Gold Fields to Buy Osisko Mining for $1.57 Billion — 2nd Update

By Christian Moess Laursen and Ian Walker

Gold Fields is set to buy Osisko Mining for $1.57 billion, giving the South African company full control of the Windfall project in Canada as it seeks to secure supply amid soaring gold prices.

Under the deal Gold fields is offering 4.90 Canadian dollars in cash for each Osisko share held. The price is a 67% premium to the stock's closing price of C$2.94 on Friday.

"Throughout our joint ownership of the project since May 2023, and the due diligence that preceded it, we have developed a strong understanding of Windfall and its potential and view it as the next long-life cornerstone asset in our portfolio," Gold Fields Chief Executive Mike Fraser said Monday.

Windfall is among the largest gold deposits in Canada. The site is expected to produce around 300,000 ounces of gold a year at an all-in sustaining cost of $758 an ounce, based on Osisko Mining's feasibility study from 2022.

It currently has a projected mine life of 10 years, with potential for extension.

"Deposits with the scale and quality of Windfall, with a highly prospective exploration camp on top of that, are extremely rare," Fraser said.

The acquisition comes as surging gold prices have boosted producers' coffers this year, hitting an all-time high two weeks ago at just above $2,500 a troy ounce. In the year so far, prices have jumped nearly 20% mainly on safe-haven demand and U.S. rate-cut hopes.

Gold Fields said Monday it has more than $2.2 billion in cash and undrawn debt facilities.

It added that environmental permitting for full-scale construction of the project is under way, with a new round of questions recently received from the Quebec Ministry of the Environment, and final approval expected in 2025.

The company said it expects the deal to close in the fourth quarter of this year.

Earlier this year, the gold miner--one of the world's top producers--achieved its first production at its key project Salares Norte in Chile, which is set to add 485,000 ounces a year once fully operational. However, the ramp up was recently set back by worse-than-expected winter weather.

The company dug up around 2.3 million ounces of gold last year.

Write to Christian Moess Laursen at christian.moess@wsj.com and to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

August 12, 2024 03:11 ET (07:11 GMT)

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