
• Implementation is subject to reaching agreement with the GoG regarding the Proposed Joint Venture, conclusion of confirmatory due diligence and definitive transaction agreements, and securing all requisite regulatory approvals. Subject to satisfaction of these conditions, the Parties intend to implement the Proposed Joint Venture as soon as practically possible.
